One of the most difficult things to deal with as we age is the possibility that we may someday get a diagnosis that we just can’t beat. Sadly, this is something that happens often. In fact, according to the Pew Research Center, 42 percent of Americans have had a relative or friend diagnosed with a terminal illness or coma within the past five years.
When dealing with the extreme emotional impact of a terminal diagnosis, the last thing you want to worry about is money—and how you’re going to pay for all the treatments that keep you comfortable in your final years. That’s why it’s necessary to secure financial protection in the event you’re diagnosed with a terminal illness.
Cancer insurance provides a lump sum-payment upon a cancer diagnosis. The benefit in these policies is provided whether the diagnosis is terminal or not, so it’s an extremely important policy to have no matter what. The payment of the benefit is usually made quickly, and can range from $5,000 to $100,000.
While cancer is certainly a common diagnosis, it’s not the only terminal disease that exists. A life insurance policy with a terminal illness (or accelerated benefit) rider gives yet another lump sum–payment option for those diagnosed with any kind of terminal illness.
The terminal illness rider works by advancing the insured a percentage of their death benefit upon terminal diagnosis. While that payment can then be used to help them pay medical bills or supplement income during their final days, a portion of the policy benefit remains to be paid to beneficiaries upon the insured’s death. This means your loved ones still get a benefit for funeral expenses and lifestyle maintenance, even after you’ve used some of the benefit during your illness.
A terminal illness rider or cancer insurance policy provides you with important benefits and financial relief during retirement, but they also benefit your family by reducing the amount of medical and other debt you may leave behind. Further, in the case of a life insurance policy with terminal illness rider, an added benefit will be paid to them after you pass on.
In the next volume of the POSTRETIREMENT BENEFITS PLANNING series, we will go over social security benefits and the financial impact of choosing claiming methods.