With the rising cost of just about everything in this world nowadays, it only makes sense that more and more people are growing concerned about what it might cost to pay for their burial. This is especially true for children of parents who have either don’t have enough in savings to pay for their own burial or are not willing or able to purchase a small burial life insurance policy.
For this reason…
We wanted to take a moment and discuss some of the most common questions we get from folks wondering if it will be possible for them to purchase a burial life insurance policy on their mother and/or father so that you can get a general idea about whether purchasing such a policy might be right for you.
Questions that will be addressed in this article will include:
- Can I purchase a burial life insurance policy on my parent?
- What “type” of burial life insurance policies are available, and what requirements must be met to qualify?
- What questions should I ask when purchasing a burial life insurance policy on my parent?
- How can I be sure that I am buying the “right” burial life insurance policy for my parent?
So, without further ado, let’s dive right in!
Can I purchase a burial life insurance policy on my parent?
Yes, grown children who are not financially dependent upon their parents any longer can and often will purchase a small burial life insurance policy on one or both of their parents. This is because even though an individual may not be financially dependent upon their parent’s income any longer, it iss reasonable to assume that upon one or both of their parent’s death, they may incur some type of financial loss burden.
Is the main reason why many individuals begin looking at the possibility of purchasing a burial life insurance policy on their parents and representing what would be considered an “insurable interest”. And, it is this “insurable interest” that most insurance companies (if not all) life insurance companies would be looking for when choosing to issue an insurance policy on another.
What “type” of burial life insurance policies are available, and what requirements must be met to qualify?
Now that we’ve determined that an individual may be able to purchase a burial life insurance policy on their parent, let’s now turn our attention to what “kinds” of burial life insurance policies one might purchase. You see, when it comes time to purchase a burial life insurance policy on a parent, most folks (whether they realize it or not) will usually be looking at either purchasing a Simplified Issue Life Insurance Policy or a Guaranteed Issue Life Insurance Policy.
This is why…
We want to take a moment and describe how each of these two different types of life insurance policies work so that you can gain a better understanding of “which” life insurance policy might be the “right” one for you.
Simplified Issue Life Insurance Policy.
The first “type” of burial life insurance policy that we generally like to look at will be a simplified issue whole life insurance policy because these “types” of life insurance policies will typically be less expensive than most guaranteed issue life insurance policies simply because not everyone will be able to qualify for them.
This is because simplified issue life insurance policies will have certain health requirements one must meet to be able to purchase one.
The reason why…
They are called “simplified issue” is because, unlike traditional term or whole life insurance policies, which will require an applicant to take a medical exam, simplified issue life insurance policies won’t. Instead, insurance companies will rely on a few medical questions along with a prescription database check as well as a department of motor vehicle check and criminal background report.
Common questions you’ll likely be asked when applying for a simplified issue life insurance policy may include:
- Has the proposed insured ever been:
- Diagnosed with a terminal illness?
- Received any organ transplants?
- Had any part of the body amputated due to illness or disease?
- Received dialysis?
- Diagnosed with Cancer, Dementia, Muscular dystrophy, Parkinson’s disease, Multiple sclerosis, Cerebral Palsy, Sickle cell anemia, Cystic fibrosis, Down’s syndrome, or Lupus?
- In the past two years, has the insured suffered from a heart attack or a stroke?
- In the past two years, has the proposed insured been hospitalized for any reason?
- Have you been diagnosed with any chronic lung disease which may have required oxygen treatment?
- Have you ever been diagnosed with or treated for Acquired Immune Deficiency Syndrome (AIDS) or ever tested positive for the Human Immunodeficiency Virus or HIV?
Now we should note that…
Most of you common Simplified Issue Life Insurance application questions will generally sound something like what we’ve included above, it’s important to understand that each life insurance company will have their own unique set of questions which may or may not include something that may preclude your parent from being able to qualify for coverage.
The benefit of being…
Able to qualify for a Simplified Issue Life Insurance Policy is that these “types” of burial life insurance policies will usually be the most affordable small whole life insurance policy one can buy. Once an individual has been approved for coverage, their policy will IMMEDIATELY provide coverage to the insured for both NATURAL and ACCIDENTAL causes of death.
The only potential disadvantages…
To these “types” of burial life insurance policies is that there are a wide variety of different types of Simplified Issue Burial Life Insurance Policies, and not all of them will provide level premium whole life insurance coverage. Instead, some may only provide “term coverage” up to a certain age or may increase in cost as one ages. Which is something that one will want to be aware of prior to actually purchasing one of these “types” of insurance policies.
Guaranteed Issue Life Insurance Policies.
Guaranteed Issue Life Insurance Policies will be another option available to many individuals looking to purchase a burial life insurance policy on one or both of their parents. The benefit of purchasing one of these “types” of burial insurance policies is that proposed insureds won’t need to take a medical exam or answer any “health-related” questions. Thus, the name…
These types of life insurance policies will simply require that an individual meet:
- Certain age requirements (usually be between 45 and 85 years of age) at the time of applying for coverage.
- Be a US citizen.
- And live in a state where these “types” of life insurance policies are offered.
This means that if an individual can meet these three requirements and can afford their coverage, they will be approved regardless of their current health or the existence of any pre-existing medical conditions.
“Which is great!”
The only problem is…
These types of burial life insurance policies will usually only provide up to about 25,000 dollars in coverage (vs. 50,000 commonly available with simplified issue burial life insurance policies). They tend to be a bit more “pricey” than a simplified issue burial life insurance policy.
Unlike a simplified issue, life insurance policy that would provide an insured IMMEDIATE coverage for any cause of death (excluding suicide or any other specific exclusions), guaranteed issue life insurance policies will contain a graded death benefit clause which states that an insured must own their policy for a period of time before their policy will provide coverage for NATURAL causes of death.
Which means that…
Until the guaranteed issue life insurance policies graded death benefit period has expired, insured individuals will only be insured for ACCIDENTAL causes of death. Causes such as those resulting in an automobile accident, a slip or fall or a natural disaster. Natural causes of death such as heart attack, cancer, or other sickness or disease-related causes would not be covered for up to two to three years depending on which company you chose to purchase your Guaranteed Issue Life Insurance Policy from.
This is why…
We here at IBUSA will always look to see if a client can first qualify for a Simplified Issue Burial Life Insurance Policy before turning our attention to a Guaranteed Issue Life Insurance Policy. However, just because we usually try and locate a Simplified Issue Life Insurance Policy that someone will be able to qualify for, doesn’t mean that we don’t see “value” in purchasing a Guaranteed Issue Life Insurance Policy.
The truth is, in many situations, a Guaranteed Issue Life Insurance policy may be the only kind of insurance policy that an individual will be able to qualify for which is why, in those situations, having a policy (even with a graded death benefit attached) can be a great option provided that the owner of the insurance policy is well aware of what they are purchasing and the pros and cons of such a policy.
Which brings us to the next topic that we want to address is:
What questions should I ask when purchasing a burial life insurance policy on my parent?
Whenever anyone is thinking about purchasing a life insurance policy, the first thing that they’re going to want to understand is what “kind” of life insurance policy are they being offered? Is it a term life insurance policy, a whole life insurance policy, or guaranteed issue life insurance policy?
You can begin to get an understanding of what it is that they are being offered. From there, you’ll then want to ask three specific questions so that you can get a better understanding of whether or not the insurance policy that you are being offered is going to meet your family’s needs.
3 Important Questions to Ask
#1. How much coverage am I able to qualify for? And will the coverage remain the same for the life of the policy?
This is an important question to ask because you want to make sure that if you’re spending the money to purchase a life insurance policy, the cash death benefit that you would receive if the insured died while the policy was in place is equal to what you believe it will be.
Now, this may seem obvious, but you would be surprised by how many families we speak to who thought their loved one has an insurance policy for one amount only to learn after they died that the actual amount of coverage that they had was far less than originally believed!
#2. How long will the coverage remain in place?
This is a VERY important question because a lot of folks will often choose to purchase a life insurance policy based on price alone and not realize that the policy that they are thinking about purchasing today may become much more expensive 5, 10 or 15 years from now or in some cases may even expire or terminate entirely!
This is why…
It’s important to understand exactly how long your life insurance policy will last.
Additionally, if you are told that the policy you are considering has a “guaranteed renewable” clause allowing you to continue to keep coverage in place even after your original policy has expired, it’s important to FULLY understand how that “clause” works.
In some cases, while it is “technically” true that a life insurance policy will allow someone to “renew” their policy each and every year after the initial policy term has ended, what many insurance agents fail to mention is that there will most likely be a new “renewal price.” And that new renewal price my exceed what you are willing or able to pay, which would effectively eliminate any insurance you have and make all your previous payments that you made a complete waste of money!
#3. How much will my insurance cost, and is that price FIXED for the life of the policy?
So now that we understand that we need to know what “kind” of life insurance policy that we’re purchasing and we also need to know how “long” it will say enforce, the thing that we’re going to want to make sure we know is how “much” the insurance is going to cost, and we’ll want to make sure that the price that you pay for your insurance TODAY will be the same you pay 10, 15 or 20 years from now.
You may find yourself in a situation where you are slowing being “price-out” of your insurance, presumably as you are growing older and closer to actually needing it!
The good news is…
That you’ve made it this far in this article, which means that you’re much less likely to fall victim to many of the “pitfalls” many individuals will suffer from when purchasing a burial life insurance policy. Especially if you take a few additional steps to ensure that you ultimately find the best burial life insurance policy for you and your family.
How can I be sure that I am buying the “right” burial life insurance policy for my parent?
In our experiences here at IBUSA, we’ve found that usually, the “best” approach in helping someone find the “best” life insurance policy for them is to first:
Fully understand what an individual is trying to achieve by purchasing their life insurance policy. And then slowly explain what options may be available to you so that you can intelligently decide which insurance policy is going to be right for you and your family.
This will also…
Be when your IBUSA agent will help you “shop” a variety of different life insurance companies and help you determine which life insurance companies will allow you to be the “owner” of the insurance policy on your parent providing you with complete control over the policy even though you aren’t the one being insured!
Even though all of this may seem a bit confusing and/or overwhelming, the truth is, we’re good at what we do, and we understand that our job isn’t to “sell” you a life insurance policy. We know you already want to “buy” a life insurance policy, which is why our only goal is to help you decide which policy is going to be the “best” for you. This is why, you’re never going to be pressured by one of our agents and why we’re always earning referrals from our clients!
So, if you’re ready to get started, just give us a call, we’re here to help.