As a smoker, you may have a harder time finding affordable insurance compared to someone who doesn’t smoke. However, burial insurance (also known as funeral insurance and final expense insurance) is an affordable option for smokers and non-smokers alike. The application process is fast and simple, and you are guaranteed to find a policy that helps provide for your loved ones. Here, you will see that while smoking is a red flag in the eyes of insurance carriers, it’s not something that will keep you from getting insured. No matter the circumstance, there are actions you can take to find affordable burial insurance as a smoker.
What Makes Burial Insurance A Better Option Than Other Forms Of Life Insurance?
Burial insurance gives policyholders the assurance of lifelong coverage at a cost similar to that of a term life policy. This is possible due to a smaller death benefit compared to other life insurance policies. While others issue death benefits past $100,000, burial insurance has death benefits that range from $2,000 to $50,000. The policy size you can get depends on factors such as your insurability and the company you purchase your policy from. This may not be life-changing, but it’s substantial enough for your loved ones to have significant financial relief.
These policies are often purchased with the intent of covering funeral expenses, which can be anywhere between $7,000 and $12,000. Funeral costs can vary due to the type of funeral arrangements, the funeral home providing the service, type of casket chosen, and whether the individual chooses burial or cremation. However, the death benefit can be used for anything – it can go toward personal debts such as student loans and medical bills, or it can be used to fund vacations and other leisure activities. Some sign up for burial insurance policies because burial insurance can serve as collateral when taking out loans. And another quality is that the death benefit is tax-free, so you won’t have to worry about your loved ones suffering from stress when tax season comes.
Burial insurance is also easier to qualify for. This is partly due to the death benefit being so low compared to other options. It’s non-discriminatory, and there are no medical exams during the application process. However, you may have to answer medical questions, and less than favorable responses can lead to you having to pay higher premiums. Since smoking is a question that arises on every medical questionnaire, you face higher premiums than you would if you were a non-smoker.
Also, burial insurance is ideal if you’re looking to get a policy on short notice. The fact that it doesn’t have a medical exam automatically eliminates several weeks from the application process, as you won’t need to make an appointment at a doctor’s office. And you can do this from your own home, saving you time and gas mileage.
Why Does Smoking Make Burial Insurance More Expensive?
Any hobby or lifestyle choice that potentially shortens an individual’s lifespan is cause for an insurance company to issue higher premiums. Tobacco use is linked to various types of cancers, and will more often than not lead to an early death.
To an insurance company, a shorter lifespan is less time spent paying premiums. Insurance companies are operating a business, and use premiums to pay employees, as well as allowing them to disburse large sums of money while still remaining profitable. Companies are more comfortable issuing policies to younger, healthier individuals because those individuals will more than likely pay premiums long enough for the company to issue a death benefit without being at a loss.
But risk does not always lead to rejection. Companies take the extent of risk into account. Tobacco use in itself is not a chronic condition or terminal illness, and while it typically leads to a shorter lifespan, it is still possible for a smoker to live beyond the average life expectancy. Still, the company will assign higher premiums to compensate for this insurance risk.
Another factor to take into consideration is that companies don’t care about how often you smoke. Most of the time, they’ll simply ask if you’ve smoked at any point within the past year. Being a smoker is not a label that will be attached to you for the rest of your life. So, one highly effective method for getting lower burial insurance rates as a smoker is to withhold tobacco use for 12 months. After this point, you can declare yourself as a non-smoker and pay the same premiums that you would if you had never smoked in your life. It may seem counterintuitive, but one year of age difference will not have the same negative impact as waiting five or 10 years. Abstaining from smoking may be difficult, but this option poses less of a challenge to those who only smoke on occasion.
When Is Smoking The Most Detrimental When Looking For Burial Insurance Policies?
Smoking isn’t going to be a major hurdle if it is the only risk factor you have. For example, a male smoker at the age of 50 who is in otherwise good health can expect to pay as little as $36.89 per month for a $10,000 policy. This is a minimal financial sacrifice, as it equates to slightly over $1 per day over a given month. A female smoker of the same age and condition can find a $10,000 policy for $28.14 per month.
However, smoking combined with any other risk factor causes an exponential increase in rates. Other risk factors include age and serious health conditions.
Age’s impact on smokers’ premiums can be seen in Gerber Life’s sample rates for a $10,000 policy for smokers of different ages and genders.
Gerber’s monthly rates for male smokers of different ages:
- 50 – $38.41
- 60 – $56.65
- 70 – $87.91
- 80 – $220.92
Gerber’s monthly rates for female smokers of different ages:
- 50 – $28.14
- 60 – $46.48
- 70 – $68.75
- 80 – $152.17
Age alone results in a substantial price increase, especially when individuals get closer to reaching their life expectancies. Those go back to companies issuing premium amounts to account for the limited time that high-risk policyholders will be able to pay in premiums. For a male smoker, for example, waiting 30 years to sign up can result in a fivefold premium increase – or an additional $2,190.12 per year.
But it is possible for one company to offer a lower rate at a certain age than another, despite having comparatively higher rates at younger ages. This is exemplified by Mutual of Omaha, and its rates for a $10,000 policy for male and female smokers.
Mutual of Omaha’s monthly rates for male smokers of different ages:
- 50 – $36.89
- 60 – $59.02
- 70 – $106.76
- 80 – $193.47
Mutual of Omaha’s monthly rates for female smokers of different ages:
- 50 – $31.43
- 60 – $44.67
- 70 – $73.68
- 80 – $134.74
In nearly every age category, Gerber Life is cheaper for smokers. But there are discrepancies that show that specific insurance providers are not a one-size-fits-all solution. For example, a 50-year-old female smoker would get a lower rate with Gerber Life, but female smokers of the ages 60 and 80 would actually pay less for a Mutual of Omaha policy.
It is also important to take into account that these are sample rates for the current year and that this is only comparing two companies. When the time comes for you to look for a burial insurance policy, you could be drawing comparisons between countless insurance companies. Burial insurance is one policy with tens, if not hundreds, of unique monthly premium rates depending on the insurer you choose.
Terminal illnesses can be even more prohibitive, because in some instances (e.g. renal failure), your application may be outright rejected. This is especially the case if you carry multiple risk factors where dying within two years bears a strong likelihood. But that’s if that particular policy requires you to disclose medical information. There is an option for burial insurance where you won’t have to answer medical questions at all.
Should I Get Simplified Or Guaranteed Issue Burial Insurance?
This can be the difference as to whether simplified or guaranteed issue is the better option for you.
If you’re a smoker but are relatively young without health problems, simplified issue is the better route. Simplified issue policies have lower premiums and offer higher death benefits, while also allowing you to forgo a waiting period for your coverage to go into effect. All that’s required of you is to answer a medical questionnaire, which mostly consists of yes-or-no questions. It is important to be as transparent as possible during this process because your insurer will also look into medications prescribed to you. If your prescriptions indicate you have a condition that you claimed not to have, you can be denied a policy due to dishonesty.
If you are in dire health circumstances where rejection or prohibitive costs are a possibility, guaranteed issue is the best choice in your situation. A guaranteed issue policy does not have a medical underwriting process at all, but there are slight disadvantages to consider. These policies come with more expensive premiums, and you may have a two-year waiting period before your policy becomes effective. If you pass away during the waiting period, your loved ones will not get the death benefit. However, there are some policies with waiting periods that have graded death benefits, where they pay a percentage of the death benefit if you happen to pass away prior to the coverage going into effect. For example, a graded benefit policy may issue 30% to 40% of the death benefit if you die within the first year, and 70% to 80% of the death benefit if you die in the second year. If you have no other option than to get a policy with a waiting period, a graded benefit is your best choice.
How Can I Get The Best Rates With Senior Life Services?
Aside from abstaining from smoking and making healthier lifestyle choices, you do not have control over your insurability risk. Your age, family medical history, and (to a certain extent) your health conditions are outside of your control. All of these factors combined can serve as an obstacle to getting accurate quotes from life insurance companies in your area.
Thankfully, there are companies specializing in finding quotes from multiple insurance providers so you don’t have to. Companies such as Senior Life Services take your personal details into account in order to help you find the most accurate quotes. When you use Senior Life Services, you spare yourself hours of research involving long phone calls and numerous online searches.
Senior Life Services has contracts with more than 15 different insurance companies and holds an A+ Better Business Bureau rating. You won’t be subjected to long holding times over the phone, and you will get answers right away. These are trained professionals with years of experience, and they know the ins and outs of life insurance.
In the end, you will find that you will get the most affordable burial insurance coverage a smoker can get. And it’s not just smoking – it can be any health problem that can make the search for insurance difficult.
Get Affordable Coverage
At Senior Life Services, we see you as an individual, with unique wants and needs. We will work with you to help you obtain the burial insurance policy that will be the most affordable for you, while also ensuring that your loved ones will be taken care of when the time comes. We believe that everyone ought to have the chance to provide a legacy, get their voices heard, and their final needs met. Call us today at 800-548-3249.