Health issues are one of the most common sources of anxiety for people wanting to get life insurance. This is especially true for folks in the market for a burial insurance plan. Fortunately for consumers, the companies that offer burial insurance plans have wildly different underwriting guidelines. As an experienced, independent life insurance agent, I’ve spent countless hours studying these underwriting guidelines. In this blog post I will discuss common health conditions and show which companies would work best.
Before I dive into the details, I want to give a quick refresher on the three types of burial insurance plans.
- Immediate Coverage Plans – With this plan, your beneficiary will receive the full amount of the death benefit if you pass away immediately after the plan is put in force. As an example, assume you sign up for a plan with a $10,000 death benefit. If you start the plan on Monday and pass away on Tuesday, the insurance company will write a check for $10,000. The insurance company will check to make sure there were lies or ommissions on the application. But assuming both the agent and the insured were ethical when applying for insurance, the insurance company will pay the death claim.
- Graded Plans – With a graded plan, the insurance company will pay a portion of the death benefit if the insured passes away in the first two years after starting the policy. Here is how it works. Assume the plan has a $10,000 death benefit. If you pass away within the first year of starting the plan, the insurance company will pay a $3,000 death benefit. If you pass away in the second year, the insurance company will pay a $7,000 death benefit. If you pass away after two years, the insurance company pays the full $10,000 death benefit. The exact amount paid out within the first two years depends on the insurance company.
- Return of Premium Plans (ROP) – This type of plan is also referred to as a Modified Plan. With this type of plan, the insured’s beneficiaries will not receive a death benefit pay-out until the plan has been in force for two years. If the insured passes away within the first two years, the insurance company will return all premiums paid into the plan. Some insurance companies will pay an additional 10% interest on the premiums paid during the first two years. For return of premium plans, we always recommend choosing a company that does not ask any health questions.
Heart Attack – If you had a heart attack, stent implant or generally any heart or vascular surgery more than two years ago, then you can probably qualify for an immediate coverage plan. It will depend on the exact medications you have been prescribed. We recommend Prosperity Life for people who have had a history of heart issues and take multiple medications to control blood pressure. If you have been prescribed Nitroglycerine but don’t use and are doing well, then Sentinel Security Life can be a good option.
Cancer – If you have only had one occurrence of cancer and have been cancer free and treatment free for more than two years, you have multiple options. Royal Neighbors of America, Liberty Bankers Life and Prosperity Life are all good options. For breast cancer survivors, I like Sentinel Security Life if you have been cancer free for more than three years. The reason is that breast cancer survivors are often required to take preventive medications for years even though they are cancer free. Sentinel Security Life has very forgiving underwriting for these cases.
Diabetes – If you don’t have any complications from diabetes and don’t require the use of insulin, you will find a multitude of companies that offer day one coverage. If you require the use of insulin then I generally recommend Royal Neighbors if you are over the age of 65. Liberty Bankers Life, Prosperity Life and Mutual of Omaha are also goo options for insulin dependant diabetics. If you have health complications caused by diabetes then you can still get day one coverage but your options are more limited.
What do insurance companies consider complications from diabetes? The answer is neuropathy, retinopathy, nephropathy, history of diabetic coma and amputation due to diabetes. For diabetes associated pain, like neuropathy, Royal Neighbors of America or Trinity/Family Benefit are hands down your best options. Most all other companies will only offer a graded or modified plan. If you had a diabetic coma or amputation due to diabetes AND it has been more than 2 years since the complication, Prosperity Life is the best option.
COPD – If you have COPD and do not require the use of oxygen, Liberty Bankers Life is the best option for you. They are one of only a handful of carriers that will give you immediate coverage if you have COPD. The price is more expensive than other immediate coverage. However, it is usually less expensive than a graded or modified plan.
Asthma – Asthma is not an issue for most carriers. The only time it can be problematic is if you have been prescribed an inhaler that also has a steroid. If you use an everyday inhaler like Albuterol there are multiple companies to choose from. My personal favorites are Royal Neighbors of America, Trinity/Family Benefit and Mutal of Omaha.
Multiple Blood Pressure Medications – If you only take one or two medications for blood pressure then it’s not a problem with any company. If you take for or more medications to control your blood pressure then it really depends on the exact prescriptions. Depending on the medications I recommend Royal Neighbors of America or Prosperity Life.
Blood Thinners – If you use any blood thinners then my first choice is Royal Neighbors of America. They have the most lenient underwriting for this class of medication.
Trans-Ischemic Attack (TIA)/Mini-Stroke – Good news! if you have had a TIA or Mini-Stroke, you still qualify for the Royal Neighbors of America immediate coverage plan. They are the only company that will do this.
Water Pills/Edema – As long as you have not been diagnosed with congestive heart failure, you can still get an immediate coverage plan if you take a water pill like Furosemide. The best priced plan will depend on the other medications prescribed, but Prosperity, Liberty Bankers Life and Royal Neighbors will work best for these meds.
Oxygen Use – Sentinel Security life has a graded plan that works well for folks who require the use of bottled oxygen. Outside of Sentinel Security Life, all other companies will only offer a modified plan.
Tobacco Use – If you only use smokeless tobacco or the smoke the occasional pipe or cigar, then Prosperity Life will give you the non-smoker rate. If you smoke an occasional then Sentinel Security Life will also give you a non-smoker rate.