ALS is commonly called Lou Gehrig’s disease because of the Yankees Hall of Fame baseball player who passed away from the debilitating illness.
Gehrig was 36 years old when he was diagnosed with ALS—upon diagnosis, he abruptly retired from baseball.
His nickname was the “Iron Horse” because of his durability—as a testament to his durability, he played 2,130 consecutive baseball games, a record only surpassed by Cal Ripken, Jr. in 1995.
Upon retiring from baseball, the Yankees held an event at Yankee stadium to pay respect to Gehrig.
At this event, Gehrig delivered his famous “luckiest man on the face of the earth” speech. You can go here to listen to the speech.
Two years after retiring from professional baseball, at the age of 38, Lou Gehrig died from ALS, an ironic and sad-ending for a man known for his durability with such a nickname like the “Iron Horse.”
During the 1920’s and 1930’s when Gehrig played professional baseball, players didn’t make as much money as they do now.
However, if Gehrig needed money to pay for his illness, he would not have had a problem acquiring it.
Not all of us have star power like Lou Gehrig.
Money to combat ALS is a huge and real problem for many ALS sufferers.
In this article, I will discuss how ALS patients who have a permanent life insurance policy in force prior to ALS diagnosis can get money from their whole or universal life insurance policy.
These are the three ways that ALS patients can get money from their permanent life insurance policy:
- Taking out a LOAN against the cash value of their permanent life insurance policy
- Making a WITHDRAWAL from the cash value of their permanent life insurance policy
- SURRENDERING (i.e. cancelling) their permanent life insurance policy.
Before launching into the meat-and-potatoes of this article, if you would like to help find a cure for ALS, donate to the ALS Association here.
Taking out a Loan against the cash value of your permanent life insurance policy (i.e. your whole or universal life insurance policy) is one way to get money from your permanent life insurance policy if you have ALS and need the funds to combat your disease.
According to this source, “If you’ve built up a sizable cash value, you may also choose to take out a loan against your policy. Life insurance companies often offer these cash-value loans at interest rates lower than a traditional bank loan. Of course, you’re not obligated to pay back the loan since you’re essentially borrowing your own money. However, it’s important to note that any money you borrow, plus interest, will be deducted from the death benefit when you die.”
Making a withdrawal against the cash value of your whole or universal life insurance policy is another method for people diagnosed with ALS to get much needed money from their permanent life insurance policy.
According to this source, “If you’re low on funds or simply want to make a large purchase, you have the option to withdraw some or all of your cash value. Depending on your policy and the size of your cash value, such a withdrawal could chip away at your death benefit or even wipe it out altogether. While some policies are reduced on a dollar-for-dollar basis with each withdrawal, others (such as some traditional whole life policies) actually reduce the death benefit by an amount greater than what you withdraw.”
And the final way to get money from your permanent life insurance policy is by surrendering (i.e. cancelling) your permanent life insurance policy. When you surrender a permanent life insurance policy, you are cancelling it, which entitles you to all the accrued cash value of the whole or universal life insurance policy. According to this source, “you always have the option to surrender your policy and receive the accrued cash value. Before taking this route, it’s important to consider many factors. First and foremost, you’re relinquishing the death benefit when you surrender a life insurance policy, which means your heirs will receive nothing from the policy when you die. In most cases, you’ll also be charged surrender fees which could greatly reduce your cash value. Additionally, the cash you receive through the surrender is subject to income tax. If you have an outstanding loan balance against the policy, you could incur even more taxes.”
In addition to tapping into the cash value of your permanent life insurance policy to acquire the much-needed funds to fight your ALS, many life insurance policies also contain the accelerated death benefit rider which allows those who have a terminal illness with less than two years to live to tap into the death benefit of their policies. The accelerated death benefit rider is not in all life insurance policies so I have not discussed the rider in depth in this article. To learn more about ALS and the accelerated death benefit rider, read this article.
ALS is an expensive illness. It is estimated that fighting ALS costs around $65,000 year—I think this is on the low-end. The illness probably cost somewhere in the neighborhood of $100,000 year to fight.
Therefore, if you have ALS, you are going to need money.
Getting money from your already existing permanent life insurance policy (i.e. whole or universal life insurance policy) is one way you can get money to fight ALS.
Here are the three methods you can use to get tap into the cash value of your permanent life insurance policy:
- taking a loan against the cash value built up in your policy
- withdrawing from the cash value of your policy
- cancelling (i.e. surrendering) your policy.
I hope this has been a helpful, overview article on how to get money from your permanent life insurance policy to fight ALS.
If you have ALS and want to discuss life insurance, please email me at email@example.com or contact me here.
If you would like to help find a cure for ALS, please donate to the ALS Association here.
Until next time and until next life insurance article,
Life Insurance Agent for Generation X