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About 6 million people here in the United States live with bipolar disorder or manic depression. If you have bipolar disorder, you probably think that you can’t obtain burial insurance. That is simply not true. Sure, there might be life insurance carriers that decline you, but there others that won’t. You just need to know where to look. In this article, we discuss affordable burial insurance for people with bipolar disorder. We first discuss burial insurance underwriting, how it is different than traditional underwriting, and then discuss your options for burial insurance if you have bipolar disorder.
Burial Insurance Underwriting
If you did not know, burial insurance is whole life insurance with a relatively small face amount up to $25,000 or $50,000. It is designed to help pay for your funeral and burial expenses. Additionally, you can leave some money to loved ones, if you wish.
Before we get into burial insurance for people with bipolar disorder or manic depression, let’s talk about underwriting. Underwriting for burial insurance is much different than that for traditional term life insurance, IUL, and even larger face amounts of whole life insurance. These types of underwriting are going to want to know the severity of your bipolar disorder. They will want to know your medical history. They will certainly want to review your doctor’s records for the severity of the disorder, if there have been any suicide attempts, etc. Likely, you will have to undergo a paramedical exam as well. Also, carriers want to know if you have any other underlying health issues. (If you have bipolar disorder and need term life insurance, whole life, or an IUL, contact us, and we will discuss the steps and process with you.)
However, with burial insurance for bipolar disorder, underwriting is different. The carrier doesn’t care about all of that stuff. They don’t want you to go through a medical exam or request your doctor’s records. The health questions are all “yes or no”. They just want to know if you have bipolar disorder or not.
That’s right. No blood test, urine sample, etc., etc…Just a simple “yes” or “no”.
Additionally, if a carrier doesn’t ask about a specific health condition on the application, the carrier likely disregards it. This includes bipolar disorder.
Burial Insurance Underwriting Health Questions Related To Bipolar Disorder
As we discussed, a typical burial insurance application asks you “yes or no” questions. Questions related to bipolar disorder are structured like this. These are some actual questions from 3 different burial insurance applications:
In the past four years, has the proposed insured: (a) received care or treatment for or (b) been advised by a physician or health care provider to seek treatment for: bipolar depression
Have you ever been diagnosed by a member of the medical profession, treated or taken medication for: bipolar disorder
In the past 2 years, have you been diagnosed or treated for, or are you currently under treatment for: Schizophrenia or Bipolar Disorder?
This brings us to a couple of points. As you can see, the burial insurance application is simply yes or no answers. However, if you have another health condition, such as diabetes, that condition might preclude you from your optimal burial insurance choice. Carriers look at ALL of your health conditions combined. Sure, burial insurance is still available, but the chance that a carrier will cover bipolar disorder AND diabetes at an optimal monthly premium is low.
Moreover, other situations could lead to an application decline. For example, needing assistance with daily living tasks is one situation.
Not to worry, though, because we have other affordable options. We discuss those later.
Here’s the kicker, though. Many carriers don’t even ask about bipolar disorder on their application. So, who is the one we would recommend to you? That’s right. The one that doesn’t ask the question!
More On Burial Insurance Underwriting
Carriers will run your background through a few different databases to make sure what you say on the application matches to your records. One database is the MIB. The MIB shows your insurance application history. It will show when you applied for insurance in the last few years. If you applied to several life insurance carriers, the carrier will want to know why. It will also raise any red flags if what you said on your application does not match to any previously released information, through your application history.
They will also look at your prescription drug history. Carriers can see all of that. (Even the ones I take.) If an answer to an application question does not match a prescription drug you take, that will be a red flag. For example, if you take an inhaler for emphysema, but say no to the question, “in the last 2 years, have you been diagnosed or treated for emphysema?”, the carrier questions your truthfulness. Same for medication used for bipolar disorder.
That’s why a majority of the carriers conducts phone interviews with an underwriter. They look all of that stuff up while on the phone with you. The interview usually lasts 10 minutes, sometimes less, sometimes more. An underwriter conducts the interview and will either approve or modify on the spot or a couple of days.
Remember that lying on a life insurance application constitutes fraud. Obviously, fraud is a bad thing. There is no need to lie. We will find you the lowest cost policy for your situation, which we discuss next.
Just to recap, in terms of a burial insurance policy. If the carrier doesn’t ask your condition (in this case bipolar disorder) on the application, then likely the carrier won’t consider, even with a prescription drug history.
Burial Insurance For People With Bipolar Disorder
There are a few types of burial insurance for people with bipolar disorder. We will help you make sense of them next.
Not to worry. We can and will find you an affordable burial insurance plan regardless of your situation.
The first one is called level benefit. This means the death benefit has “day 1” or immediate coverage. Level benefit coverage is what you want. If you have the policy in place and die the next day, the carrier pays the death benefit. Level benefit is also, generally, the least expensive burial insurance option. Let’s say Jim applies for $20,000 burial insurance. The carrier approves him with level benefit coverage. Six months later, Jim, unfortunately, dies suddenly. Jim’s beneficiary will receive the $20,000 to help pay for Jim’s funeral costs.
As we said, a policy with level benefit (i.e. immediate death benefit) usually contains a lower premium.
The second one is called graded benefit. There are a couple of options within the graded benefit category. One option delays the release of the death benefit to your beneficiaries. Think of this as a “waiting period” for death benefit coverage. Depending on the carrier, the waiting period could be 2 years or 3 years. If you die within the waiting period, the carrier usually reimburses your premiums plus interest to your beneficiary. Carriers reserve graded benefit coverage for people with moderate to significant health conditions. In other words, the applicant says “yes” to a question on the application.
An example will make this coverage clear. Let’s use the same example, except the carrier approves Jim for graded benefit coverage. The graded death benefit is 2 years. Should Jim die of natural or sickness within 2-year year timeframe, the carrier will reimburse his beneficiary the premiums plus 10% interest. If Jim dies year 3 and after, the full death benefit paid to his beneficiary. (One caveat: beneficiaries receive the full death benefit anytime if death by accident.)
Unfortunately, Jim unexpectedly dies by sickness 6 months later. His beneficiary receives the premiums back plus 10%.
Instead of a waiting period, some carriers allow a percentage of the death benefit paid out . For instance, if you die within the first year of the policy, your beneficiary might receive 15% of the death benefit. If you die within year 2, your beneficiary might receive 60%. After year 2, the policy pays 100%.
People with many health complications usually end up with graded benefit coverage. It is, by no means, bad. However, we aim to find level benefit coverage when possible. Level benefit coverage usually means the lowest premium cost for you.
Other Types Of Burial Insurance For People With Bipolar Disorder
There are a couple more types of burial insurance for people with bipolar disorder.
Another option exists if you can’t obtain level benefit or graded benefit coverage. It is called guaranteed-issue life insurance. This means just as it sounds: you automatically receive coverage. Just fill out an application and answer a few non-health questions. Send in the application with the premium draft information, and you now have life insurance. The carrier does not run your background through the MIB or prescription drug history.
Guaranteed-issue coverage contains a “waiting period” death benefit, usually 2 years. We work with a few different guaranteed-issue carriers. Sometimes, the cost of the guaranteed-issue life insurance coverage is less than that of a traditional graded benefit policy. If that’s the case, it makes sense to apply for the guaranteed-issue coverage. It’s true; we have a guaranteed issue life insurance policy that is affordable and sometimes cost less than a comparable graded benefit policy, and at times, even an immediate, level benefit product!
We also utilize a funeral trust. Funeral trusts pay the death benefit directly to the funeral home. They also protect your policy from the Medicaid spend-down process. That is right. Whole life insurance, including burial insurance in most cases, is a spendable asset for Medicaid since it contains cash. That means if you need to go into a nursing home, Medicaid will force you to terminate your life insurance policy and use the cash for your nursing home care. If that happens, you have lost the initial intention of the life insurance.
We don’t let our clients get to that point. We expedite the transfer of the cash in your burial insurance policy into the funeral trust, where it will be protected. Contact us to learn more.
Carriers That Offer Burial Insurance For People With Bipolar Disorder
Now that you know the types of burial insurance available to you, which type do you think we will choose? That’s right. The one with the lowest cost and that best fits your situation. People with bipolar disorder can obtain level death benefit coverage. As we said earlier, however, there may be other health conditions that affect your approval. If you are overweight, have diabetes or cancer, smoke, or have some other significant health condition in addition to bipolar disorder, the chances of a level death benefit coverage are much lower.
That is where we come in. We have helped people with bipolar disorder AND some other health conditions obtain proper coverage, usually at level death benefit coverage.
Having said that, many carriers don’t even ask a question about bipolar disorder on their application. So, as we mentioned earlier, these are the carriers we will generally recommend.
That is right! However…
Remember we said if you need assistance with daily living? If you do, the carrier declines you. If that is the case, we still have affordable options as described earlier.
There is no reason that you have to pay an arm and a leg for burial insurance if you have bipolar disorder. Even if you have additional health complications, we can likely find a policy that will meet your needs and budget.
We hope you found this article informative. You can obtain burial insurance if you have bipolar disorder. Are you ready to get started? Feel free to contact us or use the form below. We work with many carriers in the burial insurance area and know we can find the right coverage for you. As with everything we do, we work with your best interests at all times. That means if there is a better option for you than what we can provide, we will help put you in touch with someone who can.