Your state of health has a significant impact on your life insurance cost.
The most common question people ask when seeking final expense insurance is “How much will it cost?” Before we can answer that question we need a starting point. We must determine the general class for which you will qualify, and your state of health is the most significant factor that determines your cost.
Final expense life insurance is broken down into three basic classes.
- LEVEL PREMIUM is the lowest insurance cost. It is reserved for people who don’t have health issues that the insurance companies deem as risky. This doesn’t mean you have to be perfectly healthy. Final expense insurance is more lenient than other forms of insurance, so just because you take a few prescription medications doesn’t mean you won’t qualify for level premium.
- GRADED PREMIUM is the next level. You may have a condition that forces you into this category and if so, you will pay a higher premium for this insurance. If you have a temporary condition that requires you to purchase a graded premium product, you may be able to get your class lowered when enough time has passed by having the company adjust your class or by getting a new policy with someone else. Expect to pay 30% to 50% more for a graded premium policy over a level benefit policy.
- GUARANTEED ISSUE policies are reserved for anyone who cannot qualify for the other two classes. As long as you are 85 years of age or younger, you can qualify for guaranteed issue, regardless of your health. Expect to pay 70% to as much as double more for guaranteed issue over a level benefit policy.
Now that you understand the three classes of insurance, let us look at the many health conditions and how they may impact your cost of insurance.
There is a lot of information below. If you prefer to skip all the reading and get a general idea of where you stand with your situation, Then take the Final Expense Health Quiz!
GUARANTEED ISSUE
The health section of any application for final expense begins with a series of what the industry calls “knockout questions.” If you answer “yes” to any of these questions you will most likely be required to purchase a guaranteed issue policy. This is not always the case, so if you have one of the following conditions it is best to check with an experienced agent for your specific situation.
Most guaranteed issue policies contain a two year blackout period. This means if you die within the first two years the death benefit is not paid, but instead the company will refund all premiums paid plus usually 10%. If you make it past two years, you are fully covered.
Conditions that may require you to purchase a guaranteed issue policy
ALS (Lou Gehrig’s Disease)
Alzheimer’s Disease
Autism, moderate to severe
Cancer (except Basil Cell or Squamous Skin Cancer)
Cerebral Palsy
Congestive Heart Failure
Cystic Fibrosis
Dementia
Diabetes Younger than Age 20 with Insulin
Downs Syndrome
HIV or AIDS
Huntington’s Disease
Leukemia
Mental Incapacity
Muscular Dystrophy
Sickle Cell Anemia
Additional situations that may require a guaranteed issue policy
Bedridden
Bone Marrow Transplant
Organ Transplant
Tissue Transplant
Been advised to have surgery, nursing home confinement or hospital confinement and chosen not to do so within 1 year
Life Expectancy of 24 Months or Less
Permanently Bound to a Wheelchair
Confined to Hospital, Long-Term Care facility, nursing home
Advised to have surgery or diagnostic testing and not yet completed
Require assistance with ADLs (feeding, bathing, dressing, transporting, etc.)
If you have experienced any of the following within the last 12 MONTHS you may be required to purchase a guaranteed issue policy.
Aneurysm
Angina
Hospitalized 2 or more times
Required to Use Oxygen Equipment
Stroke with Complications
Transient Ischemic Attack (TIA)
If you have experienced any of the following within the last 24 MONTHS you may be required to purchase a guaranteed issue policy.
Cancer (except Basil Cell or Squamous Skin Cancer)
Diabetic Coma
Insulin Shock
Leukemia
And finally, if you have been diagnosed with any of the following within the last 4 YEARS you may need a guaranteed issue policy.
Leukemia
Melanoma
GRADED PREMIUM
Graded premium policies are cheaper than guaranteed issue policies, but more expensive than level premium. Most companies will include some sort of blackout period for graded premium but it is not as restrictive as guaranteed issue.
If you die within the first two years, it may be common to see a 25% payout in the first year then 50% payout in the second year. Or it may be 50% in year one and 75% in year two. If you live past year two you are fully covered.
Conditions that may require you to purchase a graded premium policy
Multiple Sclerosis
Emphysema
Renal Failure Stages 4-5
Hepatitis B
Hepatitis C
If you have experienced any of the following within the last 12 MONTHS you may be required to purchase a graded premium policy.
Heart Surgery
Chronic Cough
Dialysis
Drug Abuse
Full Disability
Heart Attack
Sleep Apnea CPAP w/ Oxygen
Stroke with No Complications
Unexplained Fatique
Unexplained Gastrointestinal Bleeding
Unexplained Weight Loss Greater than 10 Lbs
Use an Inhaler for COPD or Other Lung Condition
If you have been diagnosed with any of the following within the last 24 MONTHS you may be required to purchase a graded premium policy.
Cardiomyopathy
Chronic Asthma
Chronic Bronchitis
Cirrhosis of the Liver
COPD
Coronary Artery Disease
Diabetes with Insulin
Kidney Disease
Liver Disease
Lung Disease
Neurological Disorder
Schizophrenia
Systemic Lupus Erythematosus (SLE)
Transient Ischemic Attack (TIA)
If you have experienced any of the following within the last 24 MONTHS you may be required to purchase a graded premium policy.
Alcohol Abuse
Aneurysm
Angina
Angioplasty
Circulatory Disorder
Circulatory Surgery
Coronary Artery Bypass Surgery
Diabetic Coma
Driving DUI Convicted More than Once
Driving Reckless More than once
Driving Reckless or 3+ Tickets
Drug Abuse
Epilepsy More than 6 seizures
Felony Conviction or Awaiting Trial for a Felony
Heart Attack
Heart Bypass Surgery
Hospitalized for Mental or Nervous Disorder
Irregular Heart Rhythm
Marijuana Usage
Stroke with No Complications
Transient Ischemic Attack (TIA)
Treated for Bipolar Disorder
Unlawful Drug Use or Prescription Drug Abuse
Valvular Heart Disease with surgical repair
If you have made it through this long list of items and none apply to you, then most likely you will qualify for a Level Benefit policy.
Take the Final Expense Health Quiz
If you would like to see how your health stacks up against insurance industry standards, complete the following short questionnaire. This will help you understand your insurance cost. It will take between 2 and 10 minutes to complete, depending on your answers. It can be completely anonymous if you choose. Click the START button below to begin.
The information above should help provide a better understanding of how your health can affect the price for different types of final expense insurance. Look for additional details in the many articles on this website, in addition to our trusted partners, or feel welcome to contact us for a personal review.