• Brandon Smith

How can Life Insurance help with Medical cost?

Did you know that one of the top reasons a person files for bankruptcy are because of medical expenses? Yes that's right medical expenses. Although you may have health insurance. Health insurance doesn't cover everything. You can very well be stuck with an extremely high medical bill with no way to pay it in sight. I can never forget when I worked in Information Technology, and a co-worker came to my door and broke down crying. She just had a minor issue regarding IT, however you can tell she was beat down from something else. Usually I encourage people to submit a ticket for support. However, at this moment I could not do that. I immediately got up to console her at this time. She quicker pulled herself back with every bit of strength she could. As we were walking to go take a look at her issue, she mentioned to me that her husband had just been diagnosed with Cancer. They had already paid thousands and thousands of dollars in medical expenses. The next treatment she didn't know where they were going to get the money from. I asked her if she had life insurance. She told me her husband had some insurance. I informed her that some policies offer relief in these times. I told her to have him check with his life insurance company to see if they offered it. Fortunately for them they could use some of their policy for his next treatment. This was a huge relief off her shoulders, knowing how they were going to pay for more treatment. At that time I wasn't selling insurance. However, I sold many years back and keep my license current. But from that moment on I knew I had to do something. There are so many people who do not understand the power of having life insurance, and what it can do for their financial portfolio. Life Insurance is not just for your beneficiary anymore. There are a host of living benefits that you maybe able to benefit from.

Medical Expenses

Medical bills can start to stack up as you get older and do not have enough cash to cover them. This can be extremely dangerous because you have to choose from food on the table or paying a high medical bill that could potentially extend your life. I do not know about you but I would never want to be in that position. Almost 1.8 million people were diagnosed with cancer in 2019. 60% of those people were 65 or older. That is during your retirement. Nationally we spent $150.8 billion dollars on cancer treatment. While $4 to $10 billion of that money came from out-of-pocket expenses. It was expected that 600,000 out of the 1.8 million diagnosed people will die from cancer in 2019. What happens to the other 1.2 million people? Well they are left with the burden of high medication and treatments. Some medications can cost as low as $10,000 a month and some as high as $30,000 a month. The others beat cancer and is in remission. These are just the numbers from cancer. What about other diseases that robs us of our wealth. It's no denying that medical expenses are outrageous and your average person will not be able to afford these expenses on their own.

What can Life Insurance do?

Well, life insurance has some amazing benefits that allow you to access the cash value built up in the policy to help with those expenses tax free. There are also riders you can add to the insurance policy that will allow you to access more of the cash value when you are in need. Those are usually called terminal illness riders or chronic illness rider. These are for those times. But the way we are talking about accessing your cash you do not need a rider for that. A life insurance policy gives you access to liquid cash quickly. Lets take a million dollar life insurance policy that you've had for many years for an example. Lets say you have $750,000 in medical bills you have no clue on how you going to pay for this. For this example you have to pay the bills in order to continue treatment. Well you can call your life insurance agent or company up and request the $750,000. They will want to know if this will be a loan or surrender amount. You can decide that at that time. You should speak to your agent about the ramification of both options to make sure it works well with what your comfortable with. Keep in mind when you do this, it will lower the death benefit. So, instead of having a full million dollar policy you may only have a $250,000 policy remaining in effect. The expenses doesn't have to be that high. This was just an example of how the process works. As you can see that is a huge weight off of anyone's shoulder that needs it.

In Conclusion

Medical expenses are extremely expensive in America. Many Americans do not have the kind of money that is required to keep up with the cost. Your life insurance policy doesn't just have to be for your beneficiary. It can be a tool to help save your life. This is all done with tax free withdraws from your cash value built up in your insurance policy. This is liquid cash that you wouldn't usually have access to. But, keep in mind that your death benefit maybe reduced to keep the insurance policy active. It's your choice: Would you rather have $750,000 in medical bills with no way to pay them? Would you rather have a Life Insurance policy that can help if you in a pickle and need liquid cash fast? Call me crazy but I would rather have the latter if you ask me. Plan for the unknown and not for the moment. This way you are prepared when a tragedy comes.

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