A cancer diagnosis is difficult for anyone. While many cancers are extremely treatable with good odds of making a complete recovery, a cancer diagnosis often forces us to ponder our own mortality. You may worry about your loved ones and what will happen to them should you pass away from cancer or any other disease.
Funeral costs in the US are higher than ever before. Depending on where you live, your family may spend as much as $8,000 or more on a burial with a simple viewing and ceremony. While a cancer diagnosis may limit your insurance options, the good news is that cancer survivors are eligible for burial insurance. You can find a burial insurance policy whether or not you've been recently diagnosed, are currently in treatment, or are in remission.
Introduction to Burial Insurance
Burial/final expense/funeral insurance, is a type of insurance policy designed to cover the costs of a person's funeral. It is typically purchased to provide financial assistance to loved ones or beneficiaries upon the insured person's death.
Burial insurance can reduce the financial burden of funeral and burial expenses, like funeral home services, casket or urn expenses, burial plots, headstones or markers, transportation, memorial service, and other related costs. By having burial insurance in place, individuals can ensure that their final expenses are covered, easing the financial strain on their family members.
Burial insurance policies are generally lower than traditional life insurance policies. The coverage amount can range from a few thousand dollars up to around $30,000, depending on the insurer and policy terms.
One important aspect of burial insurance is that it doesn't require a medical exam for approval, which makes it accessible for people with pre-existing health conditions or a history of serious diseases, including cancer.
Best Life Insurance Options For Cancer Survivors/Sufferers
Your burial insurance options may be limited depending on a few key factors, including when you were first diagnosed, which medications you take or have taken, and when you last received treatment for your cancer (e.g., radiation, surgery, chemotherapy, hormone treatments), or how long you've been in remission. Let's take a look.
Immediate Benefit Plan
A level benefit or immediate benefit plan, is a type of life insurance policy that offers a fixed death benefit amount that remains constant throughout the duration of the policy. This means that regardless of when the insured person passes away, the beneficiaries will receive the full predetermined death benefit.
In an Immediate Benefit Plan, the coverage amount is determined at the time of policy issuance and remains unchanged over the life of the policy. This type of plan is often used to provide financial protection to families for various purposes, such as funeral or cremation costs and other financial needs, such as medical bills and loss of income.
One of the key features of an Immediate Benefit Plan is that it does not require a medical examination during the underwriting process. However, some health questions will be asked to help the insurance company assess the applicant's health status and determine the premium rates based on the individual's medical profile. Since the death benefit remains level, the premiums for this type of policy remain fixed throughout the policy term, making it easier to plan for and budget.
It's important to note that Immediate Benefit Plans are different from policies with graded death benefits or policies with limited death benefits during the initial years (often found in certain types of life insurance for individuals with pre-existing health conditions). In an Immediate Benefit Plan, the full death benefit is available immediately upon the policy's effective date.
A level death benefit plan is a good option if you've been cancer-free for two years or received your last cancer treatment over two years ago because most insurance companies have a two-year lookback period on cancer. It's generally cheaper than a guaranteed issue life insurance plan. It's one of the best life insurance options for recovering cancer patients.
Unfortunately, the majority of traditional life insurance plans will not cover cancer patients, which is why an Immediate Benefit Final Expense Plan is so beneficial to seniors who are looking to protect their loved ones from the financial burden of end-of-life expenses.
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Guaranteed Issue Life Insurance Plan
A Guaranteed Issue life insurance plan is a type of life insurance policy that is designed to provide coverage for final expenses, such as funeral and burial costs. What sets it apart from other types of life insurance is that it guarantees acceptance to applicants, regardless of their health or medical history. Unlike a traditional life insurance policy, there's no medical exam required. This means that even individuals with pre-existing health conditions or those who have been denied coverage in the past can still qualify for a Guaranteed Issue life insurance plan.
Unlike traditional life insurance policies, Guaranteed Issue life insurance plans do not require a medical examination or ask health-related questions during the application process. This feature ensures that individuals with health issues or higher-risk profiles can still obtain coverage.
As the name implies, these plans come with guaranteed acceptance. As long as you meet the age requirements (usually between 50 and 85 years old, depending on the life insurance company), you will be approved for coverage without consideration of your health status.
There is a downside, though. Guaranteed Issue life insurance plans typically offer lower coverage amounts compared to other types of life insurance policies. The coverage amount generally ranges from a few thousand dollars up to around $25,000, depending on the insurance company and policy terms. Most Guaranteed Issue life insurance plans have a graded death benefit provision. This means that if the insured person dies within the first few years (usually the first two years) of purchasing the policy, the beneficiaries may receive a limited death benefit or a refund of premiums paid instead of the full coverage amount. After the graded period, the full death benefit is payable.
Since Guaranteed Issue life insurance does not consider health factors, the premiums are generally higher compared to other types of life insurance policies. This is because the life insurance company takes on a higher level of risk by accepting individuals without
assessing their health conditions.
Still, a Guaranteed Issue life insurance plan may be the best option if you currently have cancer (except basal cell and squamous cell carcinoma) because very few (if any) life insurance companies will be willing to give you immediate coverage. However, you'll be approved for guaranteed burial insurance, regardless of your medical situation.
It’s a little more expensive than a burial insurance plan with first day coverage, but you don’t have to worry about being rejected just because you're going through treatment.
Yes, the waiting period may be a concern, but if your prognosis is good and you pass the two-year graded period mark, your beneficiaries will receive the full benefit of your life insurance policy. We can also recommend this insurance for cancer patients with limited options as well as older patients with a family history of dread diseases or difficulties in getting their life insurance application approved.
Less Than Optimal Life Insurance For Cancer Patients?
Some companies make lofty promises when it comes to selling life insurance for cancer patients. Some of these policies sound good, but even if you feel overwhelmed following a cancer diagnosis, you should take the time to investigate the options. Here are a few red flags and policies to avoid:
Term life insurance coverage
Term life insurance refers to a life insurance policy that provides coverage for a specified term or period. It offers protection for a predetermined number of years, typically ranging from 5 to 20 or 30 years, although some policies may offer shorter or longer terms. If the insured person passes away during the term of the policy, a death benefit is paid out to the beneficiaries named in the policy. But unlike final expense or burial insurance, term life insurance does not accumulate cash value over time. It is purely designed to provide a death benefit if the insured person passes away during the term. If the policy expires and the insured person is still alive, there is no payout or return of premiums paid. Some term policies have premium increases after a certain period. It is highly unlikely that a cancer patient would qualify for this type of insurance.
Pre-paid funeral plans
While pre-paid funeral plans can offer peace of mind by covering funeral expenses in advance, they can be expensive and might not provide sufficient coverage for other financial needs. Then there is a possibility that the funeral home you choose goes out of business, which could result in the loss of any prepaid funds without a refund. Most prepaid funeral plans have limitations and lack flexibility when it comes to options and transferring plans. If you have a change of heart regarding any aspect of your funeral plan, you might not be able to modify the arrangements you made when you took out the policy. Purchasing a prepaid funeral plan can be costly and completely redundant if your life insurance policy or burial insurance provides death benefits for your designated beneficiary, so consider it carefully.
Universal life insurance tied with stocks
Universal life insurance policies often come with a cash value component that can be invested in stocks or other investment vehicles. While these policies may offer the potential for growth, they also carry the risk of investment losses. Cancer patients should really think about their risk tolerance and consider whether such policies are suitable for their financial situation. This type of policy needs to be purchased prior to being diagnosed with cancer; once diagnosed, you will not qualify for this plan.
Plans offering "teaser rates" or extremely low premiums
Plans that advertise very low premiums, such as "$9.95 per unit" may seem attractive, but they often have limitations, exclusions, or hidden costs. Cancer patients should carefully read the fine print and consider the overall value and coverage offered. You might not get as much coverage as you think, and there might be policies that offer a lot more for a lot less.
At Final Expense Direct, our professional agents can help you assess each policy-type and ensure that you’re getting the best policy for your specific needs and budget.
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Overpriced plans or insurance from TV adverts
Cancer patients should be cautious about insurance plans that seem overpriced or those marketed heavily through television advertisements or unsolicited mail. There's usually a reason why those life insurance companies are using those guerilla tactics. It's important to research and compare multiple insurance providers to ensure competitive pricing and adequate coverage.
Click here to use our quoter tool to see exactly which plans you may qualify for and the rates. We work with all of the top companies and can help you find the very best plan available to you.
What You Should Look For When Buying Final Expense Insurance
So, what should you look for when you're shopping for final expense insurance? Here's what we look for when we're looking at companies that offer insurance for cancer patients:
1st Day Coverage: Make sure that the policy provides immediate coverage from the first day of the policy's effectiveness. This means that the full death benefit will be payable upon the insured person's passing without any waiting periods or limitations.
Rates That Never Increase: Look for a policy with guaranteed level premiums that remain fixed throughout the duration of the policy. This ensures that the premium amount will not increase over time, making it easier to plan ahead.
Coverage Never Decreases: Choose a policy that guarantees the death benefit amount will remain constant and will not decrease over time so your family can cover final expenses and any other financial obligations after your passing.
Easy Approval Process: Seek policies that have a straightforward and hassle-free approval process. While some underwriting may be required, look for options that offer high acceptance rates, especially for individuals with pre-existing health conditions, a cancer diagnosis, or older age.
No Medical Exam: Consider policies that do not require a medical examination during the underwriting process. This can make it easier to get coverage, particularly if you have or are recovering from cancer.
Same-Day Approval: Look for policies that offer quick and efficient approval processes, with same-day approval whenever possible. This ensures that you can secure coverage promptly, providing peace of mind to you and your loved ones.
Fast Death Claim Payments: Verify that the insurance company has a reputation for timely and efficient death claim processing so that your beneficiaries will receive the death benefit promptly, helping them manage funeral expenses and other financial needs.
How Can I Get the Lowest Premium As a Cancer Patient?
If you are looking for a lower premium, the best approach is to apply for burial insurance with underwriting. Underwriting involves answering health questions, and companies offering burial insurance with underwriting generally provide the most competitive pricing and immediate coverage.
When it comes to cancer, which is considered a high-risk medical condition, nearly every life insurance company includes cancer-related questions in their health questionnaires.
Companies offering burial insurance for cancer as part of their underwriting process will allow you to bypass the medical exam. Instead, they assess your eligibility based on the following:
Your responses to the health questions on the application.
Your medical history
Your medication history
Your answers to the health questions play a significant role in determining your eligibility. Cancer-related questions typically have a two-year lookback period. Most insurance companies require a minimum of two years of complete remission before offering you the best burial insurance plan.
The health questionnaire commonly includes the following cancer-related questions:
Have you received a cancer diagnosis of any type within the past 24 months?
In the last two years, have you been diagnosed with cancer or received recommendations for radiation or chemotherapy?
Within the previous 24 months, have you been diagnosed with cancer or advised to undergo surgery?
If you answer "yes" to any of these questions, you won't qualify for a plan with first-day coverage. Instead, you will be offered a Graded or Guaranteed Issue life insurance policy which typically has a two-year waiting period.
In addition to health questions, insurance companies will assess your current health status by looking at your prescription history. Certain cancer medications taken within the last two years indicate ongoing treatment or previous cancer diagnosis, and most life insurance companies will immediately categorize you as a high-risk applicant. The medications can include drugs Bortezomib, Gemcitabine or Gemzar, Methotrexate, and others.
Again, if you take any of these medications you will likely qualify only for a Graded or Guaranteed Issue life insurance with a two-year waiting period.
It's entirely possible to find burial insurance for cancer patients that suits your needs, whether you are in recovery or still in treatment. But there are a lot of unscrupulous companies out there that may try to take advantage of your situation and make empty promises that won't benefit you or your family.
If you need help finding burial insurance, call us at 1-800-217-0014. We'll help you find a trustworthy company with a policy that's suitable for your needs and budget, no matter your age or medical situation.
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