A terminal cancer diagnosis is heartbreaking and somber. Knowing what you and your family have to go through going forward is difficult enough, but it’s also a time for difficult choices. Paying for cancer is tough. In fact, cancer patients are twice as likely to declare bankruptcy following their treatment. You don’t want to leave a huge financial burden on your loved ones once you are gone. Planning for how you will pay these expenses as soon as possible means you don’t have to worry about finances and you can spend the rest of your days in comfort and peace.
What Medicare and Medicare Advantage Plans Cover
Americans over the age of 65 receive federally-funded insurance called Medicare. Medicare advantage plans are sold through private insurance companies and combine the benefits of Medicare Plans A and B with other services like prescription, dental, and vision coverage. Having a Medicare advantage plan can come in handy when it comes to the rigorous treatment that comes with cancer, but it also covers many of the costs associated with hospice care and services for anyone with a serious illness whose doctor certifies that he or she has six months or less to live. Be sure to note enrollment dates and requirements for Plan C Medicare advantage insurance before applying.
Viatical Settlements for the Terminally Ill
Even though Medicare and Medicare advantage plans help with a lot of medical expenses, patients still need to plan for additional costs. According to a Mount Sinai School of Medicine study, out-of-pocket expenses for Medicare recipients during the five years before their death averaged about $39,000 for individuals, $51,000 for couples, and as much $66,000 for people with long-term illnesses. Getting a viatical settlement can help cover these costs. “Viatical settlement” is a term for when a person who is chronically ill sells their insurance policy to a third party for more than its cash surrender value but less than its face value. The previous owner is no longer responsible for paying premiums and can use their funds to pay for things like outstanding medical bills or end-of-life care. Viatical settlements are life settlements specifically for chronically or terminally ill people who want to live comfortably throughout their remaining days.
Term Life Insurance
If you would rather keep your life insurance, a term policy can be a good option. With this policy, you only pay for the length of its term, and the death benefit can help your family pay for any outstanding expenses. You can choose from several term lengths, depending on when you think your family will need financial assistance in the event of your passing. Using an online term life insurance calculator can help give you an idea of how much term life insurance will cost. Online guides about specific term lengths detail the pros and cons, which can help you decide on a term length that’s right for you.
Last Will and Testament
Even if you’ve had a last will and testament drafted up for years, it’s important to go back over it with a lawyer after receiving a terminal cancer diagnosis. Your will should thoroughly describe how you want your assets to be divided once you pass away. Without your explicit instruction, your family could end up in probate court as a judge divides it all up based on state inheritance laws. You can also choose to add letters to loved ones as a way to make your wishes clear and more personal.
Review All Beneficiaries
If you own financial assets like stocks, bonds, retirement accounts, or certificates of deposit, go over each one and make sure your beneficiaries are correct. Typically, you want to have a single beneficiary, such as a spouse or child, but it’s also possible to leave them to nonprofits or charities. If they are not named as a beneficiary for an asset, the money could end up instate, as you cannot use a will or trust to leave the assets to someone else when there is another named beneficiary. Furthermore, if you have a shared account with a spouse, have your bank allow them right of survivorship once you pass.
While Medicare covers a lot of the medical costs associated with a terminal cancer diagnosis, most people still end up paying thousands out of pocket. A Medicare advantage plan covers more costs, including hospice care. For other out-of-pocket expenses, look into selling life insurance for a viatical settlement, or consider a term life insurance policy that can provide financial assistance for your family. Finally, a last will and testament is essential for anyone facing a terminal illness, as it makes sure assets are distributed in the way they want.
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