People are told to plan for the future almost constantly over the course of their adult life. Nevertheless, we know the reality is too few actually heed the warnings and they don’t secure insurance or financial products that can mitigate their future risks. The vast majority of people will be unprepared to shoulder the costs of retirement and long-term care when their time comes. The costs of long-term care alone can be staggering. A person could easily spend $100,000 or more over the course of a year or two. However, what if you could use an existing asset, such as a no longer needed life insurance policy, to cover the costs so that your income and legacy are protected—all while ensuring that your health and lifestyle are lived with quality, dignity, and choice? People are doing it every day.
Millions of seniors needlessly throw away a life insurance policy without realizing it can be used to help them pay for any kind of senior care they want. In fact, of $30 trillion of in-force life insurance coverage between 1990 and 2010, approximately $24 trillion of in-force life insurance coverage was abandoned by the policy owner (ACLI, 2015). An unfortunate reality is that the vast majority of people who own life insurance policies will make premium payments for years, and then as they reach the point that they need senior care services, they will surrender their policy for pennies on the dollar or they will stop paying the premiums and allow it to lapse. Once a life insurance policy is surrendered, the insurance company will no longer be obligated to pay a death benefit. There may be no way for the policy owner to get it back.
What if there was a better option than abandoning a policy after making payments on it for years? What if instead, a life insurance policy could be used to pay for senior living and long-term care expenses? Well, the good news is that it can. If you own a life insurance policy, it is your legal right to use the policy for more than just a death benefit. In fact, a life insurance policy is an asset just like your home. It is considered your personal property. Similar to making mortgage payments on a home month after month, you make premium payments on your life insurance policy. Would you abandon your home without selling it after years of making mortgage payments? Of course not. Likewise, no one should abandon a life insurance policy after years of making premium payments if they are able to realize its market value instead.
If you own a life insurance policy, you owe it to yourself and to your family to look into how much value you could get out of it before you just throw it away. Remember, a life insurance policy is just like your home and you can use it today as a financial option to help cover retirement expenses and the eventuality of senior living or long-term care.
 Olin Business School, Washington University in St. Louis and Wharton School, University of Pennsylvania. Daniel Gottlieb and Kent Smetters