How To Get Life Insurance With a Terminal Illness [2024]
Though options will be limited, it is possible to secure life insurance if you are terminally ill. Policies like final expense and guaranteed issue life insurance are available for individuals designated high risk by life insurance companies.
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Rachael Brennan
Licensed Insurance Agent
Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...
Licensed Insurance Agent
UPDATED: Jul 8, 2024
It’s all about you. We want to help you make the right life insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.
Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.
UPDATED: Jul 8, 2024
It’s all about you. We want to help you make the right life insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.
Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
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- You can still get life insurance if you have a terminal illness, but the death benefits are limited
- Life insurance for high-risk people, like those with terminal illnesses, is more expensive
- There may be riders that let you receive some of your life insurance proceeds early to pay for medical care
The average person can get permanent life insurance relatively easily. But what about life insurance for the terminally ill? Someone suffering from a terminal illness or other serious medical condition is considered “high risk” by most insurance companies. Still, there are life insurance options available. We’ll discuss life insurance options for people with terminal illnesses.
Can a terminally ill person get life insurance?
Yes. The good news is that a person with a terminal illness like cancer or other serious or chronic medical condition can get life insurance. The not-so-good news is that the choices for life insurance for this “high risk” group of people are fairly limited.
Here are the most common types of life insurance for people who are considered high risk because of a terminal illness or other serious health reasons:
- Guaranteed issue/guaranteed acceptance whole life insurance
- Funeral expense life insurance
- Final expense life insurance
We’ll look at each of these options in detail to help you decide which might be the right fit for your situation.
What is the “guaranteed issue” life insurance?
Guaranteed issue (GI) life insurance, sometimes called guaranteed acceptance insurance, is probably one of the best high-risk life insurance options for people with serious health issues or medical conditions.
GI life insurance is based solely on age, location, and gender. There are no health questions asked. Even better, GI policies typically have no age limits or waiting periods.
So, you may be asking what’s the catch. GI life insurance has a limited death benefit. GI policies typically have a $25,000 maximum death benefit. Also, GI insurance tends to be expensive. Insurance companies charge higher rates for GI policies because of the higher risk they are taking by insuring someone without any medical information.
But, back to some good news, because GI life is a type of permanent whole life insurance policy, these policies have cash accounts that can be used to build up a cash value from a portion of your premiums.
Also, like other permanent life insurance policies, GI life does not have a set end date. Instead, coverage lasts as long as you continue to pay the premiums.
With features like no medical exams, no waiting periods, and no age limits, GI life might be the best choice for high-risk individuals or the elderly, making getting standard life insurance difficult or, in some cases, impossible.
What is funeral expense life insurance?
There are two types of funeral expense life insurance. Burial insurance is the first type of funeral expense life insurance. Burial insurance offers a modest death benefit, often between $5,000 and $25,000, to cover funeral, burial, or cremation expenses.
The second kind of funeral expense life insurance is called preneed funeral insurance. This type of life insurance is different because it pays the death benefit directly to the funeral service provider. Although your family never touches the policy proceeds, you get the benefit of locking in pricing as of the policy issue date.
What is final expense insurance?
Final expense insurance policy is similar to funeral expense insurance, except that coverage isn’t limited to funeral expenses. It covers other final expenses such as medical costs or legal expenses.
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Is life insurance for a terminally ill person expensive?
Insurance companies base the price of policy premiums on various risk factors. The riskier the person seeking insurance, the more expensive the insurance premiums.
Here’s a chart that shows the average monthly costs of final expense insurance by gender.
Policyholder Age Male Female
60 $57.86 $45.98
65 $71.02 $55.60
70 $88.55 $69.69
75 $114.80 $91.51
80 $163.18 $126.89
85 $230.74 $181.52
You can see from the chart above that final expense life insurance goes up as the age of the insured increases. But it would be best to talk with a knowledgeable life insurance broker or agent to get the right life insurance policy and price for your particular circumstances. Also, try to find companies that specialize in high-risk life insurance.
What are life insurance policy riders?
Sometimes life insurance policies require an exclusionary rider for terminal diagnoses or pre-existing medical conditions. An example would be a cancer rider, which excludes payment of the policy proceeds if the death is caused by cancer.
Read more:
- Life Insurance for Cancer Patients
- The Cost of End of Life Care: 48 Facts for Families and Caregivers
According to the American Council of Life Insurers, some riders allow you to access your life insurance benefits while you’re alive, like accelerated death benefit riders or living benefit riders. These types of riders allow you to receive some of your death benefits early to help you pay for medical or living expenses or hospice and related costs to make you comfortable until the end.
Case Studies: Life Insurance for the Terminally Ill
Case Study 1: John’s Story
John is a 55-year-old individual who has been diagnosed with stage 4 cancer. Knowing the challenges of obtaining life insurance with a terminal illness, John explored his options and discovered guaranteed issue (GI) life insurance.
Despite his health condition, John was able to secure a GI policy that provided him with coverage without any health questions or medical exams. While the death benefit was limited to $25,000, John found comfort in knowing that his end-of-life expenses would be taken care of.
Case Study 2: Sarah’s Journey
Sarah, a 62-year-old woman, faced the difficulty of finding life insurance coverage due to her terminal illness. After researching different options, she came across funeral expense life insurance.
This type of policy offered a modest death benefit of $15,000, specifically intended to cover her funeral, burial, or cremation expenses. By opting for funeral expense life insurance, Sarah could ensure that her family would not have to bear the financial burden of her final arrangements.
Case Study 3: Mark’s Experience
Mark, a 68-year-old individual, had a pre-existing medical condition that made it challenging for him to obtain traditional life insurance. However, he discovered final expense insurance, which provided broader coverage for various end-of-life expenses, including medical costs and legal fees.
Mark found a policy that suited his needs and gave him peace of mind, knowing that his loved ones would be supported financially when he was no longer there.
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Bottom Line on Life Insurance for the Terminally Ill
You can get life insurance that you and your family need, even if you’re terminally ill. However, your life insurance options will likely be limited to guaranteed issue, funeral expense, and final expense life insurance policies. Often, these policies have high premiums and don’t pay out more than $25,000 in death benefits, but they can help cover end-of-life costs and expenses.
Frequently Asked Questions
Can I get life insurance if I have a terminal illness?
While it can be challenging, it is still possible to obtain life insurance coverage if you have a terminal illness. However, the availability and terms of coverage may vary depending on your specific circumstances and the insurance company you approach.
What is a terminal illness?
A terminal illness is a condition that is expected to result in the patient’s death within a relatively short period, typically within a year or two. Examples of terminal illnesses include advanced stages of cancer, end-stage heart failure, or advanced neurological disorders.
How do insurance companies assess applications from individuals with a terminal illness?
Insurance companies generally assess applications from individuals with a terminal illness on a case-by-case basis. They may consider factors such as the specific diagnosis, prognosis, current health status, treatment options, and life expectancy. Additionally, they may request medical records, doctor’s statements, and other relevant documents for evaluation.
Are there specific types of life insurance available for individuals with terminal illnesses?
Yes, there are specialized types of life insurance designed for individuals with terminal illnesses. Two common options are:
- Guaranteed Issue Life Insurance: This type of policy usually doesn’t require a medical exam or health questions. It provides coverage regardless of your health condition but may have lower benefit amounts and higher premiums.
- Graded Death Benefit Life Insurance: This policy provides a limited death benefit during the first few years of coverage, typically with a waiting period. After this period, the full death benefit becomes payable. Premiums for this type of policy may be higher compared to traditional life insurance.
Can I apply for life insurance with a terminal illness through traditional insurance companies?
It can be challenging to obtain coverage through traditional insurance companies if you have a terminal illness. These companies typically require medical underwriting and may decline or postpone coverage based on your health condition. However, it’s worth exploring options with different insurance companies or seeking assistance from a knowledgeable insurance professional who can guide you through the process.
Your life insurance quotes are always free.
Secured with SHA-256 Encryption
Rachael Brennan
Licensed Insurance Agent
Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.