(Guest Lecture): July 2023 - Life Insurance: How to Obtain It and Maximize It

It's my pleasure to introduce Diana to you. She's the financial program manager, and she specializes in financial help for multiple myeloma and acute myeloid leukemia patients. As a professional financial advisor and former caregiver of her husband who had multiple myeloma, Diana perfectly understands the financial issues facing cancer patients. Diana, we're really looking forward to your presentation today and I'll turn the time over to you for any of those latest financial updates. Thank you, Audrey. Hello, everyone. Thank you for joining us on this beautiful July day here in Louisville. Hope everyone is enjoying some great weather. I thought that life insurance was a great topic and we get questions about the use of life insurance all the time. I think it's very important for all of our patients to understand the benefits of life insurance, not just leaving money for beneficiaries or your family or whatever, which is important. The other needs that you may find, that life insurance can cover while you're alive. We're going to go through the types of insurance, what life insurance means, what you can do with life insurance. What I encourage everyone to do, if you have your life insurance around, take them out and review them. Everyone needs to review their life insurance portfolio every single year. There are benefits that you may have that you can use, and you may find that some of the benefits you paid for, maybe going away. You might want to look at those policies to make sure you're taking advantage of everything that you can on your policy. Let's get started. I apologize. I got this latest financial updates. Sorry, I'm looking at that and I just was so excited about this webinar. I think a lot of people who are on dexamethasone may find themselves with medication causing diabetes. For some of those people, you may be prescribed ozepic. Ozepic is really big in the news because a lot of people are losing weight with that. It's becoming scarce because of the secondary off-label use that ozepic is being used for. The latest thing is there's new medicines coming down the pike. Hopefully, it'll open up the channels because you may be finding if you're on ozepic that you're having a hard time getting your prescription filled, which is not a good thing when you have diabetes because that's what it was designed for, for diabetics. I'd encourage you to ask your doctors about some of the latest diabetic medications and see if you can, again, because they're very costly, work with the manufacturer of those prescriptions to see if you can get some coupons to help manage the cost of those things because like ozepic, it could be $1,600 a month if you don't have insurance. So please look into those. Order ahead of time. Your doctor may be allowing you to get three months versus a one-month prescription. Do that versus in mail. It will be a lot more cost-effective. So please talk to your doctor, talk to your pharmacy, and make sure you're going to have your prescriptions when you need them. Okay, back to life insurance. I apologize for getting it all mixed up. I was so excited about this. I've been reviewing this quite a bit and going through my policies as well. What I was mentioning earlier is I think it's very important that everyone get out their life insurance policies and review them because you may be missing out on benefits you've been paying for and you don't want to lose those benefits because they can be very, the benefit of not having those is you would have paid for something you haven't used. And if you need it, it may be costly not to have those when you may need to access your life insurance for something other than leaving it to beneficiaries. So we're going to talk about how to obtain it, how to maximize it. And it's especially important when you have a disease like cancer, sometimes you're automatically disqualified for life insurance and that could be a problem. So we're going to talk about the importance of life insurance, making the most of the type of insurance that you do have, the types of life insurance that are out there. Can you still purchase life insurance when you have cancer? We'll discuss that. What options do you have? The uses of life insurance, there are many more uses out there that people are aware of and how to access life insurance benefits prior to your death. Next slide. So why is life insurance so important? We hear that we want to leave money to your beneficiaries to make sure that they can be taken care of in the event of an untimely death. Very, very important. I found it very beneficial after my husband passed because we had a house payment that was really huge. I wasn't working because I had to have to take care of him. So there's a lot of things that life insurance can do. So we need to expel some of this about life insurance. Like it's not just for after you pass. Who needs to be insured? Surprisingly, women are underinsured and that is becoming a problem because women, diseases are being found more in women than it used to be because we're now in a stress environment because women started working in the 40s and 50s or in the war. So our health issues are becoming more in focus than just looking at men because men were the breadwinners. We thought they were the only ones he'd be taken care of. And that is not the case. Women are historically underinsured. You say, but I don't need it. You don't need it because maybe you don't have any children at home or you never had children or your needs changed. I would say, really? I would guess that some of the things we're gonna go over, you're gonna find at least one or two instances where you thought, where are you gonna think, well, maybe I need to have insurance or maybe I need to look at a policy that I have. And then why does a type of insurance matter? It does. It can matter on your tax efficiency on a lot of things. So we're gonna discuss those as we go on through this webinar. Next slide. So why purchase life insurance? Because it can replace your income in the event you passed or in the event you could not work or in the event you needed to pay for your medical care. Debt repayment. If something were to happen to you and you are no longer here, then someone needs to pay off your debt. Funeral expenses. That's a given. Estate taxes. If you have a sizable estate, then if you were leaving money to cousins, brothers, sisters, they may be incurring taxes as a result of that. A lot of times an attorney will get a life insurance or put a life insurance in a trust or something that will take care of their taxes. So a person wouldn't have to sell off what you're actually leaving them for their benefit. You can pay for children's health can pay for children's education in if it's something where to happen to you prematurely. Business planning. A lot of people, if you have businesses, and I have talked to a lot of patients who have businesses and they have spouses and spouses have children, even some young children, life insurance can make sure that if something were to happen to you, then your spouse can either buy the business that continue the business, have someone or sell the business or take care of the needs that need to be taken care of regarding a business so she can continue to earn a living from that business that you worked so hard to put in place. Tax-free retirement. A lot of people are not aware that life insurance policies with cash value, you can access that cash value tax-free if your policy is created correctly, structured correctly so that you can access some of that cash value and it could go to your, benefit you and it can be tax-free as long as it's managed correctly. Charitable contributions. Life insurance can be left to a, like let's say health tree. In fact, I have life insurance that I have put in place where I made health tree a beneficiary of a life insurance policy because I find this organization so important. That's something that you can also do. And then you can get, for other contributions as well, you can get a tax write-off for some of these things. Wealth transfer, huge. That is what a lot of families have built their wealth on because the cost of a life insurance policy is pennies on the dollar versus having to raise and say I wanna raise 100,000 or $200,000 to leave to a daughter when if you buy a life insurance policy for $100,000, it's pennies on that one or $200,000 that you're paying for the cost of that. And then legacy planning, same thing. Wealth transfer, leaving money for children, leaving gifts, that way life insurance can be very, very beneficial. The ones we're gonna focus on are gonna be income replacement. We're gonna talk about debt repayment or healthcare, taking care of healthcare expenses while you are alive. So those are ones we're really gonna focus on. So you need to understand the type of insurance policies that are beneficial that will work for these particular needs. Next slide. Life insurance also give you peace of mind knowing that you have additional, I say a pool or a pot of money set aside to take care of some of the needs you may have coming up. Equalizing inheritances. That's a big thing that we're not gonna go over, but it helps if you have life insurance and you have somebody, you've got to give somebody a house over here instead of having to sell the house with those proceeds equally among beneficiaries. A life insurance can make up for the same cost or the value of the house for beneficiaries. Collateral for loans. This is huge. If you have a life insurance policy that has a cash value, you can use that as collateral for loans. And the cost is gonna be a lot less for you because it's your life insurance policy, the cash value's there. The interest rates are not, it's not the same. You don't have to worry about debtors or any of those people coming back against you. So it gives you a lot more benefits on a, for collateral for a loan. You don't have to get the underwriting and all that other stuff is a lot more, everything is very easy. Covering specific expenses such as healthcare, such as needing someone in your home to take care of you, covering co-pays, deductibles, things that you don't have money just sitting aside to take care of those things. If you have a life insurance cash value policies, there's a great benefit to having those types of policies. Next slide. Do you already have a personal policy? By personal policy, I'm meaning one that you purchase through a life insurance agent or a insurance broker, not the one necessarily that's attached to your employer. So again, review your policies yearly. That's not just for the patients I'm talking to or people who are really concerned about having policies or trying to get policies. That's also for your spouses or anyone else, they need to review their policies because the older you get, the more apt we are to have a medical problem. And then the cost of insurance may be extremely high if we can get insurance at all. So that's why everyone should review their policies yearly to make sure they have the right type of policy and the right amount. If you have an old policy, you may have benefits that are not available on newer policies. So please pull out those old policies. Think about when you got your first policy. I've known a lot of people who've had policies that are very old, forgot all about them, and then they get to go back and try to search and find out who that insurance company was or its insurance companies have been bought and repurchased and sold and gone out of business. So I would encourage you to go back and find insurance policies. So do you have a term policy or cash value? What does that mean, a term policy or cash value policy? Term policies for a specific period of time, cash value policies are usually whole life or permanent policies that do not go off at a period of time. They only terminate if you don't pay for those premiums. So how much do you need? What are your goals? What do you need life insurance for? Those are personal questions you need to answer to make sure you're not paying too much for insurance, that you're overinsured, or that you have the wrong type of insurance. Have your needs changed? If you purchase a policy five, 10, 15, 20 years or more, have your insurance needs changed? Do you need that much insurance? And I would say, especially when you're looking at a term policy, if you have a term policy that you had that's gonna expire after paying all these premiums for 20, 25 years, you may have had young children at home and you wanna make sure they go to college. If it's something were to happen to you. So now you have a policy, the kids are no longer at home, the kids are doing well, you don't, and that policy is gonna terminate next few years. Don't let that policy go away. You have the right to look at the policy. A lot of them will say this, almost all of them will give you a benefit option of converting a portion or all of that death benefit into a whole policy. Of course, the cost of that policy is gonna go up because you're paying for the cost of life insurance, but it gives you the benefit to have a policy that's gonna grow cash value that you may need to access later on or for whatever reason. So looking forward with life insurance, what can life insurance do for you? Don't look at it as something I bought, put over in a drawer, look at it for all of the benefits that it can provide to you, especially if you're looking at the cost of life insurance, a cost of health insurance in the future. And I've thrown this number out, a number out, and I found out it's actually higher. Out-of-pocket costs for healthcare needs for a couple at retirement until presumed life expectancy, it's gonna be $270,000 out of pocket. Now that is based on today's dollars, right? We know that inflation is gonna make that number go up and up and up. How many people have $270,000 sitting over an account somewhere or less hoping it's gonna grow to meet those needs? And that's not necessarily based on a person who has a very expensive illness such as cancer. So I would encourage you to look at your life insurance policies, see if there's something to be done with those permanent policies, convert those to cash values or whole or permanent policies so that you'll have a lot more benefits at the end and not have paid in 15, 20, 25, or even 30 years for a policy that's gonna go away. Next slide. A term policy. So this policy is usually a place for a specific need such as a marriage, make sure your daughter's gonna get married for her marriage, for making sure kids go to college if there's something were to happen to you. So it's whole life or pure insurance. And they mean that because it's based only on your life in the event of an untimely death. It's for a specific period of time, like five, 10, 15, 20 years, 25, you pay your premium because it's a contract. The insurance company said you pay the premium. We will pay you at death benefit no matter where you are in a period of time, use these. But there are some caveats regarding death by in a military or death by suicide. There are some, every policy has some of these waivers in there. You pay your premium after that period of time, the policy goes away. You've paid all those years, policy goes away. You have nothing left. Now, let's just say you have a policy that's coming and you're trying to decide whether you can convert it or want to convert it or not. Do you still have a need for life insurance? If you have no need for life insurance, that may be good. A lot of people find that life insurance is a benefit and it covers a lot more. If you're not aware of what your needs are, I would suggest you sit down and talk to an insurance agent or preferably a financial advisor because they'll go over everything with you. What your needs are, what the cost is going to be. They will look at everything. Okay, so your term policy does not have a cash value component, which means it's just pure, pure life insurance based on your life options. So you usually have an option, like I mentioned earlier, to convert a portion or all of your permanent, your temporary policy into a permanent policy, such as full life or universal life. Be aware of the possible time restraints or conversion opportunities. So that policy, if you don't have a policy, call your insurance company. They can find that policy based on when it was issued, what options you had on that policy. Very important. Please don't overlook this. This is very, very important. Next slide. So permanent life insurance. This is the policy that's going to last you as long as you pay your premiums throughout your life. This policy is in effect as long as you pay your premiums. Usually has a cash value component, universal life, variable universal life policy. Death benefit can be stagnant or increased depending on how your policy is structured. Withdrawals or loans can be accessed on the policy at any time, as long as there's cash value in the policy. That's more than what you've paid into the policy. And possible tax-free income benefits that could supplement retirement or anything else that you may need the cash for. Next slide. So guaranteed issue policy. This is, I would say this is your last resort policy. This is type of a whole life policy or permanent policy that allows you to skip health questions and medical exams. It's a great benefit if you have a serious illness like cancer, because when you're diagnosed a lot of times you cannot get insurance at that point because your risk is way too high. It does not pay death benefits, but it does not pay the risk of death. It does not pay death benefits during the first two or three years the policy is enforced. So you understand the benefit of time or the lack of time where this is something that needs to be put in force early. It does not return a policy. It does return a policy premium what you would have paid into it plus 10% interest if the insurer dies during that first two or three years that the policy is enforced. The death benefit is usually between 2000 and 25,000 not very much. You'll hear them talk about colonial life, in life. These are guaranteed issue policies where you're not gonna have to give blood or urine or all those underwriting things. A lot of times they don't ask questions because you're picking up most of the risks because your premiums are gonna be extremely high. It's designed for people with serious health issues. If you didn't have a serious health issue you'd go to a different permanent policy where you don't have, the cost is not nearly as high. Compared to other types of life insurance guaranteed policies generally, I would say not generally but almost always have a higher premium relative to the death benefit. Next slide. So how can you get insurance, life insurance now that you have cancer? So you can be creative. You know all those credit cards sometimes you get these papers and the mailers in with your statement or if you don't email, don't get that you get through your electronic bill. You might ask them, call them and say do you have insurance that I can apply for? A lot of times you can get insurance through credit cards. It's not very much or you can call your bank and say it's not very much but it is life insurance that can benefit you or professional member organizations. Perhaps you're a retired attorney, a retired doctor and you may still be involved in some of these things. Maybe you're a carpenter. A lot of them have organizations where they have group policies and you may be able to get in those without doing as much underwriting. So that's another option to get life insurance. Another big one is see if you can be added to if your spouse is still working, see if you can be added to your spouse's employer employer's insurance. Now it's not nearly as much. You may find them to give you five, 10, 15, 25 some employers will allow the spouse to get more insurance if you pay for it but when you go that route you may have to have to do underwriting which means it may not be an advantage for you. So if you plan on leaving your employment next year, listen, if you plan on leaving your employment next year and you have open enrollment coming up in October, November for the next year for January, 2024, see what kind of insurance they offer for yourself and for your spouse and see if that insurance they offer is portable. By portable I mean if you were to leave your job can you take it with you? Of course you'll be still paying for the premiums but you don't have to do underwriting. That insurance is still available. You can just convert it to your own policy. End of year open enrollment periods are an excellent time to increase your benefits for yourself and perhaps enroll a spouse on your benefits including supplemental lives because they're not gonna do underwriting. It won't be a lot unless you go above what they usually give you but it is something much cheaper than alternatives. Your spouse should check to see if they can add you to a portable policy as well through their employer and then find out, make sure that policy is portable and find out if it decreases after a period of time. Find out how that policy works. Ask for a copy of the policy if they have one in place. Even if you don't have insurance they may be able to give you information about that policy. Next slide. So please again that I mentioned earlier about that term policy, don't let that policy expire without looking at the benefits. Don't pay years and years into a policy and not expire. That's just throwing away money. Review your options for conversion possibly without underwriting requirements. You can convert part or all into a permanent policy that may provide cash value or make it a policy that's long as you're paying on it. You have that policy in place and you have access to cash value that can be tax-free depending on how it's structured. Next slide. So can you be in remission and still qualify? It depends and let me go off slide a little bit. I have spoken to people who have cancer and I've spoken to a person recently that has myeloma and they have not had any treatment for seven years. Nothing, no dexamethasone, no Revlimid, no maintenance therapy, nothing for seven years. They went and had some tests done there was basically nothing in their system. Although they had stem cell transplants and everything in the past, they were looking really, really good. Can this person go and get life insurance? Probably, because they're showing they're not under any treatment. They show nothing, they show hardly anything, nothing, they're doing well. They can probably get insurance at standard rates. It won't be preferred, but it could be standard. So these are some things I really need you guys to be aware of. There are insurance companies that look at high risk people. People who've had heart attacks, because a lot of times if you've had a really bad heart attack or possibly more of the extents, they look at that as high risk because you could possibly have another one. Some of these people could still get life insurance, but the rates are gonna be extremely high. That's where people may look at the guaranteed issue. You don't have as much insurance, but you do have some insurance and it's pretty much gonna be more expensive than your regular term policies or your regular universal life, not having an illness. So like I said, it depends. If this is not a guaranteed issue policy, the insurance company is going to request some medical history in the application and they may do your underwriting, your blood, your urine and all that. They will look at the type of cancer you have, if you are in remission for how long, what if any treatments you are still getting, et cetera. Generally five or more years of remission without treatment. If you initially qualify, the next step would be a medical underwriting, which I said is the blood and the urine, that's all basically the它em important. They could take away thecoins and thinking of the intensive care unit. And they might pick up something that doesn't mention your research, or they might pick up a headline and they could do some by the board. Even if the presentation is not yet done, the patient is gonna go back to medical school via medical records and confirm their conditions and if you are using the student body and still未ations, you might know what the health emergency will be like because the patient is corrupt, they might need to feel uncomfortable so if that may be the case, you have multiple myeloma but you've been in remission for seven years, you have not had any treatment including maintenance, they say yes we want to insure you. However, if multiple myeloma crops up in the next year or two and you die as a result, then they may not cover that particular illness. So be aware of what the limitations of a policy may be before you sign on a dotted line. Next slide. What are riders on a life insurance policy? If you buy a life insurance policy or your spouse or someone buys a life insurance policy and you are put on there not as the primary insured, you may be the secondary insured at a different amount than the primary, then you are considered a rider on the policy. They will probably do underwriting on you depending on the amount of insurance. So if you are the benefit for this would be the whole policy in itself is generally less expensive when both people are well. If a person is ill, that person who's ill may have to do underwriting because they ask questions of the secondary insurer. Life insurance helps protect our loved ones in the event of an unexpected death but that sometimes is not enough. Riders helps a lot of solidify but in a place a really good policy. So again, what is a rider? Riders are optional. Extra terms that go into effect along with your basic policy often at additional cost. Some of the ones that are not additional costs but are considered riders are the accelerated death benefit. Accelerated death benefits are a huge benefit if you have a policy such a policy that they will pay out a death benefit, a portion of the death benefit for you to help you take care of health needs, health expense needs. Generally that's done if you're considered terminal and are going to be passing in the next 12 months. That's generally what an accelerated death benefit is there for and generally there's no cost associated with those. Riders are effective add-ons you can choose in addition to your life insurance death benefit at very economical rates as long as you're healthy, semi-healthy. They can make your policy very robust and broad covering more than just your death. So you can use that those benefits for the cash values prior to death. Next slide. So what benefits are available as riders on policies? This is an area of opportunity that many people don't review enough, pull out your policies, please review them. Again, if you have a personal insurance policy pulled out review, many if not most policies have some of the following benefits. The accelerated death benefit rider who just went over, a waiver of premium. Waiver of premium usually comes in effect. Let's say you became ill, you paid for that if you are ill, you don't have to pay premium as long as you're ill. Guaranteed return of premium. If for a period of time your policy is not covering an illness but you've been paying the premiums, they may guarantee the return of a premium or if that policy has been in effect for a long time for like permanent policies, they will guarantee return of premium no matter what that policy did because you may have a policy that's based on the market. That's when you have cash values. Paid up death benefit. Universal policies or whole life policies are really big with this. If you have dividends or interest or something paying into policies or any cash value, you may have it where depends on what these policies are, where the additional cash value will you can have a choice to have your death benefit paid up, which means your premiums aren't nearly as high, that additional cash value is paying up the death benefit. Accidental death benefit. If something were, and this is you don't find these a whole lot on life insurance policies but they have become a little bit more popular. Accidental death benefit, your writers used to be the stand-alone policies and they use, they're very, very, very, very inexpensive. They're pennies, like literally pennies on the dollar, but the qualifications to get some of those benefit from that policy, it can be extremely high. Accidental death and benefit. Accidental death, supplemental insurance policies are like that. So if you were to die accidentally, that sometimes it will pay out a portion of a death benefit. Critical illness writer. Critical illnesses have became, you had a life insurance policy and you end up with cancer, which is critical illness. You have access to cash value or you can access some of the death benefit as well. Income writer. If you wanted to have a policy that grew cash value, that's considered an income writer on it, where you can access that income as long as you've paid in more than the cash, more than in premiums, then you can take some of that cash out as an income writer. So a lot of people will structure some of these policies, usually they're universal life policies or variable universal life policies where you can structure them where you don't have to pay the premiums all the time, as long as you have enough money or cash value to pay the premiums or your life insurance costs. But you can access that cash benefit as an income. Critical illness writers and accidentally disability writers are the combination of the two that we've mentioned before. Next slide. So how do you purchase a writer? Generally those writers are purchased at the time that you are buying your policy. So they offer benefits, they offer extra coverage, which can be helpful at times of financial crisis as is, such as paying for the cost of in-home care if you needed it or healthcare. Buying a writer is much more economical than buying a separate insurance policy if you can even get insured at that point. It makes the insurance policy more economical, full, robust, robust, robust policy. It allows for the customization of your policy. If you have a very recent application or in the free look period, you may still be able to add some of these writers, check with your agent. Don't let that time pass without making sure you have a really good policy for your needs and take it and remember what life insurance policies can do for you not just leaving money for beneficiaries. Next slide. So life insurance loans. So you can borrow money from your policy prior to your death. Loans can only be taken from permanent policies such as whole life and universal life policies that cannot be taken from term policies because there's no cash value. They are structured completely different. Reduce the death benefit, it will reduce the death benefit if the loan is not paid off prior to the insured step. Does not mean you have to pay back the loan, but if you don't need that much life insurance, so that may not be a big issue because you may not have to leave that kind of money to a beneficiary, you may not have a beneficiary anymore, then paying off that loan may not be a big need, but it will reduce the death benefit dollar for dollar if you don't pay it off prior to your death. Under a customized policy, it may be possible to have a premium which exceeds the true cost of life insurance increase the death benefit. However, since you're paying for more life insurance, your cash value would be lower. So you can have the cash value pay off, pay increase your death benefit depending on how you're structured. Life insurance permanent policies, especially variable universal life policies, can be structured based on your need, based on when you want to have a cash value, based on how much cash value you estimate or hope to be able to have policy. You can have fixed rate insurance policy, so there's a lot life insurance policies can do for you other than being left for beneficiaries. Next slide. The cash value can grow based on the interest rate or the stock market. Universal life policies are part of this for the benefit of for the cost of your life insurance, and part of it is actually built into the stock market. So you have equity that's building or not because it has risk associated with it anytime you're in the stock market. So you have benefits, things that can outweigh or boost your death benefit. It usually takes a few years for the cash value to build up sufficiently to take out loans because there's a cost of that policy. You may also be tampering with guarantees of the policy if you do not stick to the premiums and accumulate cash on a certain level. If you took money out, enough too much money out, you may even explode your policy up because you may end up, you may also have to end up paying more policy. So you have to be very aware, very meticulous about keeping up with the type of policy you have, keeping up with the cash values, what the market's doing because you know the market swing quite a bit to make sure you have the cash value in there. If you take it out too much and you have a loan on it, you may end up having to come up with money to get that policy where it needs to be without it exploding on you. Loans will not affect your credit if you're taking a loan out on life insurance policy that I kind of mentioned earlier. There isn't an approval process. The loan remains tax-free as long as the policy stays active, as long as you're paying your premiums, as long as you're keeping that policy in effect. Interest rates are typically higher and life insurance interest rates are typically higher. The loan reduces your available cash value and death benefit because it's reduced dollar for dollar for what you take out. Next slide. So how much money can you borrow from a life insurance policy? That depends on what company you go to or the policy, who the insurance company is that will allow you to take loans out of that policy. They have different rules in place but in general the most you can borrow against your life insurance is up to 90% of the cash value. That's significant and can take that out as soon as there's enough cash value built up in a loan in the amount that you need. Depending on the structure of your policy, again, that can be structured. There's a lot of ways to structure your policy. It could be very different. It can take several years to accrue a reasonable amount of cash value because you have the cost of insurance and there you have to cost of there's a lot of there's a what you call it kind of like hidden costs associated with some of these policies. So you make sure that there's that money is there to make sure those those costs or fees are taken care of first and then your cash value would would start building based on what the market's doing if you have an universal life policy. So talk to your insurance agent and and come up with all these scenarios. Say what if, what if, what if, what can I do, what do I, what may I possibly need the money for and they can play around with an infrastructure of policies for you if you're able to be insured. That's a big caveat here, right? Are you able to be insured? But again, don't forget your spouse who is not, who may not have an illness, who may be in reasonably good health, they may be able to take out a policy that's going to benefit them later on. Next slide. So paying back the loan, loans do have an attached interest rate just like any other loan that we have that's added to the loan balance. If the loan is not paid back in a timely manner on top of your regular monthly premiums, the unpaid interest is added to the balance and accrues. So it's almost like those, you say student loans they never go away, they will accrue that interest. If the value of the loan exceeds the policy's cash value, your policy will lapse. That is why it's very important to know, take out only what you need and make sure you pay your policy and make sure you're aware of what's going on. You could have, if you've done something like this in the past, or you have a cash value policy, you might want to have them run a estimate what your policy, give you an idea what your policy is doing. If you haven't looked at your policy in a while, it's very important to keep up with those. You may also have to pay taxes on the amount that you borrowed. That is what you want to stay away from. If the loan isn't paid back prior to death, the principal loan amount as well as the accrued interest is taken out of the death benefit. So now you're going to reduce the death benefit to your beneficiaries. So you need to be aware of all of these things when you take money out of a cash value policy. Next slide. So withdrawals and loans. Loans are different from withdrawals. Withdrawals may be available after several years, depending on the structure of your policy and how you've paid it to the policy. Some policies will allow you to pay more than a regular premium. A 10-year pay-in is really going to build your cash value a lot faster. So it depends on how your policy is structured. You can generally withdraw from your permanent policy and avoid taxes as long as the withdrawal isn't more than the amount you've paid into the policy. There has to be a quarter for life insurance and the cash value so it won't be just as if it's just an investment account. It has to be specified. It is really an insurance policy. The cash value can also be used to pay for the life insurance premiums. So if you have enough cash value in there and just say you have a policy and you have $20,000 worth of cash value. Your premiums are $900 a month and some of that goes toward the cash value. To build a cash value up, that's the investment side. The other is paying for your actual cost, pure life insurance. You can say, I don't want to pay my life insurance premium this month or next month or for the next six months as long as you have enough cash value to pay for the whole, the real true value of your insurance, not necessarily that plus the investment apart. So you can skip payments. You can pay that up or you can pay additional into your policy depending on how it's structured. So you will reduce the death benefit if you take withdrawals out, eliminate certain policy guarantees, like no lapse guarantees, and you may cause a policy to lapse if you're not paying it enough in there to keep your cash value above your death benefit or cost of your true life insurance. Next slide. So what if you don't use your cash value? That's a very good question. In fact, my husband had a cash value. This is a really good example. My husband took out a life insurance policy and I did it for him. I'm an agent. In 2001, because we're like, you know, we were watching these commercials on television that one in four people may be touched by cancer. They say, oh, we need to get life insurance. My husband was 10 years older than I. So I went and I purchased him a universal life policy. That is the one that has life insurance and it has cash value because you're investing a portion of that into the market. It could be as aggressive as you want it to be or as conservative as you want it to be as if you are actually investing in the market. So we took that policy out and he had the option to pay different types of premiums. The max amount that you could pay into a policy to prevent it from becoming an insurance policy, not an insurance policy, more of an investment. You can pay for 10 years. You can pay a single lump sum premium. However you did it, but you're going to have cash value. So he was paying quarterly on his premium. He was not putting in the max, but he was putting in more than the minimum. He paid that for, I think it was $1,390 a quarter. It's $300,000 worth of life insurance. That's for the death benefit. So he did that for, I don't know, five, six years. We were in a really good market. The market was just really doing well. When he passed in 2013, he had taken, I think it was 2001, in 12 years that cash value, and he stopped paying his premiums after four years. No more premiums. He said, I'm just going to let it pay for the cost of my life insurance. When he passed in November 2013, he had over $70,000 in cash value in that policy. So you can see the benefit for that. In addition to that, when I went to buy more insurance for him, now we're in 2003, just two years later, he could not buy insurance because now he had MGUS. So you can see and understand that he was young when he was diagnosed. So you can understand that the importance of doing planning for yourself and your spouse and your family sooner versus later, and making sure that not only are you taking care of yourself, but you're taking care of your spouse as well. Making sure they're covered. If they needed life insurance, take care of some of their expenses later on. If you're not there, this goes for men and women. Make sure that you are making sure everybody's covered, that they can be covered for what you can afford. So after the time, the cash value can accumulate larger than the face value or the death benefit. You have options to have accumulated cash value to increase the death benefit, and it would reduce the cash value accordingly. Next slide. So you can surrender a permanent policy. That means you decide, I no longer want this policy. I don't need it anymore as cash value. I want to surrender to policy. Depending on when you surrender to policy, you may have fees associated with it. Maybe 10 year, 6, 7, 8, 9, 10, 12, 15 year surrender period, which means you're not going to get all that cash value back. You're going to have a percentage that they're going to take back because there's a cost of doing business, a cost of all these other associated costs. You may not get all that cash value. If you surrender your policy, you're getting rid of that policy. They're going to give you whatever cash you're owed or due at that point is built up in that cash value, and you will no longer have life insurance. I've known people to do that because they had a lot of savings, and they felt like the policy, the insurance policy was not something that they want to continue putting their money in. It wasn't benefiting them. Before you cash out of policy, talk to your financial advisor, find out if there's going to be any tax ramifications of you doing so, make sure that you're not surrendering something you may need in the future. Tax benefits of life insurance. Most people don't consider the tax benefits of life insurance when tax season rolls around, but you should because if you especially fit cash value policy, that could benefit you. Three tax advantages you should consider. The death benefit is generally paid out tax free to beneficiaries. There are instances when taxes kick in on the proceeds of life insurance policy. If your life insurance is part of a very large estate that I mentioned earlier, talk to your financial advisor to review your options. You may look at different estate planning to make sure your trust or things like that eyelets for your beneficiaries, protect them from taxes on the back end. The total cash accumulation on a tax deferred basis, just like an IRA, as you pay your premiums in. In the case of whole life policies, the rate that the cash value accumulation is based on rate guaranteed by the carrier that isn't affected by market conditions. These are generally, they have done investments maybe in fixed vehicles, and they know what the interest rate is going to be or how well the company is doing. They may be paying a portion of cash into your policy based on that. So it's not based on your universal life policy that may be invested in the market. Next slide. Other types of permanent life insurance allow for different investment options, which are affected by market conditions like the universal life policy I mentioned. They may offer a greater opportunity for cash accumulation and you have greater flexibility with your premium payments and everything. Because the cash accumulates on a tax deferred basis, it becomes an important nest egg for your future. So you can access the cash value of the policy on a tax advantage basis for supplementing your retirement income. No taxes up to the cost basis. Cost basis is what you've paid into the policy on cash taken from the policy. Anything above that may be taxed. Next slide. Viaductal settlements. Now as a financial advisor, we kind of shy away from these things because the benefit is using those companies that we're selling these policies. This is a last ditch resort when you have a life insurance policy. A viaductal settlement is an arrangement in which someone who is terminally or chronically ill, two years or less to live, sells their life insurance policy at a discount from its face value for ready cash. The policy owner is relinquishing the right to a death benefit to the beneficiary of their choice. The buyer of the viaductal settlement pays the seller a lump sum payout and will also pay the remaining premiums left on the policy. That's why they are giving you a less of a lump sum because they're going to pay the premiums on your behalf and give you some of the cash value. The buyer of the policy is now the sole beneficiary and cash is in the fold at the benefit when the original insurer or owner dies. So viaductal settlements are to the benefit of that company who is buying that policy. So that is a last resort and you'll have a hard time finding a financial advisor to say please run and go do that. Okay there may be other options available for you. Next slide. Again, review your policy. I don't care how new it is, how old it is, or you're thinking about getting a policy through your job or you have one through your job. Review your policies and look at the options that you have available to you. Determine your need for insurance and the amount. Take advantage of employer benefits or possible life coverage after employment termination and before you terminate. Take advantage of tax preferred benefits. If you have a term policy, consider non-medical underwriting conversion privileges like converting part of it or all of it into a whole life policy. Options to take loans, withdrawals, or surrender, these are all options for you to look at. Make sure you review your policy and find out what benefits, what options you have. If you can add a rider or if you are still in the surrender period, the free hook period, you still have a lot that you can do with your policy. You can change that policy out and get rid of it or have them make an extended or increase in death benefit. Add riders to it. There's so many things you can do with your policies. Don't let a policy go away without looking at it. I think that's the last slide. Yes, yeah. Thank you, Diana. That was such great information. I know it was a lot of information to my audience. I had some people asking if they would receive these slides and the answer is yes, you will receive these slides as well as the recordings so that you can go over this. You can take notes again. You can clarify things and we also have time for some questions and answers if you want to enter in your questions now and Diana will answer them to the best of her ability. Diana, let's start with this one question you did mention. I'll just ask the question then we can talk about behind it. The question here is, is it possible to obtain life insurance if you have MGUS and not being treated? Now, this one's a difficult question because MGUS is a precursor disease. There's no guarantee that you're going to develop multiple myeloma, but my understanding is life insurance companies see it differently. What's been your experience? They do. I can give you my personal experience. My husband's personal experience. When he went to get additional life insurance policy, that showed up. In fact, I didn't know what it was. They called me, the underwriter called me, and they never called the agent, but they were so concerned. They called me and said, we found something on his blood, his underwriting, and this is just the same kind of underwriting they're going to do for everybody. We need to get your doctor immediately. I had to give them only telephone number. That's a lot of money. I had to give them my doctor's number. I had to only give them telephone number. That's the only information they gave me. I gave them telephone number, fax number, address, everything. I saw you fax everything over to my husband's doctor. We went in the next day because I'm panicking because I've heard of horse stories. It turned out to be a horse story. It was in a dust. They said, we can no longer insure him. Good luck on finding insurance. If we try, we cannot find insurance. Now, let me qualify that. That was back in 2002, 2003. There are insurance companies that have insurance policies that will insure people. The problem with them, guys, even though they say you may not convert into myeloma for 25 years, if it ever converts, there's that risk they can convert. Like I said earlier, there may be some qualifications that they will not cover. They may give you an insurance policy that may be extremely high. They're in companies that will do very, very high risk policies. It may be very expensive, but they may say, if you end up with myeloma, we're not going to cover you in the event of a death from myeloma. Which is so frustrating. I think really the best thing, what I'm hearing from you is the best thing is to try. You don't know until you know. You might as well investigate and ask and see what's available to you. One of the things is if you go, I would suggest if you're going to get that done, go to a broker who has all of these insurance carriers in front of them because they can go in and turn in and they know who the high risk insurance companies are. They can send that information in because they'll say which things automatically are going to be declined. They can send those in and one fell swoop and get those back. That way you won't have an insurance policy, deny, deny, deny. It's going to get harder and harder to get insurance policy because they have these denials out there. Right. Right. Okay. Daniel did ask, is life insurance usually still granted to patients with multiple myeloma? This was at the beginning. I feel like you explained this pretty well in terms of if you are in complete remission, MRD negative, there may be a chance that they're willing to grant you and it's been several sustained years. They may be willing to grant you if you haven't had any medication, but it just, you just run the risk of anyway, it's not as black and white as we think it is. And I would definitely not advise anybody to not take medication because they're wanting to get life insurance. Oh, please don't. Show up when they do the underwriting anyway. Right. Exactly. Exactly. So to everybody, it's a great question, Daniel. And if you have any other questions that Diana did not cover, feel free to ask those as well. Wendell sends his regards, Dana. It says wonderful to see you. This is such an important topic. What's your insight on indexed universal life insurance policies? Those are great policies because you have a lot more protection. You have some protections on index. It's a lot more passive investing, just like indexed annuities or index mutual funds. It's based on an index. So you have, it's not based on all of this happening with your reduced risk because you're not just out there in the market going when the market goes up and down. They have some great benefits out there available to them. Sometimes they could have those as split policies where you have additional things available to you, such as long-term care attached to them. But again, we're still talking about underwriting that's going to be in a lot of these policies. Yeah, definitely. Thank you. Question. If you can't get whole life insurance due to cancers, the D&D insurance offered by many credit unions, a viable option. D&D. I've never heard of that. Do you mind expanding what D&D is? What is D&D? Yeah, I'd be interested to know. I'll move on to the next question while we wait for clarification. So this question is, what about saving money by going through an online insurance company rather than an agent? A lot of those online companies, the agents will still have access to. Like Eros, I think Eros is one of them. There are companies where you can go in and get insurance. They're going to do the same thing, just like Progressive. They're going to do the same thing and go out there and look at all the policies. They're just brokers. They're just brokers online. That's going to be the same thing. An agent can give you a lot more upfront information. They'll be able to run a lot more illustrations. They'll be working with you specifically. Cost-wise would it be the same? They're going to be based on your life. They're going to be based on how much you're getting. They're going to be based on market rates. They're going to be based on your age, your health. They're basically all going to be the same thing. Yeah. In regards to the D&D, it stands for death and dismembership. It's insurance offered by credit. Okay. So death and dismemberment policies are those policies where I said they're very inexpensive. My husband had one as well. The death part paid out the amount of premiums he paid into the policy. That's how he has worked. If you're in an accident, the criteria to cash in on the dismemberment part was if you left off two fingers, the left two fingers on the right hand plus a toe on the right. It's all these things or this much of an arm or this much of a leg or your right eye. The dismemberment part is good luck on that part. Death and dismemberment policies are pennies on a dollar. They do have some death benefit. You get to choose the death benefit you're going to pay into. But again, depending on what insurance company is issuing those policies, you may have underwriting attached on how much you're paying. This one specifically said it was a credit union that was offering this. I'd be interested to know if they do underwriting. It's almost just like when you get a credit card. It's really interesting. Credit unions generally have rates on credit cards and rates on bonds and everything. They're a lot less than your regular banks because they don't have as much overhead. They're not considered the same as banks. Check those out. It may be like a group, almost like a group because you're a member of a credit union. It's almost like those member associations I was talking about earlier. It doesn't hurt to ask. Yeah. Okay. We have reached the end of our time. I'm just going to go rapid fire through a couple of these. Nancy says after 20 years on no premiums because of disability, my husband was again asked to prove that he was disabled. It was a lot of trouble, but in the end we discovered he was entitled to $15,000 from the policy because of his disability. We had no idea. It just goes to your fact of read, read, read and try to understand what your policy benefits are. Cristina says, our doctor said they're moving towards continuing maintenance meds more than two years. Are insurance policies keeping up with the latest recommendations since so much is happening so quickly? What's your insight on that, Diana? Do you think with their different policies, do you think they're... We should say insurance policies, insurance keeping up with that. I don't understand what she means. Yeah. I'm not sure what she meant either. I don't know if you mean like insurance, like health insurance or life insurance there. Life insurance, they don't keep up with that stuff. It's not going to matter how long... They're looking at your blood and how much... They're looking at... And there was another question here. I'm newly diagnosed, treatment's not started. Can I still qualify for life insurance? They're looking to see what diseases you have in your body. It doesn't really matter, I think, and correct me if I'm wrong, Diana, it's more about what's going on in your body versus what medications you're taking. Is that correct? It could be a combination. They look at medications too. He's already diagnosed. That's it. As long as... Unfortunately. I went into the doctor and had some tests done last week. I got the test results today and it's already in the charts. It's already the medical records are already in medical records. Yeah. I mean, it's disappointing. I'm not going to sit here and say like that it's okay that they do this. It's not okay. People with cancer deserve to have life insurance just as much as people without cancer. In fact, maybe even a little bit more because you're financially pressed for the medications, you're financially pressed for the transportation to the doctor, et cetera, et cetera. And then you're expected not to be able to qualify for something that could financially benefit you and your family. So it's frustrating. It's not okay, but unfortunately we just have to convene the facts here and just say it is what it is and we need policies to change that. Globe life and then life. Those are guaranteed issue policies. And then look at your credit card, see if they have insurance policy, small ones. I mean, and they have policy if they can add you, if they're working. Yep. Go over this recording, the slides again and see, you know, there are options for you. Unfortunately, they just might be a little bit more expensive for you. Yep. All right. Well, I know we have more questions, but I want to be respectful of your time, Diana, and just thank you so much for being able to present to the group today. Is there any last things that you'd like to say before we finish up for today? Well, actually, if you have more questions, please send them to me. Send me an email. I'll be glad to respond. And I'm going to do a, there's an article coming out on this to top off this, to give you more information. Look for that article in our newsletter. So if you have any time you have questions, please send them out to us. I'll be glad to answer. Awesome. I put your email in the chat so that people can send those to you. Thank you, Diana. We're going to finish today with a couple of outro announcements and then we can finish. Everybody can go. Our next meeting will be in September. We're going to start meeting every other month. We're going to be talking about social security, disability insurance, and how to file in tips for getting improved, approved, excuse me. We have an event this Thursday. It's going to be a dance live demo. And then on the eighth, we don't have events for pretty much the rest of July, although one might be pending. I'll let you guys know. On August the eighth, we have our SoCal MyLuma chapter. I hope you guys are all enjoying your summer. Another thank you to our sponsors, Amgen Abbey Adaptive, Janssen, Genentech, and Bristol Meyer Squibb. And thank you to each of you for helping us build this community. I hope you have a great rest of your day, everyone. Take care. Bye-bye.