Helping a parent with home health care or having a nurse personally assist you can bring changes that will take preparation. Obtaining a life insurance policy will also require planning.
Finding funeral insurance while receiving home health care due to a medical concern greatly limits your opportunity for coverage.
Having said that, you still have options. This article will detail how carriers will ask about it, react to it, and finding the best funeral insurance coverage options.
Can Seniors Get Funeral Insurance With Home Health Care?
Most companies will deny coverage to people currently receiving home health care services. However, select companies provide seniors burial insurance with home health care. This is very hard to find, and most require a waiting period.
Other health concerns are usually the reason someone would be receiving in-home care. These pre-existing medical conditions may also play a role in gaining burial insurance coverage.
Funeral Insurance Coverage Explained
This coverage was designed specifically to provide seniors with a low-cost way to cover their funeral costs. Also known as burial insurance and final expense insurance, this whole life protection is simple to understand and easy to get.
Funeral insurance can cover any necessary expenses after the insured’s death, and the money is given to the beneficiary, often within days of filing a claim.
Whole Life Insurance Benefits
All final expense insurance is a type of whole life coverage and comes with the following fundamentals.
No Expiration: This policy lasts for the insured’s entire life, so you never have to worry about outliving the policy.
Coverage Lock: The death benefit amount that you initially take out never decreases. Seniors can apply to take out additional coverage, but the initial amount will remain the same.
Price Lock: Monthly premiums will not fluctuate as time goes on. Other products increase the older the insured gets, but that is not the case with whole life coverage.
Builds Cash Value: As a living benefit, the plan will acquire a cash value that the policy owner can borrow from if desired. With each premium payment, a small portion goes towards the cash value account that grows over time.
The Value of Burial Insurance
Burial insurance for seniors is a great option because of the specific benefits it provides.
No Medical Exam: These policies go through a simplified issue underwriting process. This means that you will never be asked to get a medical exam. You can receive insurance quotes and apply over the phone on the same day without leaving home.
Affordable: Funeral insurance is less expensive than traditional whole life insurance due to the smaller death benefit options. Burial coverage comes in custom amounts ranging from $2,000 to $40,000, while traditional policies begin at $50,000 and extend into the millions. The more coverage you have, the more you will pay.
Guaranteed Acceptance Options: Seniors receiving home health care will have limited opportunities for coverage due to their health services. However, you can still get coverage through a guaranteed acceptance plan. Acceptance is based on each carrier’s risk tolerance and what your pre-existing health concerns are.
Underwriting Guidelines for Burial Insurance With Home Health Care
Home health care includes a broad array of health care services given in-home for an injury or illness. This is usually a more convenient and less expensive option than being confined to a hospital or nursing home.
Nearly every burial insurance company will ask if you are a home health care recipient on the application for coverage. Most will exclude home health care if you are using it to recover from a surgery or injury where the care is temporary. With that said, each company sets its own underwriting criteria based upon what risk they are willing to take on. This changes from carrier to carrier.
Underwriting consists of a series of yes or no health questions. The company will determine if they will insure you based upon your answers. These answers are then confirmed by performing a MIB (Medical Information Bureau) and a prescription history check.
3 Ways an Application Asks About Home Health Care
Questions regarding in-home care are worded in 3 main ways and are a “knock-out” question.
“Are you currently receiving home health care?”
If you are currently receiving home health services, you will be denied coverage. However, if you have received in-home care in the past, you may still be eligible with the company.
“Have you received home health care within the last 2 years?”
If you have received services or treatment in your home within the timeframe asked, you will not be eligible. If the treatment was outside of the asked about timing, you are eligible. Commonly, companies ask about the past 2 – 5 years.
“Have you ever received home health care?”
If you have ever received home care, you will be ruled out, even if it was a temporary situation. You must be completely open and honest when answering the questions.
If the company does not ask about home health care (this is extremely rare), it will not affect coverage. Royal Neighbor’s burial insurance does not specifically ask about receiving home health care. Carriers will accept you if the application does not ask about a condition you have or a treatment that you are receiving.
4 Burial Insurance Plan Tiers
Based upon your answers to the application questions, the insurance carrier will place you into one of its plans or deny coverage altogether. Not every insurance company offers all of these plan tiers, some only offer one or two.
Level: This type of policy is the only one that provides immediate protection with no waiting period. Level plans are the hardest to qualify and cost the least. Most often, someone getting home health care will not qualify for a level plan.
Graded: This policy type has a progressive payout structure during the mandatory two-year waiting period. Usually, in year one, the death benefit would be 30% of the total amount if the insured dies, 70% in year 2, and 100% after the waiting period.
Modified: Also known as a “return of premium” plan, this policy type has a minimum 2-year waiting period. Modified plans are even easier to qualify for but are usually the most expensive option. If death occurs during the waiting period, the beneficiary receives the paid premiums plus interest.
Guaranteed Issue: Asking no health questions, guaranteed issue plans promise acceptance to nearly everyone. No health questions are asked, so you will qualify for a plan with guaranteed acceptance if you are getting home health care.
Gerber Life has a fantastic guaranteed issue plan option.
Other Medical Concerns Life Insurance Companies Ask About
The below listed medical statuses are usually asked about within the same question as home health care. Each will hinder your ability to qualify with certain companies. As a general rule of thumb, a guaranteed acceptance plan would be best for anyone that meets the following criteria.
- Long term care facility
- Mental care facility
- Nursing home confinement
- Skilled nursing facility
- Terminal illness
- Wheelchair confinement
Finding The Best Insurance Company For Current Home Health Care Recipients
Since each carrier reacts differently when issuing funeral insurance for seniors receiving home health care, it is hard to single out one company that is the best. After getting to know your specific set of medical circumstances, an agent will be able to recommend a senior final expense program to fit your needs.
There are a couple of things to keep in mind before applying for insurance coverage with a company.
Cost: Getting insurance quotes from multiple companies will help you narrow down your options and compare prices. Once issued, the premium cost will never change, but your income might. Obtaining a policy that you can afford for the foreseeable future is important.
Company: Third-party organizations conduct financial reviews of life insurance companies. This rating indicates the financial stability of the carriers and their ability to pay claims when due. Companies that have an AM Best rating of B+ or higher are considered financially sound. Get your final expense coverage through one of these carriers.
The Difference Between Captive and Independent Insurance Agents
There are two types of licensed insurance agents, captive and independent. Both can help you get a policy, but the access to plan options greatly differs.
Captive: These agents are contractually obligated to sell products from only one company. Captive agents have access to fewer plans, and these plans can come at a higher price point.
Independent: This type of agent represents many carriers and will be able to search through all of the companies and plans they have available to find the best one for your unique situation. Independent agents are not bound to one specific carrier, and they can choose what they represent.
Rather than calling around to multiple captive agencies to find final expense insurance with home health care, you can work with one independent agent who can pull multiple insurance quotes for you.
a. Qualifying for funeral insurance with home health care is possible with select carriers. Most providers will decline seniors who require this long-term care.
b. Insurance companies will look at all of your health concerns, including why you are receiving in-home services.
c. It is important that you work with an independent agency to find the best plan for your unique set of health concerns.