Aflac Supplemental Insurance (2024)

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Term life insurance is designed to help protect your loved ones financially if you suddenly pass away. It provides them with a death benefit and typically expires after 10, 20, or 30 years.

Term life insurance differs from whole life insurance and other permanent policies in that you can’t cash it out. However, you may be able to sell your term life policy. Let’s dive deeper into term life insurance, what policies you can cash out, and alternatives to cashing out a term life policy that you might want to consider.

Can you cash out term life insurance?

Since a term life insurance policy doesn’t come with a cash value component, it’s not possible to cash it out. This policy solely includes a death benefit that your beneficiaries may receive if you die before the end of the policy’s term. Permanent life insurance, such as universal and whole life policies, comes with a death benefit and a cash value account that you may can cash out while you’re still living.

Can you sell a term life insurance policy?

You may have the option to sell a term life insurance policy to a third-party company. This process is known as a life insurance settlement. Selling your policy depends on several factors, such as the insurance company you chose, how much coverage you have, and whether your policy can be converted. Keep in mind that with a life insurance settlement, you'll sell your policy for less than the death benefit.¹

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How to sell your term life insurance policy

Here are the basic steps you can take to sell your term life insurance policy:²

1. Find a reputable broker: You’ll share information and documents regarding your policy with a broker. Then, the broker will let you know whether or not it’s feasible to sell it.

2. Make a sale: The broker will do their research and likely match you to a buyer who will take over your policy. You can expect the buyer to pay the price you agreed to and make the premium payments on your behalf. Then, once you pass away, the buyer will receive the death benefit payout.

What life insurance policies can you cash out?

Here are some common types of life insurance policies that can be cashed out:

Whole life insurance

Whole life insurance lasts for the rest of your life if you continue to pay your premiums. With this permanent life policy, part of your premium payments helps build cash value, which you may be able to take advantage of through a withdrawal, loan, or policy surrender.

Universal life insurance

Universal life insurance is a permanent policy that lets you change your premiums and death benefit over time to meet your needs. There’s also a cash value account, which earns interest and allows you to withdraw money from or borrow against it. Universal life policies typically cost less than whole life insurance.³

Variable universal life insurance

Variable universal life insurance involves a cash value component that you have some control over. With this type of permanent life insurance, you can choose from various investment options that are based on market performance, rather than a specific interest rate.

Alternatives to cashing out or selling a term life insurance policy

If you have a term life insurance policy you can’t cash out and you don’t want to sell it, consider these alternatives:⁴

Adjust your term life insurance coverage

Many life insurance companies understand that life happens and are willing to work with you if your premiums are no longer affordable. If your life insurance company allows it, you can lower your coverage level and enjoy lower premiums. This option is worth considering if you’re struggling to pay your premiums.

Convert to a permanent life insurance policy

You might be able to convert your term life insurance policy to a permanent policy that builds cash value, such as whole life, universal life, or variable universal life insurance. Just keep in mind that your premium payments will increase.

Cancel your term life insurance policy

You won’t receive any benefits if you cancel your term life insurance policy or let it lapse. But going this route can get rid of your premium payments if you need to make more room in your budget.

Learn more about life insurance

Permanent life insurance comes with a cash value component that you can access in several ways. While you can’t cash out term life insurance, you can sell your policy. Additionally, you may have other options if you want to change your coverage, such as lowering your premium payments or converting to a permanent policy.

Aflac offers term life insurance with premiums that fit most budgets. But if you prefer a life insurance policy with cash value, you can consider getting a whole life insurance plan. Chat with an agent to learn more about the life insurance policies we offer and get a quote!

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Disclaimer

¹ The Annuity Expert. Can You Cash Out a Term Life Insurance Policy? https://www.annuityexpertadvice.com/can-you-cash-out-term-life-insurance-policy/. Accessed April 18, 2023.

² The Motley Fool - How to Sell a Life Insurance Policy. Updated February 21, 2023. https://www.fool.com/the-ascent/insurance/life/sell-life-insurance-policy/. Accessed April 10, 2023.

³ Forbes – Whole Life vs. Universal Life Insurance. Updated March 6, 2023. https://www.forbes.com/advisor/life-insurance/whole-life-vs-universal-life-insurance/. Accessed April 18, 2023.

⁴ Policygenius - Can You Sell Your Life Insurance Policy? Updated January 31, 2023. https://www.policygenius.com/life-insurance/can-you-sell-your-life-insurance-policy/. Accessed April 10, 2023.

Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.

In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400.

Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company.

The life insurance policy described herein contains an optional Accelerated Death Benefits Rider that is intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code. Aflac does not give legal or tax advice. Please consult with a qualified legal, tax, and accounting advisor before engaging in any transaction. In AR, AZ, ID, OK, OR, PA, TX and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22.

Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions. For complete details, including availability and costs, please contact your local Aflac agent.

Content within this article is for informational purposes only and does not constitute legal, tax, accounting or medical advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer will have to consider in their benefits decision-making process.

Aflac does not offer Universal or Variable Universal life insurance.

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FAQs

What does Aflac supplemental insurance cover? ›

Supplemental insurance can complement a variety of health insurance plans by providing specific coverage for accident, cancer, critical illness, hospital, short-term disability, dental, and vision. We can help provide support in one or multiple of these areas.

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Is supplemental insurance enough? ›

For many, supplemental health coverage can be a cost-effective way to help with out-of-pocket costs. Here are a few of the advantages to supplemental health insurance plans: They typically come with affordable monthly premiums. They can offer financial support when you experience unexpected medical situations.

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Does Aflac actually pay out? ›

In the event of a covered accident, the plan pays cash benefits fast to help with the costs associated with out-of-pocket expenses and bills—expenses major medical may not take care of, including: • Ambulance rides. Wheelchairs, crutches, and other medical appliances. Emergency room visits. Surgery and anesthesia.

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What percentage of disability does Aflac pay? ›

Here's why the Aflac group disability plan is right for you. The Aflac group disability plan benefits: Benefits are paid when you are sick or hurt and unable to work, up to 60 percent of your salary (up to 40% in states with state disability). Minimum and Maximum Total Monthly Benefit – $300 to $6,000.

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How does supplemental insurance work? ›

Supplemental insurance is a limited-benefit policy that provides additional cash benefits – typically paid directly to the policyholder – in the event of a medical condition or circ*mstance that's covered by the policy.

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What does supplemental insurance include? ›

There are many different types of supplemental health insurance, including vision, dental, hospital, accident, disability, long-term care, and Medicare supplemental plans.

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What is the average cost of a supplemental plan? ›

The average Medicare Supplement plan costs in every state

State	Monthly Cost	Rank from least expensive (1) to most expensive (51)
California	$162.93	45
Colorado	$127.76	29
Connecticut	$227.06	49
Delaware	$150.99	42

29 more rows

Oct 4, 2023

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What age should you get supplemental insurance? ›

If you are 65 or older, you may be able to purchase a Medicare Supplement insurance plan during the Medicare Supplement Open Enrollment Period. This period lasts for six months and begins on the first day of the month in which you are both 65 or older and enrolled in Medicare Part B.

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Do I need Aflac if I have Medicare? ›

As individuals reach the age of 65, they become eligible for Medicare, the government-sponsored health insurance program. While Medicare covers a significant portion of healthcare costs, it may not cover everything. This is where Aflac Medicare Supplement Plans come in handy.

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What does Aflac not cover? ›

We will not pay benefits for confinement to an observation unit, or for emergency room treatment or outpatient treatment.

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What is the most Aflac payout? ›

ACCIDENT SPECIFIC-SUM INJURIES BENEFITS: When a Covered Person receives treatment under the care of a Physician for Accidental Injuries sustained in a covered accident, Aflac will pay specified benefits ranging from $35– $12,500 for dislocations, burns, skin grafts, eye injuries, lacerations, fractures, concussion, ...

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Why would Aflac deny a claim? ›

When Aflac denies your claim, they must provide you with the reason. The main reason why they will deny your claim is they do not think you meet the plan's definition of disabled.

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What gives 100% disability? ›

The 100 percent disability rating is often awarded to veterans with two or more limbs that have been amputated or paralyzed or for veterans with active service-related diseases such as cancer, severe cardiac conditions, or psychiatric conditions such as PTSD, bipolar, depression, or schizophrenia.

What is the average monthly cost of aflac insurance? ›

Many Aflac policies range anywhere from $8 to $25 or more per month.

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What's the most disability will pay? ›

Social Security Disability Insurance (SSDI) – The maximum payment is $3,822 a month (up from $3,627 in 2023). The maximum family benefit for SSDI is about 85% to 150% of the disabled worker's benefit. The maximum payment at full retirement age is $3,822 monthly.

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Does Aflac have supplemental health insurance? ›

Aflac offers various supplemental health insurance plans to help provide support in specific coverage areas. A few popular options are dental, critical illness, hospital, accident, cancer, short-term disability, final expense, and vision insurance.

How much will Aflac pay for surgery? ›

This benefit is limited to one payment per calendar year, per covered person. No lifetime maximum. Surgical Benefit Aflac will pay $100–$2,000 when a covered person has surgery performed for a covered sickness in a hospital or ambulatory surgical center based upon the Schedule of Operations in the policy.

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What does an Aflac policy pay for? ›

Your Aflac benefits check helps you pay for the many out-of-pocket expenses you incur when you are sick or hurt-like the cost of transportation to and from medical facilities, parking, and additional child-care expenses.

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