The cost for funeral services and other after-death expenses are undoubtedly high, giving much of a headache for the bereaved family.
This is why burial insurance or as it is sometimes referred to as final expense insurance has been attracting more buyers since most of us don’t want to leave our family with a lump sum of expenses.
However, burial plans and policies can be quite confusing, especially regarding the waiting period and their various types.
Therefore, this article will cover everything you need to know about burial policies, such as the types, waiting period, costs, and benefits.
Moreover, this article will focus more on Burial Policy with No Waiting Period and the necessary information that most burial insurance shoppers should know.
What is A Burial Policy?
As the name suggests, a burial policy is a kind of life insurance that covers funeral expenses and sometimes medical bills after death. Typically, these are smaller insurances that can cost around $2,000 up to $50,000, depending on the terms and features.
Additionally, burial insurance is easier to purchase than term or whole life policies because it does not require a medical exam. This is typical since most insurance companies see burial policies with reduced risk, unlike whole life insurance.
However, the shoppers of the burial policies are still asked about their health conditions, age, and vices like smoking.
As mentioned, burial insurance is offered in various types. Here are the common types of burial policies to know which one to get:
Types of Burial Insurance
As we all know, death is unpredictable. We can’t be sure of when, where, or how we’re going to leave. Somehow, life insurance policies make sense, especially if we don’t want to leave our family with hospital or funeral bills.
However, it’s hard to find the right burial insurance if you don’t know the features of the different types. So, here’s a simple guide about the two standard burial Plans:
Simplified Issue Policies
The simplified issue is typically offered without undergoing a medical exam, but there is a catch when applying for this type of burial policy. Usually, the insurer provides the buyers with a health questionnaire to identify if they are medically qualified for the insurance.
Therefore, in applying for Simplified Issue Burial Policy, there is a chance for you to be disqualified if you have severe and pre-existing medical conditions. For example, you have been diagnosed with heart disease or cancer– there is a high possibility for your application to be denied.
Moreover, if you’re residing in a nursing home or in a wheelchair, it will also be hard for you to get approved for the Simplified Issue Policy.
So, in this matter, Simplified Issue is called simplified since it does not need a medical examination, not because of the ease of application. In addition, this policy is ideal, mainly for those without severe medical conditions.
Guarantee Issue Life Plan
On the contrary, Guarantee Issue Life Insurance is the most convenient burial policy since, unlike Simplified, it does not require a medical exam or health questionnaire.
However, since this kind of policy offers more risk to the insurer, they offer it at a higher cost. Moreover, there are basic requirements that the applicants need to meet.
In applying for a Guaranteed Issue Burial Insurance, the applicants need to be meet the age requirement. Usually, the minimum age requirement is fifty years old and above, but it will still depend on the policy you will be applying. Moreover, there might be some exceptions to consider as well.
The next requirement for this type of burial plan is the residency of the applicant. Typically, if you’re availing of the policy in the US, you need to be a citizen or a permanent resident. You should also need to ensure that you reside in the State where you’re availing of the Guarantee Issue Policy.
If you meet all those requirements, your application for a burial policy will be seamless and convenient. However, like any other type of insurance, there is always a downside that you should consider before purchasing one.
Guarantee Issue Burial Policy usually includes clauses in their terms about a waiting period. It is called the Graded Death Benefit, which states that the insurer will not cover the individual’s expenses until the waiting period has passed.
Most Guarantee Issues include such clauses to lessen the insurer’s risk of paying for the death benefit even when the individual has been insured for just a day.
So, most probably, if an accident happens and you need the death benefit right away, your family needs to wait for at least two to three years before they can benefit from your guarantee issue life insurance.
Unfortunately, this is one of the common problems encountered by most insurance shoppers. They thought buying this kind of burial policy would get them insured immediately, only to realize that it’s not the case.
And this is why it’s also essential to be aware of the waiting periods of the burial policies. It will come in handy once you start shopping for the best burial policy for you.
What are the Burial Policy waiting Periods?
In most burial policies, like the guarantee issue, there is a required waiting period before the insurer releases the death cash to the insured individual’s family. You can find various burial policies with three different waiting periods.
Partial Waiting Period
In this plan, the insurer will provide partial coverage to the insured individual immediately after death. Typically, the claimant of the death benefit can have 30 to 40% of the total amount in the first 12 months.
Then, during 13 to 24 months, 60 to 70% will then be released. So, this means that the full coverage will still be guaranteed after waiting for 24 months or two years.
Burial Policy with Modified waiting period (Two-year waiting period)
This kind of burial policy is known to have a waiting period of two years or more, depending on the provider’s criteria. Unlike partial, the beneficiary will only have the opportunity to benefit from this insurance after waiting for 24 months after the insured individual’s death.
Although most of the time, some insurance companies offer an immediate return of premiums of up to 10%. However, it will depend on the burial policy that you’ll avail. So, to get the most out of it, be sure to check the waiting period of the insurance.
Burial Policy with No Waiting Period
Fortunately, there are also burial policies that include no waiting period or insurance that provides the full 100% coverage right away after the insured individual’s death. It might not be easy to find since there is more risk on this for insurers, but there are companies offering this kind of policy.
You’ll mostly find burial policies offering a two-year waiting period, but they wouldn’t want you to know that there is a thing such as a burial policy with no waiting period. So let’s learn more about this burial plan without graded death benefit.
Focusing on Burial Policy with No waiting period
The partial waiting period is understandable since it can be risky for most insurers, but it’s quite unfair with the 2-year waiting period. Most applicants surely want to have immediate funds after death to support their families with the final expenses.
So, it’s not reasonable to wait two years before they can get the death benefit where in fact, they might need it right away.
Luckily, there is this burial policy with no waiting period wherein the death benefit will be released immediately to the insured individual beneficiaries right away. Moreover, even if the individual only paid the policy for one day, they will still receive full coverage.
What’s the catch about a burial policy with no waiting period?
Obviously, offering this kind of burial policy also provides a high risk for the company, especially that they will give full coverage immediately.
They are prone to individuals who will apply for the insurance knowing that they will only have to live for a while, and then their family will be able to get the benefit even when the insured individual only paid once or twice for the plan.
It’s really not a good business proposition, so most companies require asking health questions to the applicants.
You don’t have to undergo a physical or medical examination in this kind of policy, but they need to ensure that you are not previously diagnosed with severe medical illness. They also verify your age and any vices that might affect your life expectancy. In simple terms, they need to make sure that you will not die early.
Benefits of Burial Policy with No Waiting Period
With all the various waiting periods for a burial policy, there is no doubt that no waiting period is the best option. Moreover, it offers benefits that you can’t get from other types. Here are some of the best features of a burial policy with no waiting period:
100% Full Coverage from Day 1
When you apply for a burial policy with no waiting period, you are fully insured starting from the first day you’ve paid them for the policy.
If an accident happens right after you buy the insurance, your beneficiary will get the 100% of the death cash immediately. Your family doesn’t have to wait for two years to get the money for the funeral.
No Medical Exam
Well, almost all burial policies don’t require a medical exam, but it’s still worth mentioning, especially that getting a medical exam is not easy, and it can cost a lot.
So, it’s one of the advantages of not just the burial policy with no waiting period but in the case of all the burial policies compared to whole life insurance and term insurance.
Seniors can Apply
Typically, age is also another factor that most insurers consider when they check for the qualifications of the applicants of their burial policy.
But in a burial policy with no waiting period, most companies still consider senior applicants as long as they don’t have severe illness or are not on the death bed. Since they need to also protect their business from the risk.
As to the guarantee of having insurance, the burial policy with no waiting period is the best option with that feature. Since as mentioned, the individual will be guaranteed full coverage even when he only paid for the plan once and left the world.
Cons of Burial Policy with No Waiting Period
Everything has its other side of the coin. Even this burial plan with no waiting period has its own downside.
This kind of burial policy offers excellent benefits for the consumers, but it’s different on the side of the insurance provider. They are putting their business on the line when they offer these particular funeral plans. It imposes a high risk for them.
So, the only way they can mitigate the risk is to provide the policy at a higher price than those with waiting periods. As a result, most shoppers would still buy other plans since they are more affordable, which is a tricky tactic for most insurance providers.
So, in the case of the consumers, they need to realize the great features of the no-waiting period policy to get the best insurance policy.
Not for Everyone
Well, the fact that there most providers require the applicants to answer health questions, they obviously just pick the qualified ones.
When we say qualified, they are the individuals without a history of severe illness or, in short, those deemed to still live for a long time. So, obviously, this kind of policy is not for everyone.
Additionally, this kind of no-waiting policy has plenty of fake offers lurking on the internet. Most of the time, some providers will claim to have a no waiting period policy, but the truth is, there is a waiting period of two years.
So, it’s essential to be vigilant in finding burial insurance and avoid these fake offers. As much as possible, research the company first and check the terms of the policy before purchasing it.
It would also be helpful to seek assistance from your family members if you are a senior because most frauds target those they think are vulnerable.
What are the Instances that You can’t Avail No Waiting Period Policy?
As mentioned, one of the downsides of a burial policy with no waiting period is the fact that it’s not for everyone. There might be instances that the applicants will have no choice but to avail the two-year waiting period burial plan.
Usually, individuals with serious health conditions will have a hard time looking for companies that offer them immediate coverage. If you have the following health issues, you might not be eligible for a burial policy with no waiting period:
- If you are given 24 months or less of life expectancy because of a terminal illness like cancer or other diseases.
- If you’re a patient with HIV or AIDS.
- If you had or will have an organ transplant.
- If you’re under dialysis.
- You are also not eligible if you are currently in a nursing home or hospital.
- If you’ve been diagnosed of having dementia or Alzheimer’s disease.
- In the last 12 months, you had a stroke, heart attack, and heart or circulatory surgery.
Therefore, if you have or have had one of the above-mentioned health conditions, the possibility for you to get a burial policy with no waiting period is less. But it doesn’t mean that you can’t have a burial plan because you can always choose to have other types of insurance.
What’s the Possible Option if You can’t Avail the Burial Policy with No Waiting Period
If your health condition is not as serious as the above-mentioned, there is still a chance for you to get the next possible option to a no-waiting burial policy, which is the one with a partial waiting period.
In this plan, you’ll have immediate partial coverage if something happens to you. Then, your beneficiary will get half of the total amount after 24 months, which is suitable.
On the other hand, you can explore other life insurance. Continue reading to know the best alternative for burial policies.
Best Alternatives for Burial Insurance
Finding a suitable burial plan can be challenging, especially if you have issues regarding your health. It can be hard for your application to be approved by most insurance providers. Fortunately, there are other best alternatives for burial insurance.
- Whole Life Insurance
Whole life insurance is one of the common life plans because of its long-time coverage and great features. This means that your insurance is guaranteed for the rest of your life and will even cover final expenses such as the burial.
One of the advantages of whole life insurance is because it builds cash values that you can withdraw its cash value in the form of a loan. Moreover, like burial policies, it does not require a medical exam, but it requires you to answer a questionnaire about your health conditions.
However, unlike in burial policies, there is still a chance for you to qualify despite your health issues depending on the provider’s offer.
But in terms of cons, whole life insurance is known to be more expensive than any other insurances because it’s a lifetime plan. Moreover, there is also a chance to have a smaller death benefit since the provider will have to subtract your unpaid policy loans, if you have any, to the death benefit.
- Funeral or Pre-need Insurance
Another alternative for a burial policy is funeral insurance, it might sound the same, but there is a big difference between the two. In pre-need insurance, the beneficiary is funeral homes wherein the death benefit will be dedicated to a particular funeral home service.
In terms of the payment methods of this kind of plan, it’s paid in a fixed duration, usually in installment form.
Compared to other insurance, the application process is much easier. However, it has plenty of downsides that you should also consider.
One disadvantage of this funeral plan is it does not guarantee a return of premiums-furthermore, it’s not flexible since you can’t make changes to your insurance easily.
How to Choose the Best Burial Insurance
Now that you know the types and features of various burial policies, it’s time to know the best practice in choosing the best burial plan. It might be challenging to find credible and reliable burial insurance, but you can check some of these steps to make it easier.
Assess Your Needs and Budget
The first essential thing to find the best burial plan is to assess your needs and budget.
It would be helpful if you asked a few questions like, “How much is my allocated money for the insurance?” and ” Do I need to find long-term insurance or what?”. Asking questions like this will make it easier for you to choose suitable insurance.
Moreover, you should assess your health condition first because, as we previously talked about, most insurance providers ask health questions to ensure your eligibility.
Check for the Waiting Period
Then, the next thing that you should look for is the waiting period or if it has graded death benefit. Finally, you should be check if the policy offers immediate full coverage, partial or if your beneficiary needs to wait for at least two years.
However, it’s essential to consider here if you have a serious illness because you might have a hard time looking for a burial policy that can accept your application.
Research the Company
If you received a quotation from a company about burial policies, one way to confirm their credibility is by researching about them. Check for the products they offer and their background information to verify if they are legit.
Moreover, you should also check how long the company has been providing insurance because if they have been in the industry for long, there is a big chance of them being legit. It can also prove that they are experienced enough to cater to their consumer’s needs.
Check for Reviews and Ask for Opinions
Another essential thing to do to check if the provider is trustworthy is browsing through their previous customers’ reviews. You can usually find them online, but you can also ask friends and relatives about their opinions about the company and the burial policy you will purchase. On the other hand, you can just ask for suggestions from them about which is the best burial insurance.
Read the Quotes Thoroughly
It’s also essential to be very thorough when reading the quotes from insurance companies and see that you read every section. It will be beneficial for you to know all the burial insurance’s inclusion, terms, and policies. Moreover, it will also prevent you from missing some clauses, like a long waiting period or additional charges.
Check for the Process of Application
Furthermore, finding out about the process of application can also make your burial policy shopping more convenient. Choose the insurance that does not require much work, like undergoing a medical exam.
However, you should also consider if the insurance provider accepts applicants with medical conditions.
Check for the Payment Options
Another thing that you need to check is how you should pay the insurance, it is annually, monthly, or what? Again, this will depend on the insurance provider you choose, so it will be helpful to really check the provider and their products offered.
To have a guide for this, here are the three common payment options for most insurance:
- Fixed Period – In this kind of payment method, usually, the individual will have to pay a higher amount of premiums throughout a fixed period, for example, 10 to 20 years.
Afterward, the burial policy will be locked in permanently by the insurer. It’s the typical option for most individuals with extra income to pay for the premiums.
- Periodically – You can also choose to pay for the insurance regularly, either per year or per month, depending on the burial policy.
- Lump-Sum payment – In lump-sum payment, you will have to pay the insurance in one single amount.
Collect Quotes and Compare Prices
This might be a lot of work, but collecting quotes and comparing them can really help you choose the right burial policy. In addition, it will make your shopping more convenient since you will just need to pick the one that suits your needs and preference.
Look for Experienced Agent
We understand that collecting quotes and comparing providers is not for everyone. So, we suggest that you resort to hiring an experienced agent who can guide and explain the choices you have.
It will be great if you choose someone who’s reputable and known for his job to ensure a quality service. Moreover, hiring an agent is also ideal for those with a bit of knowledge about insurance.