It’s no secret that Sears filed for bankruptcy in 2018. What may come as a surprise to some, however, is what happened to the life insurance policies of Sears retirees.
After the company went bankrupt, the life insurance policies of these retirees were canceled. This leaves many people wondering what they should do now that their life insurance policy is no longer valid.
In this blog post, we will explore what insurance options are open for Sears Retirees.
FOR EASIER NAVIGATION:
- What Happened To Sears Life Insurance?
- What Can Retirees Expect After The Bankruptcy?
- What Are The Options Given To Sears Retirees’ Life Insurance?
- What Can Sears Retirees Do?
- What Is Burial Life Insurance For Sears Retirees?
- Benefits of Burial Insurance
- Burial Insurance Options For Sears Retirees
- Requirements To Qualify For Burial Insurance For Retirees
- How Can Funeral Funds Help Me?
What Happened To Sears Life Insurance?
In the past, Sears used life insurance as a selling point to get people to work for them. Life insurance was always presented as a generous employee benefit for its workers.
Sears retirees were given insurance coverage worth $5,000 to $14,500, costing the company $1.3 in monthly premiums. Unfortunately, in 2018, Sears claimed it could no longer keep paying the insurance policies.
Sears Holdings, the parent company of Sears and Kmart, had notified their eligible retirees by mail that their life insurance policies with Securial Financial end as of March 15, 2019.
The notices were sent to retirees, mostly in their 80s, who had their life insurance coverage for a long time. The letters informed the retirees that they had already lost their coverage.
It’s estimated that 29,000 Sears retirees lost insurance coverage. Most retirees affected by the loss are in their 80s and 90s.
Many Sears retirees only had the life insurance coverage promised to them by the company. Their life insurance coverage was canceled when Sears stopped paying the annual premium.
After filing for bankruptcy in October 2018, Sears proposed a new compensation plan however, the new plan will reduce the amount the retirees would receive. Instead of getting the full amount of their policy, retirees will now receive between $115 and $135 from the company.
What Can Retirees Expect After The Bankruptcy?
In October 2019, Sears reached a $3 million settlement on the life insurance benefits of its retirees. This deal is still awaiting court approval.
If the court approves the deal, the settlement will create a fund to pay eligible retirees, possibly more money if there are additional claims.
This is a fraction of what the life insurance policies were worth, and it’s unclear how many retirees will receive any money from the settlement.
It’s important to note that the settlement only applies to life insurance policies that were in place before Sears filed for bankruptcy. Any policyholder terminated after the bankruptcy filing is not eligible for the settlement.
What Are The Options Given To Sears Retirees’ Life Insurance?
There is an option for the retiree-earned life insurance to be converted from all or part of the group life insurance policies to individual whole life policies. Securian may convert the coverage to any type of policy issued for conversion.
However, the individual policy will not include any supplemental benefits, including disability, accidental death, and dismemberment.
Even though there is a conversion right, the cost of converting is generally prohibitive for most retirees. Many retirees say they can’t afford the payments necessary to maintain their policy.
Most retirees between the ages of 80 and 90 cannot afford monthly payments. Their health has also declined, which makes it difficult to qualify for an individual policy.
The other option is to cancel the policy and receive a refund of any premiums paid. However, no death benefit will be paid if the retiree dies within one year of the policy being canceled.
The last option for Sears retirees is to do nothing and allow the policy to lapse. If retirees choose this option, they will not receive any death benefit.
What Can Sears Retirees Do?
There are a few things that you can do if you’re a Sears retiree who is now without life insurance.
First, you can purchase an individual life insurance policy from Funeral Funds of America. Buying a final expense life insurance is likely the best option because it’s designed to cover end-of-life costs, like funeral expenses.
Final expense life insurance or burial insurance policies are typically whole life insurance policies with face values ranging from $1,000 to $25,000. These policies don’t require a medical exam, so they’re available to people of all ages and health conditions.
Burial insurance is often much more affordable because of the small face value option. Sears retirees on a fixed income can find a policy that fits their budget and provides peace of mind knowing that their final expenses are taken care of.
What Is Burial Life Insurance For Sears Retirees?
Choosing burial life insurance that works with your retirement budget can be easy if you find the right company. Burial insurance for retirees is often a whole life insurance policy with very little underwriting. There are no medical exams, and retirees with health issues can still qualify.
Life insurance for Sears retirees works the same way as most other life insurance products. The death benefit is meant to pay for burial and other final expenses. The death benefits range between $1,000 and $25,000.
When you lose your employer-provided life insurance policy, you will want to purchase personal coverage. Having your burial insurance is a good idea if you need to take care of your final expenses after you pass away.
Benefits Of Burial Insurance
Ease of issue – The application process is straightforward. You will just need to answer a few health questions. Underwriting is lenient for high blood pressure, high cholesterol, diabetes, etc.
No medical exam – You can now apply for life insurance without undergoing extensive medical exams with urine and blood samples. With burial insurance, there are absolutely no medical exams.
Quick application process – Since there is no medical exam and underwriting, the application process is quick. You don’t have to wait weeks to months to get your policy. You can get life insurance coverage within a few minutes to a few days instead of several weeks.
Fixed premium – One of the great benefits of burial life insurance for a Sears retiree is that your monthly insurance premium is fixed. Your premium will never increase because you locked it at your current age, and it will remain the same for the rest of your life.
Not cancellable – Some people complain that their life insurance policy is canceled because of age or worsening health conditions (or owned by Sears and later canceled). With your own privately owned policy, you won’t have to worry about your life insurance being canceled because of your age or declining health condition (as long as you pay your premiums on time).
Your death benefit amount is fixed – Your coverage is guaranteed never to decrease, and your beneficiaries will receive 100% of the face amount of your benefit right away if you die from an accident.
Cash value accumulation – Burial insurance uses a whole life insurance policy with a savings element that accumulates cash value. The collected cash value can be used to pay your premiums, or you borrow this cash value out as a policy loan if you have small emergencies. The cash value accumulation typically happens after three to five years.
Your policy will never expire after 80 years old – A burial insurance policy is whole life insurance that will last your lifetime. The policy will not terminate if you keep paying your monthly premiums on time.
Burial Insurance Options For Sears Retirees
LEVEL DEATH BENEFIT
Simplified issue burial life insurance Sears retirees is a real burial insurance policy you can purchase from 50 to 85 years old. It has a level death benefit with immediate coverage starting on day one. You can skip the medical exam and only need to answer a few health questions.
Since there’s no medical exam, the application process is quicker. You can get approval after several minutes, and you don’t have to wait 3-8 weeks to approve your application.
The underwriting process is simplified compared with traditional term life insurance (which we never recommend for burial insurance needs). You only have to answer a few health questions to get an overview of your health condition. This is done to weed out potentially high-risk life insurance applicants, such as those with terminal illnesses like cancer.
Generally, health issues such as high blood pressure, high cholesterol, diabetes, and other minor health issues are health issues the insurance companies don’t even care about for getting you a policy approval.
GUARANTEED ISSUE LIFE INSURANCE
Guaranteed acceptance whole life insurance requires no medical exam and health questions on the application. Burial life insurance Sears retirees with health issues will qualify for this policy. You will be approved for coverage regardless of your health.
If you deal with any of the following health issues, you will only be eligible for guaranteed issue burial insurance with no health questions:
- Terminal illness (your life expectancy is 24 months or less)
- You have had cancer within the last 24 months
- Diagnosed with AIDS or HIV
- Alzheimer’s or dementia
- End-stage kidney disease requiring dialysis
- Heart attack within the previous 12 months
- Oxygen use (only okay for sleep apnea)
- Congestive heart failure (CHF)
- Full-blown stroke (TIA mini-strokes do not count) within the last 12 months)
- Amputation due to diabetes
- Diabetic coma or insulin shock or within the previous 24 months
- Angina (chest pain) within the previous 12 months
- Had heart surgery within the last 12 months
- A circulatory surgery within the last 12 months
- Been recommended to have or had an organ transplant
- Confined to a wheelchair or bed because of chronic illness
- Currently, in the hospital, nursing home, skilled nursing facility, or hospice care
- Needing help with activities of daily living such as eating, toileting, bathing, dressing, transferring, and continence
Guaranteed acceptance policies have no medical questions, so that Sears retirees will get approval on their insurance applications even with these high-risk conditions.
Requirements To Qualify For Burial Insurance For Retirees
- Age Requirement – Every burial insurance company has an age requirement, but most burial insurance providers accept applicants who are 50-85 years old (some companies offer age 18-85 coverage).
- State Availability – Not every insurance provider has their insurance products licensed in every state. Make sure the company you are applying for has a life insurance policy available in your state.
- Ability to Enter into a Legal Contract –You must possess the mental capacity to enter into a legal contract. For example, suppose you have a severe cognitive impairment like dementia or Alzheimer’s disease and may not be able to consent to an agreement legally. In that case, the company may reject your insurance application.
How Can Funeral Funds Help Me?
Finding a policy if you’re a Sears retiree needn’t be frustrating; working with an independent agency like Funeral Funds will make the process easier and quicker.
If you need burial insurance for Sears retirees, 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 to find the plan that fits your financial requirements and budget. You don’t have to waste your precious time searching for multiple insurance companies because we will do the work for you.
We will assist you in securing the coverage you need at a rate you can afford. So, if you are looking for Sears retirees’ funeral insurance, Burial life insurance, Sears retirees, or Sears retirees’ life insurance, we can help. Fill out our quote form on this page or call us at (888) 862-9456, and we can give you an accurate quote.