Life Insurance & Early Benefit Pay-out Rider
Since financial matters like STD and LTD are being discussed here, another avenue to explore is your life insurance policy to see if there is a clause or rider that stipulates partial benefit pay-out in the case of terminal illness. Life insurance is designed for income replacement of the bread winner and a lot of term policies offer up to a 40% early payout (with term policies this amount would not have to be paid back or considered a loan against the policy). I say this because my policy offers this early benefit payout. Just another avenue to explore.
Also, if your policy has a cash value built up, beware of withdrawing that money. In a lot of whole life, variable life, universal life policies, the death benefit will either be the face amount of the policy OR the cash value that has been built up. Rarely will you get the cash value as it is kept by the insurance company. If you withdraw your cash value, it could be considered a "loan" and could be subracted from the face amount upon death benefit pay-out.
In other words, if you had $10,000 cash built up in your policy and you take that out to pay bills with. The insurance company considers this a $10,000 loan and will charge you interest (even though it was your savings you withdrew from). If the face amount of the policy is $100,000, you may only receive $90,000 in total payout (minus interest charged to you on your $10,000 withdrawl - even though it was your savings to begin with). I used to be a licensed insurance agent (only sold term).
Please read your policies and ask your insurance agent for any clarity or contact the claims department of the company. They know what your policy contains and can help. Its a tough topic but you would be amazed how these policies can surprise you.
Zaphoon
