Recently, we spoke to a woman who was looking for burial insurance for her husband. She was looking for life insurance to cover his burial and funeral expenses. This is a common reason for burial insurance. She explained to us that he had a health condition, which is no big deal. We all have health conditions. And, burial insurance fits nicely for people with health conditions. However, the health condition he has is sickle cell anemia. Sickle cell anemia changes your life insurance and burial insurance options. There are still options, but not as many.
In this article, we discuss affordable burial insurance for people with sickle cell anemia. We first discuss burial insurance underwriting and then discuss your options for burial insurance for people with sickle cell anemia.
Burial Insurance Underwriting
If you did not know, burial insurance is a 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, and leave some money to loved ones, if you wish. To reiterate, burial insurance is a whole life insurance policy with a small face value.
Before we get into burial insurance for people who have sickle cell anemia, let’s talk about underwriting. Underwriting for burial insurance is much different than that for term life insurance and even whole life insurance with larger face amounts. If you are looking for term life insurance or permanent insurance with a larger face amount, please contact us.
With burial insurance, the carrier doesn’t care about a paramedical exam or ordering your doctor’s records. They just want to know if you have sickle cell anemia.
That’s right. No blood test, urine sample, etc. None of that annoying stuff.
They simply have you fill out a questionnaire. A “yes or no” question application. Most carriers require a phone interview as part of the burial insurance underwriting process.
(Note: if you are looking for term life or a face amount of $50,000 or larger, then contact us.)
Here’s the thing with burial insurance underwriting: if a carrier doesn’t ask the question on the application, likely the carrier disregards the health condition. For example, if the carrier doesn’t ask about sickle cell anemia on the application, chances are they won’t consider it.
And, then you obtain the best premium rate possible.
However, and we are being honest, some burial insurance carriers rate or decline people with sickle cell anemia while others don’t at all. We discuss all of this and more next.
Burial Insurance Underwriting Health Questions Related To Sickle Cell Anemia
As we discussed, a typical burial insurance application asks you “yes or no” questions. For questions related to sickle cell anemia, the questions are structured like this:
Has the proposed insured ever been diagnosed with, treated for, or advised by a physician or health care provider to receive treatment for sickle cell anemia?
Within the past 2 years, have you been diagnosed, treated, tested positive for, or been given medical advice by a member of the medical profession for sickle cell anemia?
These are real questions on a burial insurance application for sickle cell anemia.
What happens when you answer yes? Well, in this case, the burial insurance carrier offers another type of insurance than the one applied.
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 sickle cell anemia AND diabetes (for example) at an optimal monthly premium is low.
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 sickle cell anemia on their application. So, who is the one we would choose for you? That’s right. The one that doesn’t ask the question!
Types Of Burial Insurance For People With Sickle Cell Anemia
There are a few types of burial insurance for people with sickle cell anemia. They are:
(1) level / immediate benefit – those policies that provide an immediate benefit starting the first day of coverage. If you have level benefit coverage, and die the next day, the carrier pays the death benefit. People who qualify for level benefit usually are healthy with common, mild health conditions.
(2) graded benefit – this type is really for people with moderate health conditions. This burial insurance type will either pay out a percentage of the death benefit or have a waiting period for the death benefit. An example will make this clear. Let’s say you have a graded benefit burial insurance policy that pays 15% if death occurs the first year and 75% if death occurs the second year of the policy. The carrier pays 100% of the death benefit beyond year 2. If you have a $10,000 policy and die in the first year, your beneficiaries will receive $1,500.
Alternatively, some carriers have a “waiting period” on the death benefit. They may state that the waiting period is the first 2 years of the policy’s start date. If you die within the first 2 years of the policy, the carrier pays your beneficiary the premiums back plus interest. After 2 years, the carrier pays the death benefit 100% in full. I call these plans “money-back” plans because if you or loved one dies within the waiting period, you receive the money you paid plus interest.
These two options are the most common for people with sickle cell anemia. As we said, we always strive for a level/immediate benefit.
Other Burial Insurance Options For Sickle Cell Anemia
Other burial insurance options exist for people with sickle cell anemia. Guaranteed issue life insurance is one option, although unlikely if all you have is sickle cell anemia.
Guaranteed issue means just as it sounds: you, or your loved one, automatically receive coverage. Just fill out an application and answer a few non-health questions. Send in the application with the premium and draft information, and you now have life insurance. The carrier does not run your background through the MIB or prescription drug history. We will talk about that more in a minute.
Like graded benefit, guaranteed-issue coverage contains a “waiting period” death benefit, usually 2 years. We work with a few different guaranteed-issue carriers. Sounds like graded benefit and guaranteed-issue life insurance are the same? Essentially, yes, except for premium cost. Guaranteed-issue life insurance can be more expensive. Why? Well, the carrier doesn’t underwrite. It has no idea of the risk profile of its applicants. That’s why it institutes a waiting period in addition to higher premiums. However, we work with an affordable guaranteed issue life insurance policy. Sometimes it cost less than a comparable graded benefit policy. Moreover, sometimes even an immediate, level benefit product!
If you die within the 2-year waiting period, all is not lost. Your beneficiary receives the premiums back + interest. Again, this is like a “money-back” situation. It is really a “no-lose” situation. There is no risk of losing your money.
These plans could make sense if you have other health conditions including sickle cell anemia. Contact us and we can help you understand your options.
Funeral Trust Could Work As Well
We also utilize a funeral trust. Funeral trusts pay the death benefit directly to the funeral home. More importantly, 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.
A word to the wise. If you or a loved one has existing whole life insurance and will ultimately need custodial care, Medicaid will force you to use the cash in the policy to pay for your care before it will pay. A funeral trust prevents this scenario from happening.
More On Burial Insurance Underwriting For Sickle Cell Anemia
We’d be remiss if we didn’t address the obvious that happens too often. Let’s say you or a loved one just diagnosed with sickle cell anemia. You want the best coverage available. You think to yourself, “Heck with this. I am just not going to state I have sickle cell anemia. There is no way the carrier will find out!” You then apply for level (i.e. immediate) benefit coverage.
If you think you will lie on the application, or if you think you can trick the carrier, think again. On level benefit and graded benefit applications, the carriers 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. If an answer to an application question does not match a prescription drug you take, that is a red flag. Some remedies to manage sickle cell anemia include narcotics and other pain-reliving medication. They’ll want to know why.
Remember that lying on a life insurance application constitutes fraud. Obviously, fraud is a bad thing. If you die and the carrier determines you lied, the death benefit won’t be paid. There is no need to lie. We will find you the lowest cost burial insurance policy if you have sickle cell anemia.
We hope you found this article informative. You can obtain burial insurance if you have sickle cell anemia. If you or a loved one have additional significant health conditions, other plans exist. As mentioned, we work with an affordable guaranteed-issue life insurance plan in these cases.
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.