I have a relative who has a nice life insurance policy out for me, but it's sad to hear that they likely won't die anytime soon. I am wondering if there's any way one can cash in on some of the policy even while the insured is still living. For example, say they can reduce the life insurance by 50% if they give me a fixed-portion of the value right now. Here are some figures:

$500,000.00 life insurance. I'd like $100,000.00 right now. Can they reduce the policy to $250,000.00 and give me 100K and then pay the rest when the relative dies?

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    "...it's sad to hear that they likely won't die anytime soon." With relatives like you, who needs enemies? – Wesley Marshall Sep 24 '17 at 6:22

I recall the following business from the AIDS crisis: viatical settlement But because there were life-extending treatments developed in the 1990s, many third parties which engaged in these took a bath and it's not as common.


If the insurance policy is a whole-life (or variable life) policy, it might have a surrender value that the owner of the policy might be able to get by surrendering the policy in whole; if it is a term life policy, it has no surrender value. In many cases, the owner of the policy is also the insured and so ask Uncle Joe whether he would be willing to surrender the life insurance policy and give you the proceeds now instead of making you wait till he passes away. If it is a term life policy, ask him to consider not renewing the policy and from now on, just give you the premium he would have been paying to the insurance company. Whether he will pay you increasing amounts in later years (as a renewable five-year level term policy might require) is a more delicate matter that you can negotiate with him. On the other hand, if the policy owner is Aunt Annie but the insured is Uncle Joe (and you are the beneficiary), talk to Aunt Annie instead; she is the one who can cancel the policy, not Uncle Joe. And for heaven's sake, don't grease the skids to facilitate Uncle Joe's first step onto the stairway to heaven; there are, depending on where you live, various laws prohibiting payments to beneficiaries who have had a hand in arranging for the happy event to occur.

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    And there are also laws that, if you make such 'arrangements', will lower your living expenses by providing you with housing, clothing, and food -- albeit not ones you choose :) – dave_thompson_085 Sep 29 '17 at 9:51

Generally no. It does not make sense for insurance company to alter terms and if there are such rules it can be subject to misuse.


The short answer is "No".

There a 2 ways to get cash from a life insurance policy. If the policy has cash value greater than the surrender value, then the difference can be borrowed, but will generally increase premiums in the future.

The other method, available on many term policies allows the owner to receive part of the death benefit if the insured has a physician willing to certify that he/she will probably pass away within a 12 month period. Several carriers also offer cash benefits for critical care.

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