Yes, Cancer Patients Can Sell Their Life Insurance
If you've been diagnosed with cancer — particularly advanced or terminal cancer — you may be able to sell your life insurance policy through a process called a viatical settlement. You sell the policy to a third-party investor, receive a lump sum (typically 50–80% of the death benefit), and the buyer takes over the policy including all future premium payments.
This can provide significant financial relief during treatment. But there's a major trade-off: your beneficiaries receive nothing from the policy. The buyer — not your family — collects the death benefit.
The Alternative: Keep Your Policy
A Living Benefit Loan offers a different approach. Instead of selling your policy, you borrow against the death benefit. You keep full ownership. Your beneficiaries still receive the remaining death benefit after the loan is repaid.
| Factor | Sell (Viatical) | Borrow (Living Benefit Loan) |
|---|---|---|
| Amount | 50-80% of DB | Up to 50% of DB |
| Speed | 2-4 months | 3 days |
| Keep policy? | No | Yes |
| Family protected? | No | Yes — remaining DB |
| Credit check? | No | No |
| Monthly payments? | N/A | None |
| Term life eligible? | Sometimes | Yes |
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When Selling Makes Sense
A viatical settlement may be the right choice if:
- → You need the absolute maximum cash available
- → You don't have dependents who need the death benefit
- → You can wait 2–4 months for the settlement to close
- → You want to eliminate premium payments entirely
- → You've already exhausted other financial resources
When Borrowing Makes Sense
A Living Benefit Loan may be better if:
- → You have a spouse or children who rely on the death benefit
- → You need cash urgently (treatment starts soon)
- → You want to keep your options open (you can always sell later)
- → You have term life insurance (harder to sell)
- → You don't want to go through months of medical underwriting
Other Financial Resources for Cancer Patients
Before making a decision about your life insurance, explore these resources first:
Frequently Asked Questions
Can cancer patients sell life insurance?
Yes, through a viatical settlement. Typically 50-80% of death benefit, but you lose all coverage.
Is there an alternative to selling?
Yes — a Living Benefit Loan borrows against the death benefit. You keep your policy and beneficiary protection.
How much can I get?
Viatical: 50-80% of death benefit. Living Benefit Loan: up to 50%. The trade-off is coverage vs. cash.
How long does it take?
Viatical: 2-4 months. Living Benefit Loan: 3 business days.
Is a viatical settlement taxable?
May be tax-free for terminal illness under IRC §101(g). Consult a tax professional.
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Further Reading
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