Can You Buy Life Insurance for Someone Who Is Dying?

In this article...
  • Find out if you can buy life insurance for someone who is dying or under hospice care. Learn about insurability and how it impacts insurance underwriting.

When a loved one is diagnosed with a terminal illness, you want to focus on making the most of the time you have left. If the person doesn't have life insurance, you have the added worry of how you'll pay for their final expenses and may wonder if you can buy life insurance for someone who is dying. Knowing the answer can help you make more informed financial decisions during this difficult time.

Can You Buy Life Insurance for Someone Who Is Dying?

When someone applies for life insurance, the application goes through a process called underwriting, during which insurance professionals determine how much risk the potential policy involves.

For life insurance, risk relates to how likely a person is to die. Life insurance companies make money through premium payments. If you die soon after your policy takes effect, you're unlikely to have paid enough in premiums to offset the cost of the death benefit payout. This means the insurance company will pay the death benefit at a loss.

One of the key considerations of underwriting is insurability, whether an insurer can offer you a policy. People who are at a very high risk of dying are usually classified as uninsurable. Those who are deemed a moderate to high risk may be insurable but will likely have to pay more for coverage.

Unfortunately, most insurance companies consider a person with a terminal illness uninsurable. As a result, you usually can't buy life insurance for someone who is dying.

Can a Hospice Beneficiary Get Life Insurance?

A doctor must certify that a person has a life expectancy of 6 months or less for them to qualify for hospice under Medicare. Life insurance companies are likely to deem anyone who receives hospice care as uninsurable.

Do I Have to Tell a Life Insurance Company About a Terminal Illness?

You should never hide information from a life insurance company to try and obtain coverage. Lying or concealing information is a form of insurance fraud. If you're caught, you could be subject to legal consequences.

Even if you're tempted to lie, you likely couldn't fool the insurance company. Medical exams are required for most life insurance policies. Life insurers may also ask for medical records before approving an application.

If an insured person passes away shortly after a policy takes effect, the insurer will likely investigate before issuing a payout. When the company learns of the undisclosed terminal illness, they will refuse to pay.

Can You Get Guaranteed Acceptance Life Insurance if You're Terminally Ill?

Guaranteed acceptance life insurance is term life that doesn't require a medical exam for approval. This type of life insurance makes it possible for people who have health conditions that may otherwise make them uninsurable to qualify for coverage. However, life insurers still place some restrictions on these policies. Normally, a person with a terminal illness won't be approved.

Can You Take Out a Life Insurance Policy on Someone Without Their Knowledge?

No, life insurance companies generally require you to receive consent from a person to take out a life insurance policy in their name. The person will usually have to sign the application before the underwriting process can begin. In addition, they'll likely have to undergo a medical exam.

How to Get Help Covering Final Expenses

There is one way that someone who is dying may qualify for life insurance: voluntary employee life. A voluntary employee life insurance plan is offered to employees through their employers. Some companies also let you purchase policies for your spouse and children.

Normally, voluntary employee life insurance plans provide a certain death benefit to all employees regardless of their health status. Because of this, a person with a terminal illness may qualify for a policy. However, continued employment may be necessary to maintain insurance coverage. If the employee resigns due to their health condition, they are likely to lose coverage.

If you're concerned about how you'll pay for a loved one's funeral expenses, Social Security may be able to assist you. Small grants to pay for burial are available for eligible survivors. You can apply for one after your loved one passes away.

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