Death is an unforgettable part of life; most do not like to think about it. But planning for a secure future is crucial to stabilize your loved ones financially after you pass away.
One aspect worth mentioning you can consider for this preparation is burial insurance. This policy is specified to pay financial coverage for funeral and other expenses at the policyholder’s death. Mostly people older or with impaired health conditions that make them ineligible for traditional life insurance go for this coverage.
However, certain factors and limitations lead you to deny burial insurance coverage like many other insurance policies. Are you having questions like whether you can be denied burial insurance, then this article is for you. In this blog post, we will discuss the reasons for potential denials and some common myths associated with burial insurance.
Can you be denied burial insurance?
While yes, it happens in very minimal cases. Nowadays, most insurance companies provide guaranteed issue burial insurance, which means you are eligible for coverage as long as you meet the policy’s minimum age and health requirements.
It is considered one of the easily accessible policies compared to regular life insurance, but still, some factors may lead you to deny coverage. Here are the reasons why burial insurance often gets denied.
1- Age
Burial insurance policies may have age restrictions. If the applicant is above the maximum age limit given in the policy, the coverage may get denied.
2- Health Conditions
This policy does not need any medical test or report, but you may have to answer some health-related questions. If you have some severe health conditions or extreme illness, the insurer will decline your coverage.
3- Unable to provide information
You must provide accurate information when applying for any insurance policy. If you do not provide essential details or provide, false information will cause a denial.
4- Non-Payment
You have an idea that premium payments are crucial to maintaining coverage. If you do not pay the premium payments, your policy will lapse, and coverage may be denied.
5- Waiting Time
Some policies have a waiting period before the full coverage takes effect. If death occurs during this time, the full payment may not be paid, or the policy may be denied.
What are the general misconceptions or myths about burial insurance payout denied?
Here are some most common myths about burial insurance payout denied:
Myth: this policy is only for older people or those having health issues.
Fact: it is a good option for people of all ages, even those who are healthy and young. Burial insurance can be a great way to ensure that your final expenses will be paid, regardless of age or health status.
Myth: the payouts get denied if the policyholder dies by suicide.
Fact: not always the same case. Some policies have suicide clauses with two years of waiting period. It means if the insured dies by suicide within two years of this period, the payout will be denied. But if he dies after this period, the payout will be made.
Myth: the insurance can be denied if some extreme illness gets diagnosed in the insured person.
Fact: not in all cases. Some policies have terminal illness clauses, but these are applied if the insured is diagnosed within a specific time, like six months or a year only. After this period, the payout will be paid.
It is vital to have awareness of these myths so that you can make well-informed decisions about your policy. Moreover, you can also seek guidance from a financial advisor or insurance agent.
Tips to Avoid These Misconceptions
Before getting any insurance policy read the terms and conditions of the policy carefully. It will help you better understand the policy’s details, along with any potential limitations or exclusions.
If you have any queries regarding your policy, be confident to ask your insurer. They will answer any questions and guide you to find the best choice for your needs.
Compare several quotes from various insurance companies before finalizing a purchase. It will help you to find the best policy according to your budget and needs.
What to do if you’ve been denied?
Honestly, there is nothing that can make you disqualified from a burial policy. The only exceptions are mistakes or complications that happen during the duration of your policy. If the insurer discovers misinformation on your application, it may deny the coverage. But if it’s a simple error, you can make them reconsider by correcting it as soon as possible.
If you get denied for any reason, you may have to:
- Contact your insurance company and request more detailed information to get something that can be corrected.
- If you are wrongfully denied, contact your attorney general. He will help appeal a claim.
- You can also contact a lawyer specializing in insurance law, appeals, and settlements.
The Bottom Line
Burial life insurance is a valuable asset for you and your loved ones, providing ease during an already difficult time. It is usually more accessible and easy to qualify for a policy than traditional life insurance, but some factors can lead to coverage denial. Therefore, it is essential to understand your insurer’s underwriting guidelines and explore some prepaid funeral plans.