The best final expense insurance companies in the U.S. are companies that combine great financial ratings, top level policies, with low prices.
We wrote this review of Lincoln Heritage because visitors will often come to our site to compare it with the other top burial insurance plans.
We have a full breakdown of the company and its flagship product, Funeral Advantage, below. But the quick synopsis of this article is that if you are considering life insurance from Lincoln Heritage, you might want to investigate your other options before signing on the dotted line.
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Review of Lincoln Heritage
Table of contents:
- About Lincoln Heritage
- Lincoln Heritage Final Expense Products
- Applying for Lincoln Heritage Final Expense Insurance
- Funeral Advantage Waiting Period
- Immediate Coverage Through Lincoln Heritage
- Lincoln Heritage Funeral Advantage Rates
- Funeral Advantage Benefits
- Life Insurance Riders
Lincoln Heritage Life Insurance Company, a registered trademark of Phoenix-based Londen Insurance Group, Inc., is a life insurance carrier specializing in burial insurance for seniors.
Founded nearly sixty years ago, Lincoln Heritage issues more agent-produced final expense policies than any other carrier.
The company’s insurance options are fairly narrow, and their underwriting is on the strict side for final expense coverage. But Lincoln Heritage enjoys a reputation for good customer service.
Lincoln Heritage boasts an A+ rating from the Better Business Bureau and an A- rating from A.M. Best.
This means that Lincoln Heritage’s clients are more satisfied than average, and the company is financially strong, though there are financially stronger life insurance companies.
Lincoln Heritage also maintains a low NAIC complaint index rating of .75 for 2019, meaning the company gets fewer complaints per its share of the U.S. market than its competitors. Source.
Lincoln Heritage’s leading policy is called “Lincoln Heritage Funeral Advantage,” and the company also offers a Modified Plan for applicants who are ineligible for Funeral Advantage due to preexisting health issues.
Both policies are small whole life insurance policies, which means they have fixed premiums and death benefits and are guaranteed to remain in place for the insured’s entire life.
As whole life insurance, policies accrue cash value the longer they remain in place. Cash value can be borrowed against during the insured’s life, with any loan amounts remaining unpaid upon the insured’s death deducted from the policy proceeds.
Lincoln Heritage issues new policies to applicants between ages 40 and 85. Up to age 80, new applicants can obtain a maximum of $20,000 in coverage. Coverage for applicants over 80 is limited to $15,000.
Lincoln Heritage issues Funeral Advantage policies in every state but New York. Modified Plan policies are available in every state but New York, Alaska, and Montana.
Lincoln Heritage funeral insurance policies are what is known as “simplified issue,” which means the application process does not include a physical or medical check-up but does require completion of a questionnaire with health and medical history information.
The company will also run a prescription history report when reviewing applications. For policies with higher coverage limits, an applicant may need to have a telephone interview with a Lincoln Heritage representative.
Unlike most life insurers offering similar products, Lincoln Heritage doesn’t consider an applicant’s body-mass index (“BMI,” the ratio between the applicant’s height and weight).
Applicants with some medical conditions are ineligible for Funeral Advantage but can still qualify for Modified Plan coverage.
Without limitation, conditions that preclude Funeral Advantage include a prescription for a blood thinner or other “high-risk” medication; a recent history of heart or circulatory problems or stroke; most cancers, kidney or liver disease including cirrhosis; significant chronic respiratory problems like emphysema, COPD, or chronic bronchitis; cystic fibrosis, tuberculosis, multiple sclerosis, severe diabetes, Alzheimer’s, and ALS.
The principal differences between Funeral Advantage and Modified Plan are that Modified Plan has comparatively higher premiums and a mandatory waiting period.
Because Lincoln Heritage considers applicants who qualify for Funeral Advantage to have less risk of early death, Funeral Advantage has lower premiums and is available with full coverage commencing as soon as a policy is issued.
Lincoln Heritage does not offer a “guaranteed acceptance life insurance” policy. Applicants with HIV / AIDS, or who have been diagnosed with a terminal illness, or who are currently hospitalized, incarcerated, receiving hospice care, or residing in a long-term care facility, will not be able to obtain life insurance through Lincoln Heritage.
The underwriting process for every life insurance company is a little different, and not all insurers screen for the same conditions.
At least some of the circumstances that would lead to ineligibility, substantially higher premiums, and/or a mandatory waiting period when applying with Lincoln Heritage could be accepted by one or more other life insurers.
When a life insurance policy has a “waiting period,” it means that the full death benefit amount does not take effect until after the policy has been in place for a defined period of time.
If the insured dies during the waiting period, the beneficiary receives a premium refund, usually with interest, but not the policy’s entire proceeds.
Waiting periods allow life insurers to charge lower premiums overall by mitigating the insurer’s risk of a large pay-out on a recently issued policy that hasn’t contributed much premium.
Modified Whole Life Waiting Period
Like most life insurance companies that offer funeral and burial insurance, Lincoln Heritage includes a waiting period in many of the policies it issues. The period lasts for either three years (for new insureds under age 50) or two years (for older applicants).
Funeral Advantage policies are available with no waiting period.
If a policy is triggered during its waiting period, Lincoln Heritage calculates the payout as a complete refund of premiums paid so far, plus ten percent interest if the policy is in the first year of the waiting period, twenty percent if it’s in the second, or thirty percent in the third year.
Ten percent interest during the waiting period is about average for final expense carriers. The twenty and thirty-percent rates for policies that have been in place longer are more generous than what most other companies offer during waiting periods.
Waiting periods are fairly standard in funeral insurance policies, and consumers shouldn’t necessarily view them as a bad thing. In exchange for the reduced risk resulting from a waiting period, insurers can charge lower premiums or offer higher coverage levels for the same premium. And waiting periods also allow life insurers to provide coverage to applicants who might otherwise be ineligible.
Of course, there are some situations in which it’s better to have coverage that kicks in immediately. In the world of final expense insurance, coverage that starts as soon as the policy is issued is called “immediate coverage” or “immediate issue.”
Lincoln Heritage offers immediate coverage (i.e., no waiting period) policies for applicants who qualify for Funeral Advantage policies.
Applicants who are only able to qualify for Lincoln Heritage’s Modified Plan cannot get immediate coverage.
Even for healthy applicants, choosing a no-waiting-period policy will result in higher premiums than if the same applicant instead chose a policy that was otherwise identical but included a waiting period.
Policyholders who qualify for immediate issue life insurance coverage can opt for Lincoln Heritage’s “20 Pay Option.” When 20 Pay is chosen, the policyholder’s obligation to pay premiums ceases after the policy has been in place for twenty years.
At that point, the policy is “paid up,” remaining effective for the rest of the insured’s life but with no further premiums are owed.
20 Pay requires higher premium payments in the near-term but can be a smart choice for an insured who anticipates living significantly longer than twenty years after the policy is issued.
Lincoln Heritage’s life insurance rates tend to be on the high side.
Like other life insurance companies, Lincoln Heritage bases its premiums primarily on an applicant’s age, sex, health status, and desired benefit level.
All things being equal, younger, healthier, and female insureds will pay lower premiums, and older male insureds with existing health problems will pay higher premiums.
Lincoln Heritage also has higher rates for tobacco users.
Although existing medical issues will result in higher premiums, rates are fixed when a policy is issued.
An insured who later develops a medical condition that would have led to higher premiums or been disqualifying will not have his or her premiums increased.
Although the Funeral Advantage costs more than a similar burial insurance policy, many people prefer the benefits of the plan.
Notable Features and Options
Lincoln Heritage advertises as a benefit of its policies that claims are paid out within 24 hours of approval. This doesn’t mean that a policy’s death benefit will be paid to the beneficiary within 24 hours of the insured’s death—or within 24 hours of when a claim is submitted.
Instead, Lincoln Heritage strives to pay claims within 24 hours after it has determined that the claim is valid and payable.
Importantly, though, this is not a binding, enforceable contractual commitment but rather a company protocol that cannot always be met.
Funeral Consumer Guardian Society
All Lincoln Heritage life insurance policies include membership in the Funeral Consumer Guardian Society.
The membership benefits are purported to be help in documenting the insured’s wishes for memorial services and disposition of remains and assistance to surviving family members with pricing and arranging funeral homes upon death.
Funeral Consumer Guardian Society is the main differentiator with Lincoln Heritage versus the competition.
Lincoln Heritage final expense insurance is offered with several riders (at additional premium) which may or may not be of value, depending on the individual insured.
The “Child Rider” provides term life insurance coverage for children (including step-children), grandchildren, and great-grandchildren. The term coverage is priced at $2 in additional premium for each $5,000 of coverage (up to $25,000) purchased for the covered child. The coverage ceases when the child reaches age 25, but covered children have the option of converting the coverage into permanent life insurance of equal or lesser value.
Finally, Lincoln Heritage offers an AD&D (“Accidental Death and Dismemberment”) Rider with increased benefits in the event of the insured’s accidental death. The AD&D coverage is offered in units of $5,000, with a total of five units available per policyholder. Coverage amounts are doubled if death occurs due to a car accident—or quadrupled if death occurs due to an accident occurring while the insured is a passenger on a common carrier or due to an act of war or terrorism.