How To Get Life Insurance With a Terminal Illness [2025]

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.

Average Monthly Rates for a $10,000 Final Expense Policy

 

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.

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