The ALS ice bucket challenge, which was initiated in 2016, is now an annual event.
It raised upwards of $40 million dollars in 2016 for ALS research to find a cure for the disease—the event continues to raise money today.
However, just as this annual event raises money to find a cure for ALS, each individual sufferer has to raise their own money to fight the disease.
Coming up with enough money to fight ALS is a battle in-and-of-itself for each individual ALS patient.
According to this source, the cost of combating ALS costs an average ALS sufferer $63,692 year.
That breaks down to $31,121 for medical costs; $17,889 non-medical costs; and $14,682 lost income.
I’d say these figures are on the low-end.
If you have been diagnosed with ALS, you should anticipate paying upwards of $100,000 year to fight your disease (maybe more).
In this article, I’m going to discuss 3 ways ALS sufferers can use life insurance to help fight the financial battle.
These three ways are the following:
- Accelerate your Death Benefits
- Tap into the Cash Value of your Permanent Life Insurance policy
- Sell your policy to a Life Insurance Settlement Company.
Before launching into this article, if you would like to help find a cure for ALS, please donate to the ALS Association here.
How can ALS patients make Money from their life insurance policy using the Accelerated Death Benefit Rider?
I’ve gone into detail about the Accelerated Death Benefit Rider in this article—please read it for a thorough understanding of the accelerated death benefit rider.
I’ll give a synopsis of the accelerated death benefit rider in this article.
If you already have a life insurance policy in force at the time you are diagnosed with ALS, you may have the option of accelerating the death benefits in your life insurance policy using the accelerated death benefit rider.
This rider is included free of charge in many standalone life insurance policies—this rider has to be purchased separately as an add-on in other life insurance policies with other companies.
It really does depend on the company so you need to read the fine print on your life insurance policy.
With this life insurance rider, you can accelerate all or some of your death benefit (i.e. take a cash advance in a lump sum) of your life insurance policy if
- you have a terminal illness
- with less than 2 years to live.
ALS is a terminal illness and the average life expectancy of an ALS sufferer is 2 to 5 years so ALS patients should qualify for accelerating their death benefits under this rider, that is if the rider was in their life insurance policy in the first place.
How can ALS patients make Money from their life insurance policy using Cash Value?
Permanent life insurance policies (not term life insurance policies) build up cash value.
Cash value is money that the policyholder can tap into for a rainy day. Cash Value is basically part of the insurance premium that you’ve been paying over the years set aside into a different account.
ALS patients with permanent life insurance policies (i.e. whole or universal life insurance) can get money from the “cash value” that has built up in their permanent life insurance policy 3 ways:
- Taking a loan against the cash value of their permanent life insurance policy,
- Withdrawing money from the cash value of their permanent life insurance policy, and
- Surrendering (i.e. cancelling) their permanent life insurance policy which entitles the ALS patient to the entire cash value in one lump sum from the life insurance company.
How can ALS patients make Money from their life insurance policy by selling their policy to a Life Settlement Company?
Life Settlement companies are companies that buy existing life insurance policies from people for more than the cash surrender value of the policy but less than the death benefit.
The transaction for the purchase of the life insurance policy by the company is called a life settlement.
Whereas life settlements are frowned upon by many people, there are some legitimate life settlement companies out there.
Do your research and check reviews if you are considering selling your life insurance policy to a life insurance settlement company.
ALS is a very expensive disease to combat. The source I’ve cited above claims that it takes around $64,000 year to fight ALS—I believe this is a low-ball figure.
Expect to pay $100,000 (and more) to fight ALS.
Therefore, ALS patients need to find ways to make money to combat the finances of their illness.
Life Insurance can offer three ways for ALS patients to do this.
These three ways are the following:
- Accelerating the Death Benefits of your life insurance policy
- Taping into the Cash Value of your permanent life insurance policy
- Selling your policy to a Life Insurance Settlement Company.
Please look into all three options before making a decision on which option is the best for you.
If you have ALS and want to discuss life insurance, email me at firstname.lastname@example.org, contact me through Linkedin, or message me here.
Until next time and until next life insurance article,
Life Insurance Agent for Generation X