BECAUSE GOVERNMENT CASH benefits are so unreliable and insubstantial, persons with disabilities are well advised to devise alternative methods for financing costs attributed to their own disabilities and illnesses. Given the potential enormity of liability, insurance is a logical alternative to direct financing of the potential liabilities.
 |
| Health Insurance For Multiple Sclerosis |
Insurance takes the shape of a counter intuitive form of investment: you pay for something you hope you will never need to use. Because of the gloom inherent in these arrangements, some people hesitate to invest adequately in insurance coverage. This view, however, is risky wishful thinking unless you are very wealthy.
Although you may never have enough dollars to pay for the potential devastating consequences of disability on your own, you can at least minimize the risks by insuring against them. Insurance is essentially a means of transferring financial risk to an outside party. Rather than risk all the consequences of disability, you instead pay a premium and transfer some of the risk to an insurance company.
As the probability increases of that risk coming to fruition, the cost to the insurance company increases correspondingly. Thus, the types of insurance that are most important to a disabled person are, unfortunately, precisely the types of insurance that become more difficult to obtain following the diagnosis of a significant medical condition (e.g., MS). The types of insurance that are directly affected by health conditions that the insurance industry considers serious enough to be "ratable" (i.e., to warrant a higher risk assessment) usually include:
- Life insurance.
- Health insurance.
- Disability insurance.
- Long-term care insurance.
- Disability-based insurance, such as:
- Mortgage insurance.
- Business overhead insurance.
- Disability buy-sell insurance.
- Key-person disability insurance.
Life insurance
Life insurance is essentially a pot of money available when we die. However, the life insurance contract itself has value even while the owner is still alive, because it represents guaranteed payment in the future of the proceeds of the policy. It is also possible, therefore, to view life insurance as a pot of money that is available during life for extraordinary needs, or as a substitute for some disability related insurance products (e.g., mortgage insurance).
For example, a person who knows that he or she is going to die can convert existing life insurance into current money. Unfortunately, life insurance cannot normally be used in this manner by persons with MS because it is not considered a terminal disease. However, a well-spouse diagnosed with terminal cancer might want to make use of life insurance benefits in this way in order to generate needed funds more quickly. An attorney who specializes in elder law can provide information about the procedures involved and draw up the necessary contract with the viatical company offering this financial arrangement.
Another alternative is to use whole life insurance in place of term life, and then take out policy loans against the cash value of the whole life policy for extraordinary needs. Term life insurance (a form of life insurance that provides a fixed amount of money if the person dies within the stated term of the policy but has no additional investment value) is the insurance typically offered by employers. Whole life insurance (a form of investment that not only provides insurance but also accumulates cash value) is typically purchased privately by individuals. Assuming that you are able to obtain enough whole life insurance, you may be able to borrow enough against its value to defray the costs attributable to disability during your lifetime.
There are a number of ways that persons with a diagnosis of MS can obtain life insurance despite diagnosis. One way is to convert existing individual term life policies to whole life. Another way is to obtain as many group memberships as possible in associations that offer "guaranteed issue" life insurance (and then convert this to whole or universal life if offered). Also, a person with MS should accept as much employment-based life insurance as is available, and convert this insurance to whole life insurance if that option is available upon leaving employment. To find out more, you can check out Health Insurance For Multiple Sclerosis.