One of the main selling features insurance companies and agents use when describing a burial life insurance policy is that often, individuals can qualify for coverage immediately. In other words, they can purchase their burial life insurance policy with no waiting period.
While it is technically true that most burial life insurance policies can be purchased immediately without having to wait for a lengthy underwriting process, the term “no waiting period” can often be confused with the idea that one is immediately insured for all causes of death upon approval regardless of what TYPE of burial life insurance policy one has applied for.
This is why, in this article, we’re going to clear up many of the misconceptions people may have about how burial life insurance policies work. How coverage can begin immediately, and how certain guaranteed issue burial life insurance policies will contain a waiting period before they will offer full and complete coverage to the policyholder (or insured).
What is a burial life insurance policy?
A burial life insurance policy, or final expense insurance, is a type of life insurance specifically designed to cover end-of-life expenses such as funeral costs. It is typically a whole life insurance policy, meaning that it has a fixed premium and provides coverage for the entirety of the policyholder’s life as long as premiums are paid.
The death benefit from these policies can cover expenses such as funeral costs, medical bills, outstanding debts, or even final expenses that other forms of insurance may not cover.
Burial life insurance policies typically have smaller death benefit amounts than traditional ones and are often marketed to seniors or individuals with limited financial means.
Two types of No-Waiting Burial Insurance Policies
There are two main types of burial life insurance policies: simplified-issue life Insurance Policies and guaranteed-issue life Insurance Policies.
Simplified Issue
Simplified Issue Life Insurance Policies are designed for individuals with standard or above health and looking to avoid taking a medical exam or obtaining full coverage as soon as possible. Some of the features of a simplified issue life insurance policy include:
They typically have a shorter application process that only requires basic health questions and can be approved quickly. The coverage starts immediately after the application is approved, and there is no waiting period.
- No medical exam is required.
- Approval based on answers to health questions on the application
- Smaller coverage amounts compared to traditional policies
- Higher premiums than traditional policies
- Coverage can be purchased at a wider range than most guaranteed issue life insurance policies.
- The policy can be purchased as a term or a whole life insurance policy.
- Individuals seeking final expense coverage typically purchase a simplified whole life insurance policy.
With respect to simplified-issue life insurance policies, it is OK to refer to them as a “no-wait” option because eligible applicants will usually be approved IMMEDIATELY, and full coverage will begin immediately upon approval, pending your first premium payment.
Guaranteed Issue
Guaranteed-issue life insurance policies do not require a medical examination or health-related questions to be answered. They are typically more expensive than traditional and simplified-issue life insurance policies and may have lower coverage limits.
That said, guaranteed issue life insurance policies are frequently the only option for people with serious health problems or those denied coverage elsewhere.
Guaranteed-issue life insurance policies also have stricter age requirements for applying and contain a graded death benefit or WAITING PERIOD before the policy offers complete coverage for natural causes of death.
Guaranteed-issue life insurance policies allow one to be approved for coverage with NO WAITING PERIOD; that coverage will not be fully in effect for at least two and sometimes three years.
For this reason, we at IBUSA do not like to refer to Guaranteed Issue Life Insurance Policies as no-wait burial insurance policies.
(Moving forward we will now only refer to a Simplified Issue Life Insuance Policy as a No Waiting burial life insurance policy).
How to obtain a Simplified Issue Burial Insurance Policy with No Waiting Period
A Simplified Issue Burial Insurance Policy is a type of life insurance policy that requires a limited amount of underwriting, typically just a few medical questions and no medical examination. These policies are designed to cover end-of-life expenses, such as funeral and burial costs.
To obtain a Simplified Issue Burial Insurance Policy with no waiting period, you will typically need to:
- Find a company that offers this type of coverage. Not all insurance companies offer Simplified Issue Burial Insurance Policies, so you may need to shop to find one that does.
- Meet the eligibility requirements. While you will not be expected to complete a medical exam, simplified issue life insurance policies will require you to answer a series of medical questions, depending on your chosen insurance carrier. Additionally, most simplified issue life insurance companies will look at additional data before approving your application, which may include a prescription database check, a criminal background check, a DMV report, and a creditworthiness report, in addition to a variety of internal reports insurance companies have access to (Medical Information Bureau MIB)
- Choose the coverage amount and the premium payment option.
- Apply and pay the first premium once you have been approved for coverage.
Can My Application be Denied?
Unlike a guaranteed-issue life insurance policy, which only requires an applicant to meet a minimum age requirement and be a US citizen living in a state where these types of life insurance policies are offered, applicants applying for a simplified life insurance policy can be denied coverage.
They can be denied for reasons that might not cause rejection by a fully underwritten or traditional life insurance policy. Factors that may lead to denial of coverage include but are not limited to:
- Pre-existing health conditions that are considered high-risk by the insurance company
- Unacceptable answers to health questions on the application
- Incomplete or inaccurate information on the application
- Failure to pass a medical exam if required
- A history of criminal activity or fraud
- Non-payment of premiums
This is why it’s always prudent to first speak with an insurance professional with access to dozens of insurance products. They can prevent you from being denied coverage if you don’t automatically appear to be approved.
Fortunately, here at IBUSA, we offer a wide variety of life insurance products from dozens of different insurance companies, so if you are looking for a “no wait” burial life insurance policy, we should be able to provide you with several other options.
Frequently Asked Questions
What is a no-waiting period life insurance policy?
A no-waiting-period life insurance policy provides coverage immediately upon approval without a waiting period. This differs from traditional policies, which may have a waiting period before coverage starts.
This should not be confused with a guaranteed-issue life insurance policy, which will approve applicants immediately but not offer full coverage for at least two years.
What are the benefits of a no-waiting period life insurance policy?
The benefits of a no-waiting-period life insurance policy include immediate coverage, peace of mind, flexibility, avoiding the financial burden, and, in some cases, no medical exam required.
What types of life insurance policies have no waiting period?
Simplified-issue life insurance policies and guaranteed-issue life insurance policies have no waiting period. Guaranteed-issue life insurance policies, however, contain a graded death benefit that limits when the policy begins to cover natural causes of death.
Are no waiting period life insurance policies more expensive than traditional policies?
The premiums for no-waiting period life insurance policies are higher than traditional policies.
Are there any restrictions on who can get a no-waiting period life insurance policy?
Simplified-issue life insurance policies typically require a short application with basic health questions, while guaranteed-issue life insurance policies are available to individuals regardless of their health status. However, coverage amounts will typically be lower, and the premiums will be higher than traditional policies.
Can I use the death benefit from a no-waiting period life insurance policy for any expenses?
The death benefit from a no-waiting period life insurance policy can cover end-of-life expenses such as funeral costs, medical bills, outstanding debts, or even final expenses that other forms of insurance may not cover.
Is there an age limit for obtaining a no-waiting period life insurance policy?
The age limit for obtaining a no-waiting period life insurance policy may vary depending on the provider or the type of policy you choose.
Can I purchase a no-waiting period life insurance policy if I have pre-existing health conditions?
You can still purchase a no-waiting period life insurance policy even if you have pre-existing health conditions. Simplified issue life insurance policies will require applicants to meet a minimum health requirement that varies between carriers. In general, though, they will typically require an applicant to be at a Standard or above rate to qualify for coverage.
Applicants with more serious pre-existing medical conditions should qualify for a guaranteed-issue life insurance policy provided they meet the minimum age requirements. They are citizens living in a state where these policies are offered.
