We buy burial insurance for a sister to financially protect our loved ones when she dies. Getting final expense insurance is an affordable way to secure our family’s financial future.
You’ll also find that it’s affordable to buy burial insurance for your sister as long as you have insurable interest and consent. By taking a policy on her, you will ensure that you are protected when she passes away.
It’s now becoming common for siblings to take life insurance policies on each other because they don’t want to be burdened with the end-of-life expenses when their sister passes away. They realized that it’s much cheaper to invest in life insurance than be burdened with expensive funeral costs later.
Burial insurance for a sister or parents is done on a simplified basis. That means she will not have to take a medical exam but only answer some health questions to qualify.
In this article, we will explore the different requirements on how to get burial insurance on your sister and how to choose the best plan at the most affordable rate.
FOR EASIER NAVIGATION:
CAN YOU BUY BURIAL INSURANCE FOR SISTER?
Even if you have a blood relation, you still need to prove that you have an insurable interest on your sister. Having insurable interest means, that you will suffer financial loss if she dies. Example, her passing would leave you responsible for all the cost that comes with her death.
Aside from insurable interest, your sister must give her consent because she needs to sign the application.
REQUIREMENTS TO GET BURIAL INSURANCE FOR SISTER
1. SHOW INSURABLE INTEREST
You must show insurance interest on your sister before you can take life insurance on her. What is insurable interest? Insurable interest in your sister would be easier to prove because of your blood relation.
An insurable interest means that if your sister dies, it will cause a financial hardship on you.
Insurable interest means you have a financial stake on your sister that you’d like to insure which gives you the right to attempt to protect your financial losses.
Insurable interest is the reason why you can’t just purchase life insurance on just anybody because they have no significant effect on your finances. You need to prove that you will suffer a financial loss before you can have an insurable interest.
It is illegal for life insurance companies to sell insurance policies on people without insurable interest. It’s required by law to ensure that the death of the insured would not create financial gain on the policy owner.
Allowing people to own life insurance on strangers could lead to murder to get insurance payouts.
2. GET CONSENT
While buying burial insurance for your sister is possible and legal. However, there are some restrictions. You cannot buy a policy on your sister without her knowing about it.
After showing insurable interest, you need to get the consent of the proposed insured (your sister) by getting her signatures on important documents.
To get life insurance on your sister, she must be aware of, and she agrees with it. Unless she is disabled, she must sign the application and consent to release her medical records.
Even no medical exam policies like simplified issue and guaranteed acceptance policies require the signature of your sister.
Health Insurance Portability and Accountability Act (HIPAA) requires your sister’s personal consent to access her life insurance records.
The only exception to the HIPAA Law is if you have power of attorney on your sister. Some insurance companies will allow you to sign if you can submit proof of power of attorney.
Reasons why insurance companies need insurable interest and consent
Life insurance companies will not allow you to profit off from the death of your sister. Profiting from insurance payout is fraudulent and illegal.
If people could purchase life insurance on any relative or strangers they wanted to, and there would be murders to get insurance claims.
Insurable interest and consent are needed to prevent fraud and criminal activity.
- You must show insurable interest on your sister to take out burial insurance on her.
- Life insurance for burial should be available with your sister’s consent.
- Profiting from insurance payout is fraudulent and illegal and can land you in jail.
WHY YOU SHOULD BUY BURIAL INSURANCE FOR SISTER
There are various reasons why you should buy life insurance for sister:
- If you are financially dependent on your sister, you should get final expense insurance on her because her death could leave you with financial hardship.
- If you are in business with your sister, her death will cause you financial loss. This is an insurable interest; you could get burial insurance on her.
- When you have a legal document showing that your sister owes you a substantial amount of money, and an official loan was signed, you have an insurable interest to get repayment for the loan.
- You cosigned a loan such as a car or a college education with your sister, and then you can get burial insurance for her. Otherwise, you’d have to pay her remaining debt out of your pocket.
- If your sister has a disability due to an injury or illness and she is dependent on you, you would be responsible for paying for her final expenses. You can get burial insurance for sister.
- If your sister has filed for bankruptcy and left with no savings, if she is now financially dependent on you, you can take life insurance on her life.
- If your sister has a chronic or terminal illness and you are taking care of her, if she dies and you will be left to pay the funeral cost, take burial insurance on her.
- If your sister is handicapped and has mobility issues where she needs help with activities of daily living. You should take burial insurance for your sister.
- If your sister is uninsurable or unable to get insured for any reasons such as due to age, health, drug addiction, incarceration, driving record, or credit history, you can get burial insurance on her as well as long as she agrees to it.
BURIAL INSURANCE FOR SISTER
Types of burial insurance:
SIMPLIFIED ISSUE BURIAL INSURANCE
There are no physical or no medical exam required to qualify for a simplified issue burial insurance. Your sister will only have to answer some questions about her health.
Simplified Issue policies are easier and quicker to obtain because there’s no medical underwriting. This is the best life insurance without medical exam. The policy can be approved pretty quickly, usually within a few minutes to 1-2 weeks.
The most significant benefit of a simplified issue policy is that there’s a limited look-back period on health conditions. So let’s say your sister had ovarian cancer four years ago.
Most simplified issue life insurance will only look back two or three years on cancer treatment. If your sister has been in remission for more than two years, she can even get the lowest rates, where other fully underwritten policies will be skeptical about insuring cancer survivors.
Even with other medical conditions, getting a simplified issue policy on your sister can have her potentially covered from day one, there’s no waiting period. Insurance eligibility depends on your sister’s medical condition.
GUARANTEED ISSUE BURIAL INSURANCE
Guaranteed issue is a whole life insurance policy that never expires. Your sister can have a policy for life. GI policy does not require a medical exam or health questions to qualify. Acceptance is guaranteed regardless of her health condition.
If your sister has a chronic or terminal illness and doesn’t want to undergo any medical exam, this is the way to go. The application is easy and straight forward. She only needs to provide her personal information, beneficiary information, and payment information.
After signing her name on the phone or the computer, the policy will be approved for coverage in a matter of minutes to a couple of days.
A guaranteed issue policy is very easy to get, and it comes with a graded death benefit limitation.
This means it has a two-year waiting period, which means, if your sister died from natural causes during the waiting period, you would not receive a 100% death benefit. You will only get all the premiums you paid plus 7-10% interest.
Accidental death is fully covered even during the waiting period. After the two-year waiting period, your sister is fully covered, and you will receive the full death benefit if she dies for any reason.
HOW TO MAKE BUYING BURIAL INSURANCE EASIER
Let’s assume your sister consented with you purchasing burial insurance on her.
You can make buying burial insurance for your sister easy by doing these:
- Eliminate the need for a medical exam. Choose a plan where she doesn’t have to take physicals to qualify.
- Avoid long approval process for coverage, getting a no exam policy will expedite the approval process from several weeks to a few minutes.
- Complete the application process over the phone in just a few minutes.
HOW TO GET BURIAL INSURANCE FOR YOUR SISTER
The process of purchasing burial insurance on your sister is simple and straightforward:
- Make sure you have an insurable interest on your sister that you want to insure.
- Make sure your sister knows that you are getting burial insurance on her. Have the consent to review her medical history by asking her to sign the application.
- Determine the death benefit amount you want to apply for.
- Disclose any medical condition for your sister.
- Find a life insurance provider by completing the instant QUOTE form on this page (or call us directly).
- Let your sister fill out the application on her phone or computer.
- Your sister will be contacted by the life insurance company to verify her information.
- The underwriter at the life insurance company will review the application to assess the overall risk of your sister
- If the insurance application is approved, you will receive the policy in less than ten business days.
- Pay the monthly premium on whatever day you selected.
AVOID THE TAX TRAP
It’s crucial to set up your sister’s life insurance policy appropriately to avoid falling into a tax trap if your sister’s policy is not handled carefully. Life insurance payout is usually tax-free, but the policy owner can be taxed on the life insurance payout if the insured, owner, and beneficiary are three different people. This case is called the Goodman Triangle.
The Insured – The insured is the one covered by the life insurance policy, in this case, your sister, whose death will result in a death benefit payout.
The Policy Owner – The owner is usually the person paying for the policy. She holds the rights to the life insurance contract. She can make changes to the policy such as change the beneficiary, transfer ownership, add or delete riders, lower the death benefit, and request a rating change for the insured.
If you are the owner of your sister’s life insurance policy, you will have to give proof of insurable interest.
The Beneficiary – the beneficiary is the one designated to receive the life insurance benefit payout. Assign yourself as the beneficiary to avoid the tax trap.
The Goodman Triangle can happen this way:
You own a life insurance policy on your sister, and if you name your daughter as the beneficiary, in the eyes of the IRS, the payout is your gift to your daughter. And, it would be taxed accordingly. You would be taxed on the gift you give to your daughter.
Tips to avoid being taxed on the payout:
Be careful when setting up your sister’s policy to avoid the tax trap. You can avoid being taxed on the death benefit payout by avoiding the Goodman Triangle.
Make the two points of the triangle the same person. By assigning yourself as the policy owner and beneficiary, the Goodman Triangle does not exist.
INFORMATION WE NEED IF YOU WANT TO GET LIFE INSURANCE ON YOUR SISTER
Before you take life insurance on your sister, it’s essential for you to supply us all the necessary information about her. We need to understand her health condition to help us determine what type of plan she will qualify for.
It’s is important, to be honest when answering these questions:
- Who will be paying for the insurance coverage?
- How much insurance coverage are you interested in?
- Does your sister have any chronic or terminal illness?
- What chronic or terminal illness does she have?
- What medications is your sister taking?
- Does your sister been hospitalized within the last 24 months?
- Does your sister have any heart attacks, strokes, or cancer in the last two years?
- Does your sister have kidney failure requiring dialysis?
- Does your sister need help with activities of daily living such as eating, bathing, dressing, toileting, continence, and transferring?
Depending on your answer to these questions, we will be able to get a good idea about your sister’s health. We will analyze this information to determine what a burial insurance company will be the cheapest.
We will then provide you with an accurate quote.
HOW CAN FUNERAL FUNDS HELP ME?
Trying to find a policy for your sister needn’t be a frustrating process; working with an independent agency like Funeral Funds will make the process easier and quicker.
If your sister has a health history and need burial insurance, let us help you; we will work with you side by side to find a plan that fits your needs.
We will work with you every step of the way to find the plan that fits your financial requirements and budget. You don’t have to waste your precious time anymore searching for multiple insurance companies because we will do the dirty work for you.
We will shop your case to different insurance carriers and get you the best price.
We work with many A+ rated insurance carriers that specialized in covering high-risk clients like you. We will search all those companies to get the best rate. We will match you up with the best burial insurance company that gives the best rate.
We will assist you in securing the coverage you need at a rate you can afford. So, if you are looking for funeral insurance for sister, or sister burial insurance, or life insurance for sister. Fill out our quote form on this page or call us at 888) 862-9456 and we can give you an accurate life insurance quotes.