3 Types of Burial Insurance

I know that others may have differing opinions regarding  how many different types of burial insurance there actually is out there but I’m going to segment the types of final expense and burial insurance policies into three different categories.

But before one can begin to understand these three categories, I would like to give some context regarding the types or profiles of people looking to apply for burial insurance. ( what I mean three different types of people, I mean three different types of  health and medical profiles.)

1st Tier of Burial Insurance

The first tier  is made up of people that are in good health and for the  person that may have gone through some mild health condition and have some limited medical history.

So for example the person in this group may have either a clean bill of health, or they may be somebody who just went to do their labs for their annual physical and they’re learned from the doctor that their numbers in some part of the results are creeping up to warning areas or just the beginning of medical deterioration like signs of pre-diabetic where the patient’s primary doctor may express concern, warn you, and recommend a type of diet and an exercise regiment.

In addition some doctors may,depending on the type of condition may, want to recommend a preventative prescription.

For example like for somebody who’s you know starting to have higher numbers of cholesterol or higher numbers of blood pressure they may give somebody some medicine to start regulating that just Representative. (I’m not a doctor none of this article should be considered any medical advice, this what was sharing here is anecdotal information based on our experience and education )

The first tier may even include individuals who’ve experienced or gone through some minor medical episodes, mild health or medical history.

An example, someone in Tier 1 could have diagnosed with diabetes, or high blood pressure but may have been given some sort of medication to keep that under control. These types of medical profiles are included in Tier 1.

When somebody goes to get their annual physical , many doctors will send you to get blood work and you’ll take that same blood work a year in and year out. Using this information, the doctor is able to have a baseline of how things are doing; is the patient’s situation improving or getting worse in a given area.

On the blood work results, there’s usually a column for your results, and and another column that highlights the either what number someone your age high and weight should be at using national averages or the danger zone for each data point.

When it comes to diabetes the doctors usually follow, among other data points, is something called A1C exam. I believe it monitors about three months worth of your blood regiment that has a way of kind of seeing the signs of three months of impact of the blood and its sugar levels.

 So when somebody crosses into the medical concern results area, or they are about to cross this fictitious line, the primary may consider a number of medical interventions such as diet, exercise, betters sleep, and medication.

 All the people discussed so far, fall into this tier one category or profile depending on the insurance company. (I see that because there are many insurance companies around the country that offer final expense insurance or burial insurance, and have different criteria for who fits into this first-tier)

So a person with this profile would be eligible for what many in the industry call level insurance.

2nd Tier of Burial Insurance

Within this second group of burial insurance type the person would  probably have a more moderate health or medical history. so it’s not for those that have a full clean bill of health. But a person who had:

• Stroke
• Mini Stroke
• Heart Attach
• a stent put in.

This group tends to be broadly defined by the insurance companies.

And I believe that the true value of your burial specialist shines through in these types of policies. Because it’s very easy when somebody has a more involved medical history to just say okay we’re going to put you in this category or place you in this box and expect that you’ll pay this. What if the premium a simply determined by offering this person a Guaranteed Issue Burial program. Now, there is nothing wrong with that if that is all they could qualify for. But it would not be ok, if the insurance agent “sold” this product to this person because of their limited underwriting experience, skill or motivation.

That’s not okay. Plain and simple that is irresponsible

If we took this example to the next step, imagine the agent doesn’t do right by finding the right program and because of that the person has to compromise on $5,000 of coverage. This person’s beneficiary; family or friends were robbed of the financial security that should have been in place.

Commentary:

It is important, from my perspective as an educator and someone who is also an independent burial specialist, that I just share a commentary on the downside of working with an insurance agent who may not be a specialist in the sense that they won’t necessarily know all the ins and outs how the insurance companies.

We’ll look at your medical profile. For example there is one company out there that doesn’t call individuals smokers or doesn’t give them the profile of a smoker if they smoke anything else but a cigarette. And then there are other insurance companies who if you had a cigar once during that year at a celebratory event they’ll give you the tobacco rate which is more expensive.

So you want to work with somebody who understands the nuances that can apply your medical profile the 300 or so burial insurance for final expense Insurance options. So you want to make sure a that the individual or group that you’re working with can compare your profile among at least a dozen or two dozen insurance companies. (I see that because you may come across a very talented insurance agent who works for a captive insurance company. Which means they only sell or promote one policy. and if it may be more expensive for you because the only will put you into a specific category don’t have the flexibility to get you a better plan at a better price. Fortunately those types of Agents may serve their best interest more than your best interest. In the industry we call that being a fiduciary. So you want to make sure that the person can compare your profile among a dozen or so burial programs and that they and B, that day are able to shop you I’ll see you around and lastly it’s important to make sure that they have the ability to offer you if need be these three different burial insurance options because if they don’t have that option before you even start the conversation they may be looking to put you into a policy that they have rather than try to accommodate your needs so the first question I would suggest asking is:

• Are you able to shop my policy among you know a number of insurance companies insurance plans
• Do you have the ability within your portfolio the options of burial insurance programs and final expense Insurance programs to offer all 3 types of burial insurance; Level, a Modified/Graded and the third one which we didn’t discuss yet which is called Guaranteed Issue do you have all those three categories.

2nd Tier tends to have a broad criteria and not all insurance companies follow the same model. ,For example there may be someone who is offered a modified or graded burial insurance by two companies and yet two others may offer this person Level burial policies – which are less expensive. now that is a little more expensive than the level first-tier group but it’s not as expensive as the third tier which we didn’t even discuss it so they’re really in the middle of the cost is a little higher but it’s not unreasonable the big difference here is that you’re dealing with what one refers to as a graded insurance policy and what that means is insurance company is looking at your profile and saying we want to help you we have to put in a condition everybody has a different percentage to this condition but for the most part it works like this:

How Graded or Modified Burial Plans work

• If the insured died from an accident the policy would pay 100%
• If the insured died from a non-accident, the policy would pay out in the follow ways
  • In Year one the beneficiary would receive the premium paid by insured plus a percentage like 10% of the premium. (not 10% of the policy)
  • In Year two the beneficiary would receive the premium for two years plus a percentage of the premium could be 20-50% of the premium
  • In the third year and there after the policy would payout 100% no matter how the insured died

3rd Tier Burial Insurance

The individuals who should be directed to guaranteed issue burial insurance are those that have pretty significant health issues probably decline from other life insurance policies that they’ve applied for but as the term explains this is a guaranteed issue these companies are not necessarily looking at the medical profile here with me at age and there are some other criteria but for the right price individual would receive burial insurance

First of all, guaranteed issue will be more expensive than the other two policy options. Similar however, to modified or graded burial policies, Guaranteed Issue follows a similar holding period of two years.(see above to better understand how death in Year One and Two would impact the beneficiaries.

 This arrangement may sometimes bey difficult to swallow because if you’re looking for burial insurance and you have an involved medical history, although waiting the one to two years may be challenging. But consider the bright side a)that even with your medical profile you are being offered a policy b)that you’re not going to lose the money/premium paid even if something does happen to you within the first two years.

As the level of risk goes up the premium tends to also go up. This burial program is the most expensive of the three burial insurance programs because the insurance companies have more on the line. In order to cover themselves, the insurance companies have you wait and charge you more.

In closing…

There are three types of burial insurance. Tier 1 – basically good health= Level burial insurance, Tier 2 – for someone with some medical challenges. This group is defined very broadly by the myriad of insurance companies= Modified/Graded burial insurance. Tier 3 is for those that can’t get Tier 1 or 2. This is called guaranteed issue burial insurance.