Finding Affordable Burial Insurance for Seniors Who Smoke

As a senior who smokes, it can be more challenging to find insurance that fits your budget compared to non-smokers. However, there is an empathetic solution called burial insurance, also known as funeral insurance or final expense insurance, which offers an affordable option for both smokers and non-smokers. The application process is designed to be quick and easy, ensuring you find a policy that can provide for your loved ones. It’s important to understand that while smoking is viewed as a concern by insurance carriers, it doesn’t prevent you from getting insured. Regardless of your circumstances, there are steps you can take to find affordable burial insurance as a senior who smokes.

Why is Burial Insurance a Better Choice for Seniors than other Life Insurance Options?

Burial insurance offers policyholders lifelong coverage at a cost similar to term life policies. This is made possible by providing a smaller death benefit compared to other life insurance policies. While some policies offer death benefits over $100,000, burial insurance typically provides death benefits ranging from $2,000 to $50,000. The specific policy size you can obtain depends on factors like your insurability and the insurance company you choose. Although this may not be life-changing, it’s still a significant amount that can bring substantial financial relief to your loved ones.

These policies are often purchased with the intention of covering funeral expenses, which can range from $7,000 to $12,000. The exact costs depend on factors such as the type of funeral arrangements, the chosen funeral home, the casket type, and whether you prefer burial or cremation. However, the death benefit can be utilized for various purposes. It can help with personal debts like student loans and medical bills, or even be used to fund vacations and other leisure activities. Some individuals choose burial insurance because it can serve as collateral when taking out loans. Another advantage is that the death benefit is tax-free, alleviating any concerns about additional financial burdens for your loved ones during tax season.

Qualifying for burial insurance is also easier, partly due to the relatively low death benefit compared to other options. It’s a non-discriminatory process without the need for medical exams. However, you may be required to answer medical questions, and less favorable responses could result in higher premiums. Since smoking is a common question on medical questionnaires, being a smoker might lead to higher premiums compared to non-smokers.

Moreover, burial insurance is ideal if you need coverage on short notice. The absence of a medical exam eliminates several weeks from the application process, as you won’t need to schedule appointments with a doctor. Plus, you can complete the application from the comfort of your own home, saving you time and travel.

Why Does Smoking Increase the Cost of Burial Insurance?

Insurance companies generally assign higher premiums to individuals engaged in hobbies or lifestyle choices that potentially shorten their lifespans. Tobacco use is linked to various types of cancers and often leads to premature death.

From the perspective of insurance companies, a shorter lifespan means less time spent paying premiums. Insurance providers are running businesses, and premiums are crucial for paying employees and allowing the disbursement of large sums of money while remaining profitable. Companies feel more comfortable issuing policies to younger and healthier individuals because they will likely pay premiums for a longer period, ensuring the company can provide a death benefit without suffering losses.

However, risk doesn’t automatically result in rejection. Insurance companies consider the extent of the risk involved. Tobacco use itself is not a chronic condition or terminal illness, and although it often leads to a shorter lifespan, it’s still possible for a smoker to live beyond the average life expectancy. To compensate for this insurance risk, companies assign higher premiums.

Another aspect to note is that insurance companies are not concerned with how frequently you smoke. Typically, they only ask if you’ve smoked within the past year. Being a smoker is not a permanent label; therefore, one effective method to obtain lower burial insurance rates as a smoker is to refrain from tobacco use for 12 months. After this period, you can declare yourself as a non-smoker and pay the same premiums as someone who has never smoked. While it may seem counterintuitive, a one-year age difference does not have the same negative impact as waiting five or ten years. Abstaining from smoking can be challenging, but it presents a less daunting option for those who only smoke occasionally.

When Does Smoking Have the Most Significant Impact on Burial Insurance Policies?

If smoking is your only risk factor, it won’t pose a major hurdle. For instance, a 50-year-old male smoker in generally good health can expect to pay as little as $36.89 per month for a $10,000 policy. This represents a minimal financial sacrifice, amounting to slightly over $1 per day throughout the month. Similarly, a 50-year-old female smoker in similar condition can find a $10,000 policy for $28.14 per month.

However, when smoking is combined with other risk factors, it leads to a significant increase in premiums. Other risk factors may include age and serious health conditions.

The impact of age on smokers’ premiums can be observed through sample rates provided by Gerber Life for a $10,000 policy for smokers of different ages and genders:

Gerber’s monthly rates for male smokers of different ages:

• 50 – $38.41
• 60 – $56.65
• 70 – $87.91
• 80 – $220.92

Gerber’s monthly rates for female smokers of different ages:

• 50 – $28.14
• 60 – $46.48
• 70 – $68.75
• 80 – $152.17

Age alone results in a substantial increase in prices, especially as individuals approach their life expectancies. This is because insurance companies calculate premiums considering the limited time high-risk policyholders will be able to pay them. For example, waiting 30 years to sign up can result in a fivefold increase in premiums, adding an extra $2,190.12 per year for a male smoker.

It is important to consider that different insurance companies may offer varying rates depending on your age, particularly for seniors. Mutual of Omaha, for example, exemplifies this by providing lower rates for certain age groups, despite having higher rates for younger individuals. Let’s take a look at the monthly rates for male and female smokers of different ages with Mutual of Omaha:

Male smokers:

• 50 years old – $36.89
• 60 years old – $59.02
• 70 years old – $106.76
• 80 years old – $193.47

Female smokers:

• 50 years old – $31.43
• 60 years old – $44.67
• 70 years old – $73.68
• 80 years old – $134.74

While Gerber Life tends to be cheaper for smokers in most age categories, there are discrepancies that highlight how specific insurance providers are not a one-size-fits-all solution. For instance, a 50-year-old female smoker would find lower rates with Gerber Life, but female smokers aged 60 and 80 would actually pay less for a Mutual of Omaha policy.

It’s important to keep in mind that these rates represent only a sample for the current year and that this comparison is limited to two companies. When the time comes for you to search for a burial insurance policy, you may find yourself comparing rates from numerous insurance companies. Burial insurance entails various monthly premium rates, which can differ significantly depending on the insurer you choose.

In some cases, terminal illnesses can present additional challenges, as your application may be outright rejected if you have certain risk factors or if there’s a strong likelihood of passing away within two years, such as in the case of renal failure. However, there is an option for burial insurance where you won’t have to disclose medical information or answer medical questions.

Now, let’s consider whether simplified issue or guaranteed issue burial insurance is the better option for you:

• Simplified issue: If you’re a relatively young smoker without significant health problems, simplified issue is a better route. These policies have lower premiums, offer higher death benefits, and don’t require a waiting period for coverage to take effect. You’ll only need to answer a medical questionnaire consisting mostly of yes-or-no questions. It’s crucial to be transparent during this process because your insurer will also review the medications you take. Dishonesty about your medical condition, if contradicted by your prescriptions, can result in policy denial.
• Guaranteed issue: If you have dire health circumstances where rejection or high costs are a possibility, guaranteed issue is the best choice. With guaranteed issue policies, there is no medical underwriting process. However, there are some downsides to consider, such as higher premiums and a potential two-year waiting period before the policy becomes effective. If you pass away during the waiting period, your loved ones won’t receive the death benefit. Nevertheless, some policies with waiting periods offer graded death benefits. For example, they may pay a percentage of the death benefit if you pass away within the first or second year. In such cases, a graded benefit policy can be a suitable choice when no other options are available.

If you’re wondering how to get the best rates, it’s essential to understand that you have limited control over your insurability risk. Factors like your age, family medical history, and to some extent, your health conditions are beyond your control. These factors can pose obstacles when seeking accurate quotes from life insurance companies in your area.

Fortunately, there are companies specializing in finding quotes from multiple insurance providers, saving you the time and effort of conducting extensive research through phone calls and online searches. Our company, for instance, works with over 15 different insurance companies and holds an A+ Better Business Bureau rating. When you use our services, you’ll avoid long wait times on the phone and receive prompt answers. Our team of experienced professionals understands the intricacies of life insurance and will help you find the most affordable burial insurance coverage available for smokers or anyone facing health challenges.

We see you as an individual with unique wants and needs, and we’re dedicated to working with you to obtain a burial insurance policy that is both affordable for you and ensures your loved ones will be taken care of when the time comes. We believe that everyone deserves the opportunity to leave a legacy, have their voices heard, and meet their final needs. Feel free to call us today at (800) 398-9821 to get started.