Not much prompts you to consider your life insurance options more than your doctor saying, “You’re terminally ill.”
Your loved ones’ financial futures race through your mind and you hope it’s not too late to protect them.
Thankfully, a terminal illness does not prevent you from buying life insurance.
Your options are limited, however.
We will cover everything you need to know to quickly secure life insurance after a devastating diagnosis.
Table Of Contents
- Life Insurance For Terminally Ill: 5 Essential Facts
- 3 Steps for Instant Coverage
- The Graded Benefit
- Sample Quotes
- FAQs About Life Insurance with a Terminal Illness
- How to Apply
Life Insurance For Terminally Ill: 5 Essential Facts
There are five important facts you need to know about securing life insurance coverage when you have a terminal illness.
1. Guaranteed Issue Life Insurance Is Your Only Option
The only type of life insurance you can buy if you have been diagnosed with a terminal illness is guaranteed issue life insurance.
Why? Life insurance carriers are in the business of risk assessment. A terminal illness represents a high level of risk, so they are only willing to issue a specific form of coverage.
Guaranteed issue policies are simple, straightforward, and can be a godsend if you are unable to qualify for other forms of life insurance.
Note – if you are under age 40 and are terminally ill, you will be hardpressed to find a policy.
Look to accidental death and dismemberment insurance – coverage that will pay out if you die in a qualifying accident.
2. Your Policy Will Have a Modest Face Amount
It’s important to know that guaranteed issue policies are modest in size.
In fact, most cap at $25,000. However, Great Western will issue policies up to $40,000.
One option to consider – stacking life insurance policies. You may be able to, depending on your budget, purchase multiple guaranteed issue policies to increase your total death benefit.
In comparison, traditional coverage, like term life insurance with no physical, offers face amounts for $500,000 or more.
3. You Will Not Need a Medical Exam
Guaranteed issue is a form of no exam life insurance.
When you are terminally ill, your life insurance application will NOT include a medical exam or:
- Needles
- Nurses
- Liquid samples
No exam life insurance for seniors is growing in popularity. In fact, you can buy a policy from the comfort of your home.
4. There are No Health Questions
The purchasing process is incredibly simple. Guaranteed issue is a form of life insurance with no health questions.
For instance, you will NOT be asked any questions about your:
- Medical history
- Smoking
- Prescriptions
- Drug or alcohol use
- Diagnoses
Even if you have been diagnosed with stage 4 cancer, you will not need to disclose your health information.
5. You Will Get Instant Life Insurance Coverage
Because the application process is simple, you can expect to have your policy issued in a matter of minutes.
Other forms of coverage take longer. For example, traditional term or whole life insurance may take weeks.
3 Steps For Instant Life Insurance Coverage for the Terminally Ill
Expect three quick steps to secure life insurance if you are terminally ill.
Step 1: Submit Your Application
Application submission.
Work with an independent agent here. That way, you can compare and contrast guaranteed issue carriers.
For instance, we recommend getting quotes on the following policies from top-rated companies, with the help of an agent:
- AIG Guaranteed Issue Whole Life Insurance
- Gerber Guaranteed Issue Life Insurance
- Great Western Final Expense Insurance
- Mutual of Omaha Guaranteed Issue Life Insurance
Your application only requires basic information:
- Full name
- Date of birth
- Address
- Social security number
- Beneficiary
Step 2: Understand Your Policy
Your agent will communicate the particulars of the life insurance policy so that you fully understand it before you purchase. You’ll want to fully understand:
- Carrier information
- Beneficiary details
- Premium payments
- Death benefit
Step 3: Make Your First Payment
Policy issuance and delivery.
After you provide your payment and beneficiary information, your policy is issued and delivered.
Usually, your policy becomes active after you make your first payment.
Be sure to keep your policy safely stored in a location your beneficiaries are aware of.
Life Insurance for People with a Terminal Illness Includes a Graded Benefit
Guaranteed issue life insurance is modest in size and typically includes a graded benefit.
What is a graded benefit? The death benefit will not fully pay until a specific time period has passed, which is often two years (sometimes three years).
If you die during the graded period, either your premiums will be returned (usually with interest) or a percentage of your death benefit will be paid.
Note – the graded period is usually waived if a qualifying accident results in death.
If you outlive the graded benefit period, your beneficiaries will receive your full death benefit.
You may be understandably concerned about outliving the graded death benefit period. In that case, you can have peace of mind knowing that your premiums, plus interest, will be returned to your beneficiary.
Worst case scenario – You will not lose money if you pass away during the graded period, and you will gain a modest interest amount on your premium payments.
Best case scenario – You outlive the graded period, and your beneficiary receives the full death benefit payment.
Sample Quotes for Terminally Ill Life Insurance
You should know that premiums for a guaranteed issue policy are high in relation to the amount of coverage you are purchasing.
Why? Premiums are based on risk.
A terminal illness means you present a substantial amount of risk.
That being said, if the only type of coverage you qualify for is guaranteed issue, the policy can make all the difference for your loved ones, despite the premium rates.
How much does life insurance cost for the terminally ill?
For a general idea of cost, evaluate the following sample rates for a terminally ill individual.
Life Insurance Quotes For Terminally Ill Male
| $5,000 | $10,000 | $25,000 | $40,000 | |
|---|---|---|---|---|
| 40 Year Old | $26.25 | $49.58 | $119.58 | $189.58 |
| 45 Year Old | $29.17 | $55.42 | $134.17 | $212.92 |
| 50 Year Old | $22.50 | $44.09 | $108.85 | $229.58 |
| 55 Year Old | $29.42 | $56.90 | $143.46 | $249.58 |
| 60 Year Old | $32.40 | $63.17 | $158.35 | $292.92 |
| 65 Year Old | $43.04 | $84.15 | $211.52 | $359.58 |
| 70 Year Old | $50.09 | $98.18 | $246.58 | $469.58 |
| 75 Year Old | $70.22 | $138.55 | $347.42 | $626.25 |
| 80 Year Old | $115.42 | $227.92 | $565.41 | $902.91 |
Subject to change
Life Insurance Quotes For Terminally Ill Female
| $5,000 | $10,000 | $25,000 | $40,000 | |
|---|---|---|---|---|
| 40 Year Old | $21.67 | $40.42 | $96.67 | $152.92 |
| 45 Year Old | $24.58 | $46.25 | $111.25 | $176.25 |
| 50 Year Old | $17.69 | $34.47 | $84.79 | $189.58 |
| 55 Year Old | $22.60 | $43.23 | $109.31 | $216.25 |
| 60 Year Old | $25.99 | $50.02 | $126.27 | $256.25 |
| 65 Year Old | $31.78 | $61.57 | $155.15 | $312.92 |
| 70 Year Old | $38.22 | $74.52 | $187.46 | $399.58 |
| 75 Year Old | $54.59 | $107.17 | $269.04 | $546.25 |
| 80 Year Old | $88.71 | $175.42 | $439.54 | $752.91 |
Subject to change
Frequently Asked Questions About Life Insurance with a Terminal Illness
Frequently asked questions about buying life insurance when you are terminally ill and their answers.
What is a terminal illness?
Generally speaking, a terminal illness is defined as a condition in which an “attending physician certifies that a patient has a terminal condition with an expected life span of 6 months or less”. (Source: Stanford)
Illnesses that sometimes qualify as terminal include:
- Heart disease
- Kidney disease
- Liver disease
- Lung disease
- Advanced HIV
- Late-stage Cancer
- Stroke
- Amyotrophic Lateral Sclerosis (ALS)
- Dementia
Note – As you know, many patients diagnosed as terminally ill live longer than the average expected lifespan. An expected lifespan is just that – expected – and not indicative of your unique condition.
Can you buy life insurance for someone who is dying?
Yes. In this case, the only type of life insurance policy you can buy is a guaranteed issue policy. It will have a lower coverage amount and a waiting period (usually 2 year).
Should I buy life insurance if I am terminally ill?
If someone depends on you financially, you need life insurance.
A terminal illness means you will only qualify for a guaranteed issue policy, which includes a graded death benefit period.
Understandably, you may be concerned about outliving the graded period.
However, you will not lose money if you die before the graded period. Your premiums will be returned to your beneficiary, plus interest.
And, as long as you live one day longer than the graded period, your beneficiaries receive the full death benefit.
I already have life insurance. Will it cover terminal illness?
Yes.
If you secured coverage prior to your terminal illness diagnosis, that is great news.
There are two important things to know.
- Your beneficiary receives the full death benefit.
- Look into the living benefits of the policy. You may be able to utilize the accelerated death benefit rider now to access funds.
How to Apply for Life Insurance with a Terminal Illness
In order to purchase appropriate life insurance coverage when you are terminally ill, there are two things you need to do.
First, be sure to work with an independent agent who is knowledgeable of guaranteed issue policies.
That way, you can compare and contrast multiple carriers and policies to find the best one to fit your needs.
Second, have your basic information ready to be communicated.
Remember, all you will need to share is:
- Name
- Address
- Birthdate
- Social security number
- Beneficiary information
To start the process, fill out a free instant quote.
