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Can you buy life insurance for someone who is dying?

If you or someone you know is terminally ill, to say you already have a lot to deal with is an understatement. Families in this situation not only have to cope with an impending emotional loss but potentially a financial one, as well. For the person who is terminally ill, often one of their biggest concerns is how their loved ones will be taken care of after they’re gone.

We’re often asked whether you can buy life insurance for someone who is dying. The answer to this question depends on a number of factors. 

Can you buy life insurance for terminally ill family members?

Generally speaking, it is possible to purchase life insurance for terminally ill people. To do this, you’ll need two things:

  1. A life insurance company that is willing to sell you a policy
  2. A signature from the person who is dying (if it is not yourself)

Whether or not a life insurance company will accept an applicant comes down to their insurability. Insurability typically refers to the applicant’s health status – if the person is healthy enough to receive coverage. Many times, pre-existing medical conditions, such as cancer, diabetes, and heart disease, make them less insurable. As a result, it can more difficult to obtain life insurance. 

Following this logic, you might be led to believe that life insurance companies wouldn’t issue any sort of policy to someone who is terminally ill. Sadly, options are very limited for someone who is terminal, as insurance companies don’t want to take on the risk of paying out a death benefit so soon after agreeing to provide coverage. There are options, however. 

Life Insurance Options for Terminally Ill Patients

Traditional life insurance products such as term or whole life are not an option for terminally ill patients; however, guaranteed issue life insurance policies are a viable option.

What is guaranteed issue life insurance?

Guaranteed issue, also known as “final expense” or “burial life insurance,” is a type of permanent policy. Unlike a term life policy, guaranteed issue policies don’t expire. 

The biggest advantage of a guaranteed issue life insurance policy is that it doesn’t require any medical exams or screenings (though you may have to fill out a health questionnaire). In general, guaranteed issue applicants are automatically approved for coverage no matter their age or health status.  

Because of the risk these policies take on, the premiums are higher than other types of life insurance and the death benefits are generally limited to a maximum of $25,000 to $50,000 (depending on the provider). It’s also important to note that there is usually a two to three-year waiting period. If the insured passes away within the specified number of years after purchasing the policy, their beneficiaries will only receive a refund of the premiums paid to date or some percentage of the death benefit.

Strategies for Obtaining the Best Life Insurance Coverage

It’s not too late to get life insurance for yourself or someone you love even if you’re dying. Finding life insurance for the terminally ill is difficult, but it can be done. Although traditional life insurance will most likely be out of the question, guaranteed issue life insurance is a viable option. 

When shopping around for a guaranteed issue life insurance policy, it’s important to compare the policies’ death benefits, premiums, and waiting periods. Because there are a lot of factors to consider, it can be helpful to speak with a licensed life insurance broker before making any final decisions. If you’d like assistance navigating the life insurance landscape or would like to discuss your options with a professional, the team of life insurance advisors at Principled Life would be happy to help. Give us a call today and we’ll help you find the best life insurance policy for you. 

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