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Life Insurance

While most purchase life insurance with their beneficiaries in mind, policies can be applied toward "living benefits," if needed. Based on the policy holder's monthly premiums, age and health, the company will likely buy back the policy for 50-75% of its face value. Some policies will not offer "accelerated" or "living benefits" unless the policy holder is terminally ill, while others are much more flexible.

If your loved one's insurance policy does not allow for living benefits, there are still options for you to consider. For example, you can sell your policy to a third-party company in return for a "life settlement" or "senior settlement," which usually consists of 50-75% of the policy's value. After purchasing the policy, the monthly premiums become the responsibility of the third-party company, and that company receives the full value of the policy after the original policy holder dies.

Another option, known as the "life assurance" benefit or "life insurance conversion program," allows you to convert your policy benefits directly into long-term care payments. Life insurance conversion typically pays less than a life settlement - generally between 15 and 50% of the policy value - but is available for policies of lesser value that might not qualify for life settlement.

You should consult with your financial advisor and policy representatives to see what opportunities are available for you to utilize those plans preceding death.

Disclaimer:  The Parkinson Association of Alabama provides education and awareness so that you may discern your own planning. Our information is never intended to be guidance or replace that of a financial advisor or expert. We simply want to provide enough information as a conversation starter as you work with your respected financial advisors for mapping out your financial budgeting plans for community living. The PAA cannot be held liable for any financial decisions you make regarding your own planning.


The Davis Phinney Foundation. Chapter 15 - Long-term Care and Financial Planning. Every Victory Counts. Page 249.

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