How to Turn Your Term Life Insurance Policy Into a ‘Cash Cow’ for Health Expenses

Checking the living benefits on your term insurance plan is the first step.

No one likes to think about needing help doing basic life tasks like dressing, bathing, and eating. Maybe one of your parents or another friend or relative currently needs this kind of help—and they are probably spending tens of thousands of dollars to get it. 

About 60% of Americans 65 and older can expect to use some form of long-term care. Long-term care for the growing elderly population is one of the biggest problems facing our nation and our individual financial security.

Yet few people have a plan to make sure they don’t have to sell assets at the wrong time, liquidate stock and pay taxes, or worse, pay out of pocket for expensive health care that Medicare doesn’t cover.

Not being insured can be the single biggest devastator of a financial plan. 

Unfortunately, there aren’t a lot of insurance products available to address this need—but you can turn your term life insurance policy into a “cash cow” if you ever need money for health care. 

Would you pay 10% more to get a term life policy that you could draw on during your lifetime? What other asset or instrument can produce this result? Photo by Vlad Deep on Unsplash.

How it works

There are a few “niche” insurance companies that sell term life insurance “with a twist”: The policies have living benefits attached, provisions that will pay for chronic and critical illness, the same triggers as a long-term care policy.

You get to draw against the death benefit, while you’re alive, to pay for care—think of it like springing value from a empty oil well—except you must have the right policy. (It’s not your father’s term life policy.) It’s a new concept only a handful of insurance companies offer, one that isn’t largely marketed.

Obviously, you have to qualify, and this approach won’t work for everyone.

But don’t wait till your health changes to address this issue. Creating a plan for tomorrow, using the newest strategies and products, and advancing your planning could save your family hundreds if not thousands of dollars, and create the life and comfort you spent a lifetime accumulating and protecting. 

Marty Levy, CLU/RHU is a Calabasas resident and founder of Corporate Strategies Inc./CorpStrat, located in Woodland Hills, Calif. A 30-year insurance industry veteran and Lifetime Member of the Million Dollar Round Table, Levy is an expert in long-term care planning strategies. You can reach him at (818) 468-0862 or