Lending Company Helps Terminally Ill Enjoy Remaining Time

Robert Urich realizes not everyone can afford the million dollars he spent on his cancer treatment.

That’s one of the reasons the former star of the television shows “Vegas” and “Spenser: For Hire” has teamed with a company that lends the terminally ill money against the value of their life insurance policies.

“Lord knows what would have happened to me if I did not have the kind of resources that I have,” Urich said. “There are people who just don’t have the funds to survive.”

The company, LifeWise, picks up the tab for Urich’s speaking engagements across the country in which he shares his story of surviving cancer.

However morbid it may sound, LifeWise only loans money to people whose life expectancy is less than five years. Clients can borrow up to 85% of their insurance policy’s face value. The loan and interest are repaid with proceeds from the policy once the customer dies.

Whatever is left after the loan is repaid goes to beneficiaries.

“We know that the vast majority of our borrowers are going to die on our schedule,” LifeWise President Mark Livingston said. “Our only consolation comes in knowing that whatever their time left is, having the money that we provide gives them the opportunity as a family to really make the most of it.”

John Templeton Sr. of Irvine, Calif., said his LifeWise loan enabled him to vastly improve the last year of his 17-year-old son’s life. Templeton purchased a $100,000 life insurance policy for “JP” when he was an insurance agent.

Last year, through the Make-a-Wish Foundation, JP got to see his favorite band, Aerosmith, in New York and meet band members. The loan helped pay for expenses in New York and much more.

“It enhanced the quality of JP’s life,” Templeton said. “We were able to take him everywhere, we were able to buy him everything he wanted just to keep his mind busy and so he could have the best.”

JP died Aug. 12 after a 19-month battle with cancer.

What makes LifeWise’s service unique is its structure as a loan rather than as a “viatical settlement,” in which seriously ill people sell their life insurance policies to a third party for cash while they are still alive. The term derives from a Latin word that means money or supplies provided to someone embarking on a dangerous journey.

While the pros and cons of both types of services can be debated, Livingston promotes his Salt Lake City-based business as more flexible.

For example, he said, individuals who sell their policies and receive a lump sum could become ineligible for Medicaid or Social Security. Loan proceeds, on the other hand, can be structured so they don’t affect such benefits, he said.

Livingston also bills LifeWise’s option of providing a running credit line as better for people unused to managing large sums of money.

But borrowing against your life insurance policy isn’t cheap. Life-Wise’s annual interest rate runs from 14% to 17%.

And experts warn against rushing into any decision relating to death benefits.

“What we tell people to do is to seek financial advice,” said William E. Kelley, executive director of the Washington-based Viatical Assn. of America. “We have never purported that viatical settlements [or loans] are for everyone.

“It’s a major transaction, just like buying a house and even more so than buying a car,” he said.

Kelley said LifeWise was the first in the country to offer a loan program, but other companies are looking at it.

LifeWise takes pains to screen its loan applicants, not for financial stability but to determine if their life expectancy exceeds five years. If so, the applicant is denied, Livingston said. The screening is performed by doctors at Louisiana State University.

What happens if a person given a loan unexpectedly recovers? Interest would keep accruing on the loan until it is repaid, either before or after the customer eventually dies.

“There’s nothing wrong with what they’re doing,” said Garry Cox, supervisor of industrial loan corporations with the Utah Department of Financial Institutions. “It maybe sounds a little morbid.

“But if I knew I was terminally ill with AIDS or cancer, and I knew I had at most two years to live, and I had a huge life insurance policy, I’d spend it. Why not enjoy it? Go on a trip. Use the money before you die.”

Peter Williams of Pinehurst, N.C., did just that. The 63-year-old cancer patient used his loan for a trip to Hawaii and to pay off debts.

“They [LifeWise] were responsive, understanding and compassionate,” he said. “They did loan us money and they took their percentage, but I don’t even think about that.”

Livingston, whose background is in consumer finance, credits the idea for the 2-year-old company in part to his mother, who suffers from congenital heart failure and emphysema.

“Anybody that’s worked in a clinical setting with cancer patients knows that stress is an accelerant. Financial stress is not at all what you need when you have cancer,” he said.

The bulk of LifeWise’s 600 clients have been from California, Florida, Massachusetts, New York and Texas, suffering from cancer, heart disease or AIDS.

LifeWise advertises in publications aimed at cancer patients and has a brochure featuring a smiling Urich on the cover, his hair grown back from the chemotherapy and radiation treatments he received in battling synovial sarcoma. The rare form of cancer attacks the joints and can spread to the lungs.

Urich, 50, said his speaking engagements are a chance to keep a pledge he made with God to spread a “message of hope” if he survived. He said he rarely mentions Life-Wise to his audiences, but the brochure contains a “personal message” from the actor touting the company as “professional and compassionate.”

Urich says delivering his message is “as much a part of my healing process as going to the hospital to have doctors take care of me.”