Burial Insurance for Terminally Ill Patients

Burial Insurance for Terminally Ill Patients

Buying burial insurance for terminally ill patients is too late. The best time to buy burial insurance is before being diagnosed with a terminal illness, or before you are confined in a nursing facility or hospice.

IMPORTANT: No insurance company will approve you for first-day coverage if you have a terminal illness and have less than 24 months to live. This protects the insurance companies from paying a lot of money to people who are literally on their deathbed and trying to buy life insurance.

In this article, we will explain who should buy burial insurance, and the options you have if you are a terminally ill patient.

FOR EASIER NAVIGATION:


WHAT IS MY BEST INSURANCE OPTION IF I’M A TERMINALLY ILL PATIENT?

A terminal illness is a progressive disease that expects to end a person’s life within 12-24 months because the disease has no known cure or has progressed to the point where it can’t be cured.

If you’re a terminally ill patient, your only option for insurance coverage is a guaranteed issue burial insurance with a two-year waiting period.

Guaranteed acceptance life insurance policies require no medical exams or healthy questions, so people with poor health are approved for coverage. However, this plan is expensive and you need to live for the next two years before you get full coverage.

Best Option: Guaranteed issue burial insurance


Here are the most common types of terminal illness the insurance companies care about:

There are other terminal illnesses, but these are considered the most common in the U.S.


IS CANCER CONSIDERED A TERMINAL ILLNESS?

Cancer in itself is not considered a terminal illness. Cancer can be treated in many cases but can also be terminal in others. Cancer as a terminal illness depends on the type of cancer and its stage when first diagnosed.

For example, melanoma or skin cancer has a high mortality rate after being diagnosed. However, as long as cancer remains on top of the skin, it is highly curable and not considered terminal. Moreover, cancer in its early stage is also considered highly curable when treated.

Many forms of cancers are highly treatable, and patients can experience complete remission. But, late-stage cancer is a terminal condition that may progress quickly, and the period of time between diagnosis and death may be from a few weeks to a few months.


WHY WE DON’T RECOMMEND GUARANTEED ISSUE BURIAL INSURANCE FOR TERMINALLY ILL PATIENTS?

1. 2-Year Waiting Period

The #1 reason why I don’t recommend guaranteed issue life insurance for a terminal illness is the waiting period. This plan does not offer immediate coverage other than for accidental death during the first two years.

When you take out this plan, you will automatically be approved for coverage with no questions asked. Your plan will also have a mandatory two-year waiting period for any health or medical-related cause of death.

The two-year waiting period acts as a financial safety net for the insurance company. It is their way of protecting themselves from paying a lot of money to people who are literally on their deathbed and trying to buy life insurance.

This policy will require you to live for the first two years before your policy pays for any health or medical-related cause of death. If you pass away during the waiting period, your beneficiary will not get your full death benefit. Instead, they will get a Return Of Premium (ROP) plus interest (usually 7-10%)

If death occurs for natural causes within the first two policy years, your beneficiary will only receive all premiums plus 7% – 10% interest. If death is due to accidental reasons within the first two policy years, the full death benefit shall be paid to your beneficiary.


2. More Expensive

Dollar for dollar, a guaranteed issue life insurance is up to two to three times more expensive than life insurance with medical underwriting. You will pay more on your policy because of the additional risk the life insurance company takes for approving your policy without asking any medical questions.


3. Limited Death Benefit Option

Guaranteed issue life insurance coverage maxes out at $25,000. That’s the highest coverage you can buy. If you’re planning to buy a life insurance policy to pay off your mortgage or pay your children’s college education, this plan will not work for you.


WHAT TYPES OF BURIAL INSURANCE SHOULD I AVOID?

PLANS TO AVOIDWHY?
Term lifePremiums increase after 5 years. Coverage ends after 80.
Pre-paid funeral plansExpensive
Universal lifeTied with stocks
No health questions policiesWith 2-year waiting period
Plans offering "teaser rates"$9.95 per unit plans or $1 buys $30,000 coverage
Over priced plansInsurance from TV and junk mail
Plans that accept mail-in paymentsRisky
Plans that accept Direct ExpressHigh lapse rate
Plans that accept Credit CardsHigh lapse rate


WHAT TYPE OF BURIAL INSURANCE IS BEST?

FUNERAL FUNDS PLAN BENEFITSINCLUDED
1st Day CoverageYES
Rates NEVER IncreaseYES
Coverage NEVER DecreasesYES
Easy to get approvedYES
No Medical ExamYES
Same Day ApprovalYES
Death Claims Pay FastYES
Builds cash valueYES
Coverage Up To Age 121 YES


IF I HAVE TERMINAL ILLNESS, DO I NEED A MEDICAL EXAM TO QUALIFY FOR BURIAL INSURANCE?

You are NOT required to take a medical exam to qualify for burial insurance for terminally ill patients.

When you apply for burial insurance, you only have to answer some basic questions about your health. The application process is simple, and you don’t need to provide medical records or blood and urine samples.

You’ll get the official approval from the insurance company often within minutes!


BURIAL INSURANCE UNDERWRITING IF YOU’RE A TERMINALLY ILL PATIENT

Burial insurance companies have two ways of underwriting:

FIRST – They may ask you a series of health questions. Your answers to their questions will determine your eligibility.

SECOND – They will electronically review your prescription history to verify your health.


HEALTH QUESTIONS:

  • During the past 18 months have you been diagnosed or treated as having condition expected to result in death within 12 months?
  • Have you been diagnosed with, received or been advised to receive treatment or medication or any terminal illness or end-stage disease?
  • Have you had, or been advised, or have you been diagnosed as having a terminal illness or an illness that would reasonably be expected to cause death within 12 months?

Every life insurance company asks about terminal illness on the health questionnaire. If you answer “yes” to the terminal illness question, your application for a first-day coverage plan will be declined.

If you have a terminal illness, you will only qualify for a no health questions guaranteed issue burial insurance.


HOW MUCH INSURANCE DO I NEED IF I’M A TERMINALLY ILL PATIENT?

The amount of burial insurance you should buy varies depending on your personal and financial circumstances. However, burial insurance should cover the cost of your funeral, burial, and final expenses.

The first step to figuring out how much burial insurance you need is to know your end-of-life expenses. Your funeral cost is often the biggest single expense you need to pay. Other end-of-life expenses to consider are your outstanding medical bills, living expenses, credit card bills, and other debts.

Here’s an example of a funeral cost breakdown from the National Funeral Directors Association.

AVERAGE FUNERAL COST WITH VIEWING AND BURIAL 
Non-declinable basic$2,195
Removal/ transfer of remains to funeral home$350
Embalming & preparation of the body$1,005
Use of facilities for viewing & funeral ceremony$925
Hearse$340
Service car/van$150
Basic memorial printed package$175
Metal casket$2,500
Vault$1,495
Median Cost of a Funeral With Viewing and Burial$9,135
AVERAGE FUNERAL COST WITH VIEWING AND CREMATION 
Non-declinable basic services fee$2,195
Removal/ transfer of remains to funeral home$350
Embalming & preparation of the body$1,005
Use of facilities for viewing & funeral ceremony$925
Service car/van$150
Basic memorial printed package$175
Cremation fee (if firm uses a third-party crematory)$350
Median Cost of a Funeral with Viewing and Cremation$5,150
Cremation Casket$1,200
Rental Casket$995
Alternate Cremation Container$150
Urn$295


HOW SHOULD I PAY MY PREMIUMS?

The best way to pay your premium is through a savings or checking account. We recommend you set a bank draft from your savings or checking account. That way, the bank will automatically pay your premium each month, and you don’t need to worry about your policy lapsing due to non-payment.

PAYMENT METHODRECOMMENDED?
Savings AccountBest way to pay
Checking AccountBest way to pay
CashNot recommended
Money OrderNot recommended
Cashier's CheckNot recommended
Debit CardNot recommended
Credit CardNot recommended
Direct ExpressNot recommended
PAYMENT FREQUENCYRECOMMENDEDACCEPTED BY
MonthlyRecommendedAll Companies
QuarterlyNot RecommendedSome Companies
Semi-annuallyNot RecommendedSome Companies
AnnuallyNot RecommendedSome Companies


TERMINALLY ILL PATIENTS AND BURIAL INSURANCE RIDERS

Insurance policy riders add benefits to your policy. Adding insurance riders will enhance your policy to fit your needs. Some riders are built into your policy, while other riders can be added at an additional cost. Most riders are affordable, and it involves little to no underwriting.

Here’s a list of common burial insurance riders:

FUNERAL FUNDS ADD-ONSAVAILABILITY
Terminal Illness Add-On BenefitIncluded with most plans
Nursing Home Care Add-On BenefitIncluded with most plans


NON-BURIAL INSURANCE OPTIONS FOR TERMINALLY ILL PATIENTS

Insurance is about risk management; that’s why insurance companies see terminal illness life insurance as a poor business decision.

If you have a terminal illness that prevents you from qualifying for insurance, you have three other options.

1. Prepaid Funeral Plan

You can pay for your funeral and burial in advance. You have the option to buy a prepaid funeral plan and make arrangements before your death.

When you sign up for a prepaid funeral plan, you don’t need a burial insurance policy to cover your final expenses.

Be warned! Funeral and final expenses are not cheap. If you choose this option, be prepared to pay between $8,000 and $15,000.

Prepaid plans are not great options for people with terminal illnesses because they have to be paid off for your funeral to occur.


2. Savings Accounts

Instead of buying burial insurance, you can open a savings account or joint savings account where you can deposit money to take care of your final expenses.

When you die, your family can immediately access the funds from this account to pay for your funeral, burial, and other costs associated with your death.

Savings accounts are not a great option for people with terminal illnesses, since most people we help are on fixed or limited incomes and don’t have $8,000 to $15,000 in their savings account.


3. Payable on Death Account (Totten Trust)

Opening a Payable On Death (POD) account is your other option if you can’t get life insurance. POD allows you to name a beneficiary on your bank account.

The funds on your account can be used for your funeral. Your beneficiary can immediately access the funds upon your death to pay for your funeral expenses.

Since most people ages 50-85 are on fixed or limited incomes, starting a POD account is difficult, if not impossible, for the people I help every day.


BENEFITS OF BURIAL & FUNERAL INSURANCE

Here are some of the benefits of purchasing a burial or funeral policy:

  • No medical exam or doctor’s visit required – easy to get approved.
  • Ease of issue – easy to qualify and get insurance coverage.
  • No Money Down to get approved – have your policy start whenever you want.
  • Level premium – your premium will never increase.
  • Fixed death benefit – your death benefit will never decrease for any reason.
  • Permanent protection – your policy can not be canceled by the life insurance company as long as you continue to pay your premiums.
  • Tax-free – the death benefit is directly paid to your beneficiary tax-free upon your death
  • Cash value builds up – burial insurance is a whole life policy that builds cash value over time.


OTHER COMMON USES FOR FINAL EXPENSE LIFE INSURANCE FOR TERMINALLY ILL PATIENTS

All of these examples are appropriate uses for Final Expense Life Insurance:

  • Burial insurance plan for terminally ill patients
  • Cremation insurance plan for terminally ill patients Funeral home insurance plan for terminally ill patients
  • Final Expense insurance plan for terminally ill patients
  • Prepaid funeral plan insurance for terminally ill patients
  • Mortgage payment protection plan for terminally ill patients
  • Mortgage payoff life insurance plan for terminally ill patients
  • Deceased spouse’s income replacement plan for terminally ill patients
  • Legacy insurance gift plan to family or loved ones for terminally ill patients
  • Medical or doctor bill life insurance plan for terminally ill patients

We can help you with any of the plans above. Your pricing will depend on your age, health, and coverage amount for each program option.


WHEN IS THE BEST TIME TO BUY BURIAL INSURANCE?

The best time to get life insurance is before you are sick or ill as your health is a determining factor for insurability from first-day coverage companies.

If you’re thinking of getting burial insurance, do it NOW before it’s too late! Do it now while you can still lock in the lowest pricing!

To get the lowest price on life insurance, buy it when you are younger rather than when older. The older you are, the more expensive your premium will be.

Buy it when you are healthier rather than when you have significant health problems. The healthier you are, the lower your premiums will be.


HOW CAN FUNERAL FUNDS HELP ME?

Trying to find life insurance when you or a loved one has a terminal illness is a losing proposition. Chances are you just waited too long to take care of something you knew would happen someday. 

Suppose you are a family member shopping for insurance for a terminally ill patient. In that case, we highly recommend you get burial insurance for yourself before it’s too late, and we would love for Funeral Funds to be the one who helps you.

If you’re 50-85 years old looking to buy burial insurance, working with an independent agency like Funeral Funds will make the application and approval process easy and affordable.

You don’t have to waste your precious time searching for multiple insurance companies because my agents or we will do the work for you.

We will shop 20-30 different insurance carriers to get you the best price. We will search for those companies and match you with the best burial insurance company that gives the best rate.

Fill out our quote form on this page, or call us at (888) 862-9456 to get an accurate quote.

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