Are you interested in getting burial insurance, but told there would be a waiting period? Every insurance company out there has different criteria for waiting periods, but MOST people DON'T need one.
In this article, we’ll discuss what why some insurance companies want a waiting period and how it’s not the same for every company.
What is Final Expense Life Insurance Exactly?
Final Expense insurance aka burial or funeral insurance is a whole life insurance policy with a smaller death benefit, and is easier for you to get approved for, than traditional whole life insurance.
The policies pay out the benefit money to your beneficiary typically within 48 hours which makes them ideal for funeral, burial, cremation, and end of life expenses.
The price of the policies are locked-in for life and will never increase, the benefit money will always be there as long as the premiums are paid, and you can never be dropped due to health conditions.
They're also called 'Simplified Issue' meaning you don't have to undergo a medical or physical exam to be approved for the policy.
WHAT YOU NEED TO KNOW
All insurance companies out there will charge you differently for different health conditions. While one company may charge you extra for having a specific health condition, another company may not.
Here's an example – a person with COPD could be denied coverage, be given a 2-year waiting period, or could be given immediate coverage. It all depends on the insurance company you're getting a quote from.
That's why it's beneficial to speak with an insurance brokerage, like AffinityQuotes, to make sure you have lots of insurance carrier options.
Why Do Companies Have A Waiting Period?
Insurance companies will sometimes require a waiting period when they evaluate you to be high risk. This means they've assessed you to have a health condition that generally has a higher mortality rate.
The insurance carrier will agree to give you the policy, but only under the condition there's a delayed time period before the company will be obligated to pay out the benefit.
This means you must stay alive during the first 1-2 years, depending on the insurance company and policy type, before your beneficiary is eligible to receive the death benefit money.
If you need a waiting period, or not, varies from company to company, but it depends on your health condition and the medications you take.
(1) No waiting period – This option gives you immediate insurance coverage with 100% payout of the death benefit payable to the beneficiary as soon as the policy is issued.
(2) Delayed waiting period – This option give you immediate partial coverage. Typically, if death occurs during the first twelve months, the payout will be 30% - 40% of the benefit amount. During the next 13 to 24 months, the face amount will be 60% - 70% of the face amount, and after 24 months, the payout will be 100%.
(3) 2-year waiting period – This option gives a 2-year waiting period before the death benefit will be paid out. See below for the health conditions that automatically require a 2-year waiting period.
(4) 1-year waiting period – This option give a 1-year waiting before 50% of the benefit is paid out. After 24 months 100% of the benefit is available to be paid out to your beneficiary. See below for the only health conditions a person CANNOT have in order to qualify for a one year wait before 50% of the benefit is paid out.
The Four Main Waiting Period Options:
Health Conditions That Require 2-Year Waiting Period
Unfortunately, these conditions will result in an automatic 2-year wait as these are considered high risk with all insurance carriers.
AIDS or HIV
24-Hour Oxygen Use
Organ Transplant (or awaiting organ transplant)
Wheelchair confinement or bedridden
Current hospital, nursing home, mental care or long term care
Other major health conditions such as recent heart attack, stroke, liver or kidney disease may have an opportunity to get a policy with under a 2-year wait, depending on the severity of the condition and the medications you've been prescribed.
Can You Get Life Insurance If Diagnosed With A Terminal Illness?
Living with a terminal illness diagnosis can have an overwhelming impact on you as well as your family. Fortunately, a terminal diagnosis doesn't mean you can't get a life insurance plan. In fact, planning ahead and having a management strategy can help lessen the pressure on family members when you're no longer around.
The only option available for someone with a terminal illness diagnosis is a Guaranteed Issue policy. These policies do come with a 2-year waiting period, so it may feel an insurance policy may be not useful. However, if death occurs during the first 24 months, all money paid into the policy is returned to the beneficiary plus 10% interest.
This is interest on money that potentially may not be gaining interest otherwise, so it's not money being wasted. If the insured makes it one day past the 24 months then 100% of the benefit is paid out, and this could be significant if the diagnosis isn't entirely accurate.
And, remember, even with modern technology, doctors cannot accurately diagnose terminal illness or estimate the time to death precisely in every case. Countless people are given only a short time to live and have recovered and survived long-term.
Answer "No" To The Following Questions And You're Eligible For Coverage With A 1-Year Wait of 50% Benefit, With 100% Coverage Available After 24 Months
Working with an insurance broker, like AffinityQuotes, can mean you have access to companies that will approve policies that are not so commonly known. For example, AQ can write a policy for people with severe medical conditions with 50% coverage after one (1) year, and 100% coverage after 24 months. If you can answer "No" to the following questions, you will be accepted for this exclusive policy.
1. Within the last twenty-four (24) months, have you been receiving kidney dialysis, require 24 hour continuous oxygen use (excluding CPAP), have an implanted defibrillator or received or been advised by a member of the medical profession to get an organ transplant?
2. Within the last twenty-four (24) months have you been diagnosed with or treated by a member of the medical profession for Alzheimer’s, dementia or memory loss?
3. Currently diagnosed as having, or receiving treatment by a member of the medical profession for invasive cancer (excluding Stage A Prostate Cancer, Carcinoma in Situ, and Squamous Cell/Basal Cell Carcinoma)?
4. Are you currently bedridden, confined to a hospital, nursing home, mental care facility, long term care facility, hospice or been diagnosed with a terminal illness?
5. Have you been diagnosed by a member of the medical profession as having the Human Immunodeficiency Virus (HIV), ARC or AIDS?
If you were diagnosed with a health condition, AffinityQuotes can help determine if you need a Level, Graded, or Guaranteed Issue policy and then find the BEST insurance carrier for you.
Here’s why we believe that…
First, we are independent agency and represent dozens of different insurance carriers. We're not obligated to any one carrier which gives us the freedom to shop the best deal for YOU.
Call 855-400-7766 to see what a licensed AQ agent can do for you
We'll happily answer all of your questions for you at no-cost.