If you have a terminal illness, it’s still possible for you to get life insurance, but your options will be limited and your premiums will be more expensive. Factors like your diagnosis, any complications, your life expectancy, and your treatment plan will affect your eligibility.
Life insurance options for people with a terminal illness
For most people with a terminal illness, guaranteed issue life insurance will be their best option. Term life insurance isn’t available once you have a terminal diagnosis, but other types of policies may be able to provide coverage for you.
Speaking with a licensed insurance agent is the best way to determine which option is best for you, especially if you have a terminal diagnosis.
Guaranteed issue life insurance
Guaranteed issue life insurance is a type of final expense policy often used to help cover funeral costs and other end-of-life expenses. These policies offer near-guaranteed approval, with the stipulation that the person applying for coverage must be of sound mind.
Guaranteed issue life insurance is often quite expensive compared to other types of policies. Additionally, if you pass away due to a medical issue during the first two years that the policy is active, your beneficiary will not receive the full death benefit. Instead, they will receive an amount equal to 110% of the premiums you paid.
Pros
Approval is guaranteed
No medical exam is required
Policies last your whole life
Cons
Monthly premiums are expensive
Two-year waiting period required for death due to medical issue
Best guaranteed issue life insurance
Mutual of Omaha
4.5
No-medical-exam option
Why we chose it
Mutual of Omaha is a reputable company that offers a variety of life insurance products — including a no-medical-exam option — so that you can select the type of life insurance that best suits your needs.
Pros and cons
Pros
No-medical-exam options for older applicants
Strong financial and customer ratings
Cons
Policies are more expensive than average
Slow turnaround time
Mutual of Omaha offers a guaranteed issue policy with cheaper rates than some of its competitors. People age 45 to 85 can apply for coverage amounts between $2,000 and $25,000, though some age and coverage amount guidelines differ from state to state.
Group life insurance
Group life insurance is a type of life insurance policy that covers multiple people. Most people get group life insurance through their employer for free or for a heavily subsidized rate, but this type of insurance can also be offered through other trade organizations.
Group life insurance usually provides coverage equal up to a set amount — for instance $50,000 — or one to two times your annual salary. You can’t be denied coverage with group insurance, so if you have a terminal illness, this is a great way to get covered.
Pros
You can’t be declined.
If you have health complications, you may get a better rate than if you apply as an individual.
Your employer usually pays all or most of the premium.
Cons
You have to accept whatever insurance provider is offered by the employer or organization.
The amount of coverage you get is often less than what you need.
You usually don’t get to keep the coverage when you change jobs.
Accelerated death benefit rider
If you already have an active life insurance policy, you can exercise this feature, which many companies include at no additional cost.
An accelerated death benefit rider is a policy add-on that allows you to withdraw part of the money from the death benefit of your policy if you have received a terminal diagnosis and a doctor has projected that you’ll pass away in the near future — usually six to 24 months, depending on the insurer.
Pros
It’s a rider provided at no additional cost.
You can use the money you withdraw for anything you need, including medical bills.
Cons
You have to already be approved for either a term life or permanent life insurance policy to add the rider.
You can’t increase or add the rider after you have already been diagnosed with a terminal illness.
Some providers charge a $150 withdrawal fee.
How much does life insurance for someone with a terminal illness cost?
For most people getting life insurance with a terminal illness, a guaranteed issue policy will be the best option. A 60-year-old male can expect to pay around $140.69 per month for a guaranteed issue life insurance policy with a $25,000 payout, while a 60-year old female can expect to pay around $105.21 per month for the same coverage.
Average guaranteed issue life insurance rates
Age | Gender | $10,000 coverage amount | $25,000 coverage amount |
|---|---|---|---|
50 | Female | $30.39 | $74.47 |
Male | $40.18 | $98.96 | |
60 | Female | $42.68 | $105.21 |
Male | $56.88 | $140.69 | |
70 | Female | $63.87 | $158.29 |
Male | $86.67 | $215.16 | |
80 | Female | $126.85 | $315.62 |
Male | $157.04 | $391.09 |
Methodology: Average monthly rates are calculated for males and females obtaining a $10,000 or $25,000 guaranteed issue whole life insurance policy. Life insurance rates are based on policies offered by Policygenius from Mutual of Omaha. Rates may vary by insurer, policy type, coverage amount, health class, and state. Not all policies are available in all states. Rate illustration valid as of 01/01/2024.
How to buy insurance when you have a terminal illness
Even if you have a terminal illness, the buying process for life insurance will be similar to what it is for everyone else. Follow these steps to get the coverage you need.
Do I have to disclose a terminal illness to a life insurance company?
You need to disclose all of your health information, including any diagnosis of terminal illness to the life insurance company so they can accurately assess your insurance risk. When you apply for life insurance, the agent you’re working with will ask about your medical history, including any diagnoses or medicine that you take.
After you apply, the insurer will confirm your application details against your medical records to ensure that the information you provided is correct and thorough.
Failing to provide the relevant information related to your health history can be considered insurance fraud. No matter what your situation is, it’s best to be honest and forthcoming on your application.
What is insurability in life insurance?
Insurability is the degree to which an insurance company deems a person “insurable” based on their assessed risk. People with a terminal illness will generally be deemed less insurable than someone with a treatable health condition.
A licensed agent will ask you questions related to your health and lifestyle to determine your insurability.
Are you allowed to buy life insurance for a dying relative?
Technically, you can buy life insurance for someone who’s dying, as long as they consent and participate in the application process. If you chose to pay for someone else’s life insurance policy, you have to prove that you have insurable interest, which means you’ll be impacted financially if they pass away.
If you want to get life insurance coverage for your spouse, you can speak with an insurance agent and answer health and personal questions on their behalf. Your spouse will still need to consent to the application and ultimately sign the policy documents to get insurance coverage.
If you do want to help another family member get life insurance, like a terminally ill parent or sibling, you can assist them with their application, but they’ll need to connect with an insurance agent and be the main driver in getting the policy — and you won’t be able to discuss personal or health information with an agent for them in the same way that you could for your spouse.
Other health concerns that can affect your life insurance
Certain pre-existing conditions and other health-related concerns can affect your life insurance options or costs. A Policygenius expert can help you find the right policy for your needs.
Mental health issues such as depression or anxiety
Frequently asked questions
Can I buy a life insurance policy for someone without their knowledge?
You cannot get a life insurance policy for someone else without their consent and participation.
Can you cash out a life insurance policy if you’re terminally ill?
Insurance policies that have a cash value — like many permanent life insurance policies — typically allow you to surrender the policy and claim the cash value. The cash value will be less than the death benefit and there may be fees associated with the claim. It’s best to speak with a licensed agent to determine if surrendering your policy is advisable.
Can I get life insurance for someone who is in the hospital?
You can’t get life insurance for someone else. If you have a loved one in the hospital who wants life insurance, depending on their situation, they may be able to get coverage, but they would have to apply for and purchase the insurance themselves.
