When you want life insurance right away, there is no better option than immediate issue life insurance.
After all, who wants to take an exam when they are only looking at getting a $25,000 whole life insurance policy, focused on paying for a funeral, burial and final expenses.
The good news is the team at IBUSA is here for you. We represent the best final expense insurance companies in the U.S.
So, let’s get busy talking about burial insurance with no waiting period.
Dying is Expensive
Maybe you have not paid attention but funeral and burial expenses are a lot higher than most people realize, often running $10,000 to $12,000.
Failure to account for these considerable expenses (an all-too-common error) can quickly muck up an otherwise well-thought-out estate plan, or leave your loved ones with a huge financial burden.
In most states, end-of-life expenses are priority debts, which means money for burial and funeral costs is one of the first expenditures paid out of a decedent’s estate.
If the estate has insufficient cash on hand, the estate’s executor may need to liquidate other estate assets to cover the costs.
Or worse—funeral and burial expenses may need to be paid out-of-pocket by family members.
Even if the estate has sufficient cash, the large distribution significantly reduces the wealth ultimately available for heirs.
Cost Effective and Convenient
Funeral and burial insurance can provide a cost-effective and convenient means of preparing for future final expenses.
While it’s sometimes difficult for older applicants to obtain other types of life insurance coverage, numerous insurers offer burial insurance policies specifically designed for seniors.
And, for applicants in need of coverage right away, many insurers issue immediate benefit policies with no waiting period.
Pre-Existing medical conditions are another common impediment faced by life insurance applicants.
Guaranteed acceptance burial insurance—which doesn’t require any medical screening—presents a helpful alternative for individuals whose medical situation might otherwise make them ineligible for life insurance coverage.
Although you generally can’t get immediate coverage and guaranteed acceptance with the same policy, most seniors will be able to qualify for a funeral insurance policy suited to their specific needs.
So, if you’re concerned about protecting loved ones from high future final expenses, funeral and burial insurance may be an advantageous addition to your financial planning strategy.
What is Burial Insurance and How does it Work?
Burial expense insurance is whole life insurance designed for the express purpose of ensuring sufficient cash is available to cover funeral and burial costs; thereby protecting loved ones and estate assets from a potentially big expense.
Mechanically, burial insurance works along the same lines as other permanent life insurance. It is typically a whole life insurance policy that offers many of the benefits of whole life, such as a guaranteed level premium, guaranteed death benefit and guaranteed cash value accumulation.
Note: Beware of certain policies that offer low introductory rates, only to increase premiums every five years. These policies start off affordable, but overtime your premium rates will increase so much that you will no longer be able to afford the policy.
After the burial insurance policy is issued, the policyholder makes regular premium payments to the insurance company, and when the policy is triggered by the death of the insured person, the insurer pays the policy’s death benefit to the designated beneficiary—usually the insured’s estate or one or more relatives who will be involved in administering the estate.
The beneficiary or estate administrator then uses the funds to pay for any funeral or burial bills.
If any money is left over, it either stays with the named beneficiary or—if the money was paid into the estate—it is distributed to heirs like other estate assets or can be used for other obligations of the estate.
How Burial Insurance Rates Are Determined
Burial insurance premium rates are based on a variety of factors including age and life expectancy, medical history, and desired benefit level.
Burial policies typically provide a death benefit somewhere in the range of $5,000 to $30,000, though higher and lower benefit amounts are available from some of the insurers that issue burial and funeral policies.
Most burial insurance policies have fixed premiums and benefits, which means premium and death-benefit amounts are guaranteed to stay the same for as long as the policy remains in place.
“Graded-premium” policies permit the insurance company to periodically reevaluate its underwriting risk and adjust premiums accordingly.
Although graded-premium policies usually come with lower payments upfront, they are prone to significant increases as the insured person ages.
A true burial expense policy is permanent, whole life insurance, which means that—as long as the premiums are paid—the policy is guaranteed to remain effective for the remainder of the insured’s life.
Like other permanent policies, most burial insurance accrues increasing amounts of cash value the longer the policy stays in place.
After enough premium payments have been paid and sufficient cash value has accrued, a policy is eventually “paid up,” and no additional premium payments are necessary.
Burial Insurance vs Final Expense Insurance
Burial insurance is very similar to final expense insurance, and the two terms are often used interchangeably.
A subtle distinction between the two is that, where final expense insurance is intended to cover a broader range of expenses relating to estate administration (e.g., legal fees, taxes, final medical expenses and other estate debts, memorial service and burial costs), burial insurance is more narrowly targeted for funeral and burial expenses.
In other words, if you get a whole life policy focused on paying burial, then you bought burial life insurance versus a whole life policy focused on paying all your final expenses, including burial, then you just bought final expense life insurance.
Guaranteed Acceptance Life Insurance With No Waiting Period
Unlike most permanent life insurance, burial insurance is life insurance that does not require a physical or medical exam during the application process.
The applicant just submits a form requesting basic demographic and health-history information.
There are essentially three types of burial insurance policies available, level, graded, and guaranteed issue.
Although, the underwriting standards for burial insurance are more relaxed than compared to most other life insurance policies, a serious existing medical condition can result in disqualification on any policy except guaranteed issue.
And that is why some insurers offer “guaranteed acceptance” (or “guaranteed issue”) policies that do not require any health or medical screening.
When applying for a guaranteed issue policy, the applicant’s health status and medical history are simply not considered.
As long as the applicant is within any age bracket applicable to the policy, and they reside in a state where the policy is available, the application will be accepted.
Because of the easy underwriting process, guaranteed acceptance policies are a great way to obtain life insurance for applicants with a health history or preexisting condition that might otherwise preclude life insurance coverage.
Most companies that offer guaranteed acceptance funeral insurance set an age range that applicants must fall within to be eligible for coverage.
Typically, the range is from around age 45 to age 80 or so. This doesn’t mean that coverage ceases on an insured person’s eightieth birthday; just that a policy must be initially issued before the prospective insured reaches age 80 (or whatever that insurance company’s maximum age happens to be).
In exchange for guaranteed acceptance, the cost of the life insurance policy will be a little higher, and coverage will be limited during an initial waiting period (usually two years) after the policy is issued.
Final Expense Life Insurance Quotes
The following are sample $25,000 final expense insurance rates for a male. Most of these quotes are for instant issue life insurance with no waiting period, or maybe a small waiting period of 24-72 hours.
All sample final expense insurance rates are for informational purposes, are subject to change, and must be qualified for.
$25,000 Burial Life Insurance Rates ages 50-59
All whole life rates shown below are fixed and will stay the same for your lifetime.
$25,000 Final Expense Life Insurance Rates ages 60-69
All whole life quotes shown below are guaranteed to stay the same for your lifetime.
$25,000 Burial Insurance Rates ages 70-79
All whole life insurance quotes shown below are guaranteed to stay the same for your lifetime.
$25,000 Final Expense Insurance Quotes ages 80-85
All whole life insurance rates shown below are fixed for life and will not increase.
Immediate Coverage Burial Insurance
A standard burial expense policy, typically a graded benefit or modified benefit, has a “waiting period” extending for two years (sometimes three) from the date the policy is issued.
During that window, the face value amount of the death benefit is not yet effective. If the insured dies during the waiting period, the insurer will pay back the total amount of premium thus far paid into the policy, usually with interest.
If the policy is triggered after the waiting period has concluded, the insurer pays the full coverage amount.
The idea behind a waiting period is that it allows the insurer to charge lower premiums to policyholders overall by avoiding large payouts on policies that have not yet paid a significant amount of premium.
Some insureds, though, want or need coverage right away. “Immediate coverage” (sometimes, “immediate issue”) policies—burial insurance with no waiting period—meet that demand by eliminating the waiting period altogether.
A waiting period is basically a tradeoff between an insurance company and its policyholder. Because a waiting period reduces the overall risk level to the insurer, the insurer charges lower premiums.
Conversely, because an immediate coverage policy requires the insurer to accept the risk of a large payout after only one or two premium payments, immediate coverage policies come with comparably higher premiums.
Due to the increased risk level, the underwriting standards for no-waiting-period burial insurance policies are a little higher than for policies with a waiting period.
The applications for immediate issue burial insurance may request more details about an applicant’s medical history and current health status than a level or standard burial insurance policy (though a medical exam is still unnecessary).
Most applicants will still qualify for immediate issue life insurance coverage, but someone with a significant preexisting medical condition might not be eligible for a policy without a waiting period, i.e. a graded benefit or modified benefit policy.
Different insurance companies have different standards as to what types of medical conditions they will accept with an immediate issue life insurance coverage policy.
In general, applicants with a terminal illness, cancer, Alzheimer’s Disease, or who have had a recent heart attack, heart surgery, or stroke will not be able to obtain a policy that does not include a graded death benefit, i.e. 2-3 year waiting period for full death benefit payout due to natural causes.
As an alternative, some graded benefit policies have waiting periods but pay out a certain percentage of the policy proceeds (rather than a premium refund like with a regular policy that has a waiting period) if the insured dies while the waiting period is in effect.
For example, a graded benefit burial insurance policy might pay out 30% of the death benefit during the first year, 60% during the second, and then the full coverage amount kicks in once the policy has been in place for two years.
“Graded Benefit or Graded Coverage” policies, as they are called, can be a good way for individuals who can’t qualify for a no-waiting-period policy to obtain at least some coverage right away.
Too many seniors simply conclude that they are ineligible for life insurance based on their age or health history.
But, while it does generally get a little more difficult to find life insurance coverage the older you get, burial insurance provides a viable alternative for many older individuals.
The right burial insurance policy protects loved ones from major costs and helps keep an estate plan intact.
An experienced life insurance professional can help you decide if burial insurance would be a good addition to your estate plan.
At IBUSA, we work with the top life insurance companies. Please give us a call today for your complimentary life insurance strategy session with an experienced life insurance agent.