Life Insurance: Incurable Disease Doesn’t Cancel Your Options




Your life insurance policy can be a valuable resource if you are diagnosed with a terminal illness. If you do not have life insurance at your time of diagnosis, it is unlikely that you will be able to purchase a policy. But If you already have life insurance, incurable disease can pose less of a financial burden on your loved ones.
With existing life insurance, incurable disease and its outcome can be financially mitigated. Your life insurance policy will provide income for your survivors. In addition, you may be able to access a portion of your death benefits while you are still living to fulfill a dream of yours or to cover necessary expenses. 
Guaranteed insurability rider
Insurance companies regard a terminal illness as an obvious risk. If you try to purchase new or additional coverage for life insurance, incurable disease will almost definitely stand in the way. However, if you purchased a guaranteed insurability rider when you purchased your policy of insurance, incurable disease may not be a factor; you may be able to purchase additional benefits without proof of medical insurability. 
Change your dividend option
If you receive annual dividends from your life insurance, incurable disease may not prohibit you from purchasing more life insurance. If your current dividend option is to allow dividends to accumulate, or to use dividends to reduce premiums, you will probably be able to switch to a paid-up additions option. You would then be able to use the dividends to purchase on yourself additional fully paid-up life insurance, incurable disease not being as issue as you would not need to provide proof of medical insurability. 
Buy credit insurance
If you are still employed and take out a loan for an expensive item, you might be able to purchase credit life insurance, incurable disease and resulting death being the reason that the insurance will probably need to pay off the balance of your loan. 

Your company's program
Your place of employment may allow you to purchase additional life insurance, incurable disease not being a factor because you are not required to provide proof of medical insurability. This option may be available only during open enrollment, or perhaps at any time..
More income for your survivors
If you purchase more life insurance, incurable disease and your resulting death will have less of a financial impact on your survivors. Although this will raise your premiums, it should be considered seriously to achieve the maximum level of coverage possible. 
Cash surrender value
If there is a cash value to your insurance, incurable disease may not stop you from using your policy as collateral to get a loan from the insurance company. While this will give you cash in the short term, bear in mind that a loan against your policy will decrease the death benefit and cash value of the policy. If your life insurance policy has a cash value component, you may be able to get a loan from the insurance company using your policy as collateral. Keep in mind, however, that taking a loan against your policy will reduce the death benefit and cash value of the policy.
Accelerated death benefit rider
If you there is an accelerated death benefit rider on your insurance, incurable disease may not prohibit you from being eligible to access a portion of the policy’s face value before you die, either in installments or in a lump sum. You can use this money however you want, and if you are expected to die within 24 months, the money will not be taxed. If you prefer, you can take a portion of the funds so there will be some left for your survivors. 
Sell to a viatical settlement company
If you sell your policy to a third party, most often an investor-owned viatical settlement funding company, you will receive some 40-85% of the face value of your insurance, incurable disease notwithstanding, and you can use the cash payment as you see fit while you are still living. If you do not spend it all, you can leave the remainder to your beneficiaries through your will. You will not pay taxes if your life expectancy is less than 24 months.