A Final Expense Life Insurance policy is also called Burial Insurance. Typically, burial insurance caters to funeral ceremony costs or small medical bills, and credit card loans. Throughout this blog, we’d be using the term Burial Insurance in place for Final Expense Life Insurance Policy, to keep it as simple as possible.
First of all, it is important to understand the difference between burial insurance and life insurance.
Burial Insurance Vs Life Insurance
Burial insurance is widely different from Life Insurance in 4 different aspects:
| Aspect | Final Expense Life Insurance | Permanent Life Insurance |
| Least Coverage | $1000-$5000 can be up to $25,000 | $50,000-$100,000 |
| Payout timing | 24-48 hours after the claim is approved | Might take months |
| Eligibility | Given to patients with chronic diseases too | Only healthy people are eligible at the time of application |
| Medical Exam needed | No | Sometimes |
What are three different types of Burial Insurance?
Burial insurance generally comes in three forms, with, without, or with a partial waiting period. Let’s try to differentiate these 3 types:
1. Burial insurance with a waiting period
This is the type of final expense life insurance policy which will payout after 2 years after the death of its policyholder. While shopping for burial insurance, the policyholder deliberately chose this.
2. Burial insurance with no waiting period
This is best suited for the immediate funeral costs and needs of beneficiaries. As soon as the claim of beneficiaries is approved, the insurance agency cuts the check in the next 24-48 hours. The beneficiary gives the check to the funeral home and funeral ceremony arrangements are made immediately.
This burial insurance is also called “immediate payout burial insurance”. This provides the policyholder to get coverage from day one. This also enables him to get 100% coverage if he dies in a matter of a few months after buying this burial insurance policy. He would get his premium payments refunded and exempted from tax.
3. Burial insurance with a partial waiting period
Burial insurance with a partial waiting period is also called “graded period burial insurance”. The rules go like this during the first year after the policyholder passes, the beneficiaries will receive 35-40% of the payout. In the next year, they will get 50-75% of the death benefit payout.
In a monthly context,
Between 1st-12th month————–35-40% payout goes to beneficiaries
Between 13th-24th month————50-75% payout goes to beneficiaries
How can I find the best burial insurance policy for myself without any waiting period?
It all comes down to your research techniques, after all. The best approach is to go for an independent insurance broker-agent or agency instead of a captive one.
Where a captive agent or agency is bound by laws to reveal the multiple burial insurance policies and their features from only their own, or partner firms. An independent broker agent or firm will disclose and explain many burial insurance options from a wide array of companies. It is always better to choose from more available options and different insurance companies.
When you research with an independent broker agent or agency, you can choose the best suited final expense life insurance with no waiting period, for yourself.
Which are the best burial insurance companies?
A large number of insurance firms are offering burial insurance but the ones that let you apply and become eligible for immediate payout burial insurance despite your chronic medical conditions are:
- Mutual of Omaha
- Transamerica
- AIG Direct
- Aetna
These agencies have the most aggressive underwritings. And each agency offers burial insurance without any waiting period, to patients with a wide set of chronic illnesses. However, there are still some exceptions when it comes to being eligible for burial insurance with no waiting period.
Who can never become eligible for any burial insurance policy without a waiting period?
If any person is formally diagnosed with any of the following medical conditions, he can never opt for an immediate payout burial insurance. It’s nothing to worry about because they can choose a partial waiting period or 2 years waiting period burial insurance policy, suitable for them.
- AIDS or HIV
- Alzheimer’s or dementia
- Recommended to undergo an organ or bone marrow transplant
- Cancer within the last 12 months
- Circulatory surgery within the last 12 months
- presently in a hospital, nursing home, or skilled nursing facility
- Dialysis
- Stroke within the last 12 months
- Heart attack within the last 12 months
- Heart surgery within the last 12 months
- Hospice care
- Insulin shock, diabetes-related amputation, or diabetic coma in between the last 24 months
- Kidney disease from diabetes
- Oxygen to assist with breathing
- Terminal illness with lesser than 24 months of life expectancy
- In a wheelchair due to an illness or disease
What is a no-medical exam burial insurance policy?
As the name implies, it is a type of burial insurance/ final expense life insurance policy for which the applicant does not have to undergo any medical exam. He does not have to give his blood or urine samples either.
What is a no-health questions burial insurance policy?
Again, it is obvious that the burial insurance policy for which you do not have to answer any health questions or fill out any health questionnaire while applying. For no health questions burial insurance, anyone can apply. This burial insurance policy is classified as guaranteed acceptance life insurance with no waiting period. This is available for everyone.
A step-by-step process for getting a payout from burial insurance with no waiting period
Let’s suppose a policyholder died in an accident at the age of 83 years. Now let’s jot down the exact steps for receiving his burial insurance without waiting periods’ death benefit payout:
- Call the insurance agency.
- Make a claim for his burial insurance.
- Provide a copy of his death certificate.
- Send a picture of his corpse at home.
- Forward a beneficiary-signed copy of the Beneficiaries’ Statement.
- The claim gets approved.
- Within 24-48 hours of claim approval, the agency will sign his payout check.
- Only listed beneficiaries will go and receive the check from the insurance agency.
- Pay this check to the funeral home you want to use for the policyholder’s funeral.
- If any amount is saved from the check, after arranging the funeral ceremony, take it from the funeral home. This amount is exempted from tax.
- Pay out policyholders’ small credit card loans or pending post-hospitalization bills.