Specialty Insurances: Achieving Peace of Mind

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Anthony, age 49 was diagnosed with prostate cancer. Soon after his diagnosis he could no longer work and required home care. Due to his situation, his wife also had to stop working to care for him, thus creating a zero income household.

Is your family prepared to handle a similar situation if this occurred?

Serious illnesses such as cancer, heart ailments and Alzheimer’s affect millions of African–American individuals and families each year. People face a multitude of pressures and problems when faced with a chronic illness, including additional financial pressures. The good news is that there are financial tools available to those who need help before and after a diagnosis that will improve quality of life now.

Viatical Transactions, also known as Life Insurance Redemptions:

This is a financial option that allows an individual with a serious illness to sell all or part of a current life insurance policy. In turn the policyholder receives a cash settlement and eliminates all future premium payments. All types of policies qualify and there are no age requirements for consideration.

Once a Wild West environment in the mid–80s, this financial option is now highly regulated. A draft report recently completed by economists at the University of Pennsylvania’s Wharton School and Criterion Economics LLC in Washington, D.C., found that holders of life insurance policies who sold their policies last year to Viatical and life settlement providers, received $242 million in excess value that would have been forfeited to insurers.

Settlements can be substantial. In Anthony’s example, he held a term life insurance policy valued at $1M. He could no longer afford the annual premium payments of $8,600 on his policy but did not want to cancel his policy since its cash value was zero. He was able to complete a Viatical transaction and received $325,000 for his policy.

Long Term Care Insurance

It’s a reality that long–term care may be required for a Black person of any age, any social strata and any geographic location. No one is immune. According to the Family Caregiver Alliance, of those individuals in need of long–term care, 57% are age 65 and older, 40% are ages 18–64 and 3% are children under the age of 18. Are you prepared?

Long Term Healthcare is Assistance provided to people with a chronic illness or disability who have physical or mental conditions that limit their ability to carry out everyday tasks independently. Long–term care can help an individual maintain a level of functional independence, but isn’t necessarily attempting to cure a specific illness.

Paying for long–term care out of your pocket can be an expensive proposition. According to the Survey of State Department on Aging, 1998, the average cost of a nursing home facility is $48,000 annually. However, there are options to substantially reduce out–of–pocket costs by owning long–term care insurance which pays for various levels of care.

Cancer Health Insurance

Individuals that want to protect themselves from the extra expenses associated with a potential cancer diagnosis may want to consider cancer health insurance. Typical policies may provide up to three major types of specific benefits to the policyholder. The first of these is a lump sum payment when a cancer diagnosis is made. This provides a lump sum of cash to the policyholder to do with as they please. Funds may be used for standard health care, experimental care or no care.

Another benefit available through cancer health care insurance is for a provider to pay for lost wages due to absences from work due to an illness. This covers time off for doctor’s appointments, radiation treatments and hospitalizations. Additionally, standard medical coverage can be enhanced through "gap insurance". This covers the costs that standard health insurance doesn’t pay such as hospital co–payments and second and third opinions. This benefit is payable in addition to any other insurance that one may have.


Dependent upon your specific needs, one or more of these financial and planning tools may be right for you. Work with a qualified professional to help guide you every step of the way and review the pros and cons of each option before any decision is made. The time we have here on earth is about making lasting memories with good friends and family, not about worrying about finances.

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