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What is life insurance?

Anne Fabiny
Geriatric Medicine
Life insurance pays benefits upon a person's death. Some policies also act as collateral that the insured can borrow against. Or it may be possible to collect benefits early to apply them to home services or long-term care. Called "living benefits" or "accelerated benefits," these arrangements vary greatly in how much is paid out, whether payouts are a lump sum or regular payments, and who can invoke this option. Generally, the insured must have a year or less to live. Of course, life insurance should not be casually cashed in even when money is tight. Often arrangements to raise funds this way pay only a fraction of what the policy is worth and may have an impact on taxes and eligibility for other benefits, including Medicaid.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.