Burial Insurance For The Terminally Ill

Written by Jeff Root

Coping with a terminal illness is devastating for both the person who is ill and the family members he or she will be leaving behind. Worrying about funeral expenses and the cost of final bills can make an already difficult time even worse, particularly if the person who is sick doesn’t already have life insurance or burial insurance in place.

Fortunately, in recent years some insurance companies have stepped up and begun offering burial insurance policies to individuals who have terminal illnesses.

Before we explore the best burial insurance companies and rates for the terminally ill, what they can expect for coverage, and what types of policies are available to them, let’s take a look at a few of the myths surrounding burial insurance for the terminally ill first:

2 Common Myths About Insurance for the Terminally Ill

Myth #1: Terminally Ill Patients Can’t Get Burial Insurance

A decade ago, it was nearly impossible to get burial insurance for anyone who had a life-threatening illness. In recent years, however, some insurers have designed policies that address the needs of individuals who have pre-existing, fatal illnesses.

There are stricter guidelines on these policies and they are more expensive than a standard life or burial insurance policy, but they are within reach for most people.

Shopping around for the best price and coverage can take some time, so if you’re terminally ill, consider recruiting a family member or trusted friend to help you evaluate various companies and policies.

 

Myth #2: Burial Insurance for the Terminally Ill Is Too Expensive for Most Families

This is another myth that needs to be forgotten. A generation ago, this may have been true. Nearly all life insurance policies exclude coverage for anyone with a terminal illness, chronic illness or pre-existing condition. This is no longer true. There are several insurance providers who offer affordable options for burial insurance.

These are often called guaranteed issue insurance policies. They have different requirements and pricing, but because they are offered to a pool of individuals with similar concerns, the price has dropped to more reasonable levels.

You can also tailor how much burial insurance you get to your budget, purchasing what you can afford in order to give your family some peace of mind regarding your eventual funeral and burial expenses.

Understanding Guaranteed Issue Life Insurance

Life or burial insurance policies labeled “Guaranteed Issue” are policies that guarantee acceptance no matter what; in other words, even if you are terminally ill or in poor health, you are guaranteed life insurance coverage.

What are the advantages of guaranteed issue life insurance?

The advantage of a guaranteed policy is that there are no medical questions and no exams needed. In most cases, you can get a quote and have the policy issued almost immediately.

If you apply online, you may be able to get coverage in a matter of minutes. The disadvantage is that that a guaranteed issue policy is more expensive than other policies and will usually have a much smaller face value than policies that don’t guarantee acceptance.

What should I watch out for in a guaranteed life insurance policy?

You have to be careful when comparing guaranteed life insurance policies because each one is structured differently.

A level policy will pay the full face value of the policy regardless of when an individual passes away, even if it is a few days after the policy is approved.

For this reason, you’ll find it difficult to find an affordable, level payout burial policy if the insured is terminally ill.

For patients who are terminal or who have a life-threatening, pre-existing condition, a graded policy is more common. With these policies, the benefits are paid in full only if the person passes away two or more years after the policy was issued.

How Does Burial Insurance Payout?

For graded policies, the payout at the one year and two-year marks are usually a percentage of the face value. For instance, if a terminally ill insured dies within a year of getting the policy, the beneficiary may get 25% of the face value. Up to the two-year point, the policy may pay out 60% of the full value.

Other policies may not pay at all if the individual dies before the two-year benchmark. Still, others pay based on how much has been paid in premiums up until the insured passed away.

For instance, if the insured dies 18 months after purchasing a graded policy, the beneficiary will receive a refund of all the premiums paid up to that point plus interest on that amount (usually about 10%). For this reason, it’s critical to shop around for the best possible policy for the insured’s circumstances.

How Much Does Burial Insurance Cover?

Most guaranteed life insurance policies have benefits of no more than $25,000, with a few insurers offering policies with coverage up to $50,000 that are graded and have higher premiums.

A burial insurance policy can be purchased for up to $50,000 by most people, even if it isn’t a guaranteed acceptance policy because it is for a smaller payout compared to most life insurance policies. There are policies that goe higher, even up to $500,000, but $50,000 is the normal maximum for most burial insurance policies.

Burial insurance policies may have a few medical or health questions which are used to determine whether you qualify for a level or graded policy.

How Much Does Burial Insurance for the Terminally Ill Cost?

Due to the high risk of anyone who is terminally ill, and the guaranteed payout of a burial insurance policy, it can be very hard to estimate the cost of burial insurance for someone who is terminally ill.

Because each terminal illness comes with its own life expectancies, it is even harder to give estimates that reflect rates you can expect to pay.

The best thing to do in order to find the best burial insurance rates for the terminally ill is to contact an independent life insurance agent who can help find the best coverage for your specific situation.

What to Look for in Burial Insurance for the Terminally Ill

There are a few important features you need to look at when shopping for burial insurance for the terminally ill. These include:

  • Guaranteed acceptance
  • Low premium rate
  • Level pay-out if the insured is likely to pass away in less than two years
  • Graded pay-out if the insured will likely survive for more than two years from the date of the policy
  • Any restrictions due to the kind of illness or when the policy will take effect

Shopping for burial insurance for the terminally ill is time-consuming. There are several different features you have to compare as well as the circumstances of the insured. You will also have to determine how much burial insurance you’ll need versus how much you can afford.

We’ve put together a list of the best burial insurance policies available for the terminally ill so that you can purchase the right policy and get it into place as soon as possible, allowing you to get back to caring for yourself or your loved one.

Top Six Burial Insurance Providers for the Terminally Ill

Company A.M. Best Rating Customer Reviews
AIG $10,000 $25/mo.
Americo $10,000 $41/mo.
Assurity $10,000 $100/mo.
Foresters Financial $10,000 $30/mo.
Gerber $10,000 $55/mo.
Sagicor $10,000 $130/mo.

1. AIG

AIG’s Guaranteed Issue Whole Life policy is one of the best options for anyone with a terminal illness. It doesn’t require a physical exam and doesn’t have any health questions to answer. You can purchase coverage for up to $25,000 and the payor doesn’t have to be the insured.

This is an ideal way for adults to get coverage for a parent who is terminally ill, although the insured still has to sign off on the plan. It’s a graded policy that pays 110% of premiums paid if the insured passes away less than two years after the policy is put in place. After that, the policy will pay the full face value.

2. Americo

Americo offers more than one option for terminally ill patients aged 50-80 years looking for burial insurance. Their Ultra Protector Series features whole life insurance with guaranteed acceptance and level premiums. The face values range from a few thousand dollars to $30,000, making it one of the highest payouts for a burial policy for someone who is terminally ill.

Their accelerated benefit rider allows the insured to receive up to 50% of the policy’s value before death if they are terminal. This gives them needed funds but still leaves a partial death benefit in place for funeral costs after their death.

3. Assurity

As a leader in the insurance market for life insurance and burial insurance policies without any medical exams, Assurity has developed several attractive options for terminally ill individuals.

They feature a level benefit plan with a value of up to $25,000 with no health questions that are affordable for most families as well as a whole life policy with up to $50,000 in coverage depending on the insured’s age and answers to a few health questions. If you have some minor health problems but aren’t suffering from cancer or heart disease, Assurity may have the right coverage for you.

4. Foresters Financial

Foresters consistently offers some of the most affordable burial insurance plans in the industry while keeping the questions to a minimum and the acceptance guidelines broad.

With their PlanRight Whole Life policy, you can get up to $35,000 in coverage if you’re between the ages of 50 and 80 or $15,000 if you’re between 81 and 85

5. Gerber

Gerber’s guaranteed issue whole life policy is available for anyone aged 50 to 80 regardless of their health status. There aren’t any exams or health questions, so everyone qualifies for coverage. You can choose any amount of coverage from $5,000 to $25,000 for burial and final expenses.

Keep in mind, however, that this is a graded policy, so full coverage won’t kick in until the insured has lived for at least two years after the policy is put into effect. You won’t lose any money, though, because, for deaths occurring before the two-year mark, the beneficiary receives 110% of the premiums paid to that point.

6. Sagicor

Sagicor offers an impressive amount of burial insurance coverage by breaking down the premiums into various categories, reducing the cost for many people who fall into lower risk categories. The company has been rated as A+ by both AM Best and the Better Business Bureau, so you can buy confidently.

Be sure to talk to a Sagicor representative to get the best policy possible for someone with a terminal illness. They are willing to work with their clients to give the best possible coverage at a reasonable price.

Finding the Best Burial Insurance Rates for the Terminally Ill

We always recommend seeking professional assistance from an independent life insurance agent before considering the best burial insurance policy for you.

This is especially true the more complex and immediate the need for coverage becomes. In the case of someone who is terminally ill, it is absolutely necessary to speak with a life insurance agent in order to find the best burial insurance rates.

Our independent life insurance agents understand the painful process you and your loved ones are going through, and are here to help you understand the full breadth of options available to you in order to provide for your family in the event of your death.

Speak to one of our independent agents to compare the best burial insurance rates from dozens of the top providers, free!

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About Burial Insurance Coverage
About Burial Insurance Coverage

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