My husband has a life insurance policy through his job and it has an accelerated rider. He is dealing with stage 4 cancer right now. I found out that the policy pays out 50% of the 50,000 coverage. But there’s a note in the fine print saying that they charge interest which gets added to the remaining benefit. It also mentions that if the policy runs out before he passes away, we might have to pay something back.
Has anyone been in a similar situation? This feels so unfair but maybe all policies are like this?
He won’t be able to return to his job, so the policy will end in May 2025.
Lex said:
You don’t have to pay it back. The payment and interest are paid back through the death benefit you will receive.
What happens if the policy ends in just 2 months?
To be sure, I’d need to check the actual policy wording, but usually, riders for terminal illness work as a loan against the future death benefit. The payout and any interest would reduce what you get at death.
It’s a good idea to contact the insurance company and ask them directly, and if allowed in your state, record the call.