Waiting periods in final expense insurance

Many final expense policies limit what they pay if the insured person dies soon after the policy starts. This is often called a waiting period, or a graded or modified benefit.

How it typically works

• For a set period, often the first one or two years, death from illness may pay only a refund of premiums, sometimes with interest, or a reduced benefit.
• Accidental death is often covered in full from the start, but check.
• After the period ends, the full benefit applies.

Why it exists

Policies that ask few health questions take on more uncertainty about the applicant's health. A waiting period is one way insurers manage that risk.

What to ask

• How long is the waiting period?
• Exactly what is paid during it, and for which causes of death?
• Are there other exclusions, such as suicide in the first 24 months?

This guide is general information, not insurance, financial, legal or tax advice.