Understanding Final Expense Insurance with Diabetes

Written by Ross Quade

What many people do not realize is that life insurance application approval or rejection percentages are all a numbers game. A life insurance application is weighed against the various vital statistics and various life data analyses of the human condition. As in, how long a human being usually lives, the probability of death due to smoking, bad eating habits, risky lifestyles, and so on.

The truth is that you are more likely to be approved for life insurance the younger and healthier you are. Young and healthy people are more likely to live longer and spend many decades paying life insurance premiums. Even if the life insurance company has to pay death benefits, chances are they will break even cost-wise against the decades of premiums already paid.

Unfortunately, the older and unhealthier you are, the less likely you are to be approved for life insurance coverage. At least, on terms beneficial to your needs. Almost like a casino, the insurance company always makes calculations to win. Especially if you have preexisting conditions like diabetes.

Do You Have Diabetes and Need Life Insurance?

That is why most life insurance companies either outright reject or do not easily approve applicants with preexisting conditions. Applicants with preexisting medical conditions pose a financial risk to insurance companies. They could be forced to pay out benefits sooner without the benefit of having the buffered protection of multiple premium payments. If you have diabetes, you could be rejected, be forced to pay higher premiums or endure waiting periods before a policy goes into effect.

However, if you have diabetes and need life insurance coverage, all is not lost. There are many life insurance products, like final expense insurance, that have policies with built-in provisions for applicants with preexisting conditions. Like diabetes. If you know the process, then you can apply and be approved for coverage through a final expense life insurance policy. It may not be the coverage you want, but it is the coverage you need.

The Preexisting Condition

Type 1 Diabetes is a condition where the human body does not produce insulin, which manages body glucose levels. Type 2 Diabetes, also known as adult-onset diabetes, is a condition where the human body does not produce enough insulin. Over 95% of Americans with diabetes have Type 2 diabetes. Over 30 million Americans have diabetes. One in four people have diabetes and don’t even know it. Diabetes can be managed with regular insulin shots and/or guidance from a doctor. However, managing diabetes costs the American medical industry about $245 billion dollars every year.

Final Expense Life Insurance

Final expense life insurance is a smaller form of a traditional life insurance policy. The average policy can range from between $5,000 to $100,000. You may have to apply for a $50,000 policy, or more, due to your condition. Final expense life insurance caters to a pool demographic of people who cannot be approved for life insurance due to age, infirmed health, or preexisting conditions. It is usually advertised to people over the age of 50. Older people who live on fixed incomes and who have preexisting health issues.

Final expense insurance is not about bequeathing death benefits or borrowing against it for a loan. It is basically a last-chance form of life insurance that should be used to pay all of your final expenses, as in your funeral expenses. Any named beneficiary should be charged with paying and arranging all of your final expenses.

You can pay anywhere from $50 to around $150 a month for final expense life insurance. Depending on the severity of your diabetes, how often you take insulin, how often you go to the hospital, that cost can be higher. With final expense life insurance, you can apply over the phone. You may not have to undergo a health examination, but you will have to submit your complete medical and prescription history.

As long as your diabetes is manageable, your premium should be relatively cheap. There are many final expense life insurance companies that can offer you coverage. You should steer clear of any that enforce so-called, “graded death benefits,” waiting periods.

Waiting Periods

Basically, graded death benefits is a fancy way of saying waiting period. If you are approved for a final insurance policy with diabetes, some companies may force you to wait for two years before the policy goes into full effect. Meanwhile, you continue to pay full premiums. It’s very expensive, it’s a policy condition stacked against your benefit, and if you die during that waiting period, your beneficiary gets nothing and there will be no money to pay your final expense.

Try to look for final expense life insurance companies with, “first-day coverage,” meaning that there is no waiting period. Or, look for final expense insurance coverage that offers partial benefits during the first two-years of a waiting period. Otherwise, you are gambling with the possibility that your coverage will be voided. After paying a lot for it.

Companies That Can Help

There are several burial insurance companies that can offer coverage to applicants with Type 1 and/or Type 2 diabetes. How much you pay in premium varies, depending on how manageable your diabetes is. Most offer coverage policies between $10,000 and $100,000. Most have no waiting period or offer partial benefits during the first two years of coverage. These companies include Foresters, Assurity, Prosperity, Mutual of Omaha, Liberty Bankers, Sentinel Security Life, and Gerber.

Be Realistic

If you have diabetes, you can be approved for final expense insurance. It may not be on the most beneficial terms for your needs, but it is available. Be prepared to pay a little more in premium and don’t settle for two-year waiting periods. Dealing with partial benefits is better than having no benefits for 24 months.

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Ross Quade
Ross Quade has been a licensed insurance agent since 2008. State of Texas license #1702965. He has a Bachelor Degree in Psychology from University of Minnesota and minored in Applied Economics. He has been quoted in several online publications including Huffington Post, Young Startups and various financial blogs. Ross frequently writes about issues related to the insurance and finance industry.
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