Burial insurance, also known as final expense insurance, is like a miniature life insurance policy. Burial insurance is a small policy meant to cover costs associated with end-of-life, like funerals. Private insurance companies offer many different policies that differ on their coverage level, price, and whether they require a waiting period. Read more about how a waiting period could affect your loved ones who receive your policy.
How a Burial Insurance Policy Works
A burial insurance policy works like many other types of policies:
- You find an agent who helps you choose a plan and company that fits your needs
- You pay a monthly premium, and
- The policy covers you when you need it.
In the case of burial insurance, the policy covers costs your loved ones incur when you pass away, like funerals or medical debt.
What a Waiting Period Is
Whether or not the policy you choose has a waiting period can make or break whether your loved ones get the financial help they need. A waiting period is usually a two-year window after you buy the policy in which you cannot accept the death benefit if you expire within that time. In other words, if you purchase the plan and then pass away within two years, the company will not pay your loved ones the death benefit.
Which Policies Require a Waiting Period
There are different types of final expense plans. The four types of plans are level, graded, modified, and guaranteed issue. Each plan is slightly different from the other. For example, level plans cost the least, so only the most healthy people are eligible. In contrast, guaranteed issue plans are costly and tailored towards people with more severe problems. In general, the higher risk you are, the more expensive the plan. In addition, riskier candidates are also required to have a waiting period. Take a look below to see which kind of plan is best suited to your needs and whether that plan type has a waiting period.
- Level
- Applicant Health: Excellent
- When You Are Eligible for Benefits: Immediately after death
- Cost of Plan: Low
- Graded
- Applicant Health: Minor Health Problems
- When You Are Eligible for Benefits: 2-year waiting period
- Cost of Plan: Medium
- Modified
- Applicant Health: Serious Health Problems
- When You Are Eligible for Benefits: 2-year waiting period
- Cost of Plan: High
- Guaranteed Issue
- Applicant Health: Non-specific, but generally the most serious problems
- When You Are Eligible for Benefits: 2-year waiting period
- Cost of Plan: Very High
This is a general guideline. Since each company and plan is slightly unique, you’ll want to check with your agent to understand the complexities of each plan and whether they require a waiting period.
Contact Senior Life Services!
To learn more about your final expense insurance options, waiting periods, and many more details, contact us at Senior Life Services.
