Can I get a life insurance advance is one of the most common questions asked by people who own a life insurance policy and need money while they are alive. Under certain circumstances, almost any type of life insurance policy can be used to help pay for out of pocket medical expenses and even ordinary living expenses.
In the secondary market for insurance, you may qualify for a life insurance loan or accelerated death benefit if you are chronically ill or terminally ill.
What is the secondary market for insurance?
National and most state laws allow companies that do not sell life insurance to purchase or make loans on existing life insurance policies. This is called the secondary market for insurance, where owners of life insurance policies can negotiate agreements to obtain a life insurance loan or sell their policy before their demise. In general, the best candidates are older, in poor health and have a short life expectancy.
Why would you want a life insurance advance?
Unlike selling your policy, you retain ownership with a life insurance advance. The rules are less restrictive than they are for receiving an accelerated death benefit through some other types of plans. With a life insurance advance, you do not have to meet all of the strict conditions of a life insurance policy with an accelerated death benefit clause. You have more freedom to spend the proceeds of the loan as you wish. Your loan is paid back from the death benefit when you pass away and the remaining balance is then passed on to your beneficiary or beneficiaries.
How it works
- With a life insurance advance, you have access to money when you need it the most. You may not have thought that you can take advantage of this program if you have a term-life insurance policy that has no cash value. Well, you can. You can qualify for this program if you own a term-life, universal-life, whole-life, variable or group policy.
- Money is advanced against the death benefit and not against the cash value of the policy. With this program, it is possible to receive an advance equal to as much as 50 percent of the death benefit. Of course, you can always borrow less and have more of a remaining death benefit for your heirs.
- When you qualify for this program, there are never any out-of-pocket fees or expenses to worry about. You can not be turned down because of a low credit score or because you do not have a job. The loan is based solely on your death benefit.
- Your life insurance premiums are also advanced and paid on your behalf by the lender and you will not have to pay life insurance premiums out of pocket again. The accumulated premiums, your life insurance advance and interest are all repaid upon your death and you have no obligation to make any out of pocket payments for the balance of your life.
Now, not everyone will qualify for this type of life insurance loan. You do have to have had a major slippage in health and be near the end of life. You can contact us to see if you qualify, and whether you do or not, there is never any cost or obligation to go forward. The decision is totally up to you and your family members.