As with any insurance policy, the risk profile of the person being insured largely determines the cost of the cover. A very high risk person may in fact be refused cover altogether when it comes to life and dread disease policies. However, the same factors may not play a role in funeral plans.
Can Sick People Get Funeral Cover?
Medical tests are not required and while disclosure of pre-existing diseases is mandatory, it may not affect the final cover and cost as significantly as is the case with life insurance. You should always be honest with your insurer and disclose all information that is requested. It can prevent delays in payment or even refusal to payout at the time of the claim.
Funeral plan insurers are well aware that older people who often have medical ailments will also require cover. There may be a slightly higher cost for the cover but the issue lies in the waiting period and not exclusion clauses as is the case with other policies. In other words you will not be refused a payout if you die from a pre-existing disease, but you will only be able to claim after the waiting period.
Pre-Existing Disease Waiting Periods
Waiting periods or deferred periods are necessary in the insurance industry. It ensures that a person does not only take out cover when they need it. Instead consumers should be opting for cover as early as possible whether they will need to use it in 6 months, 5 years or even a decade later.
Unfortunately not everybody realises the importance of doing so and want to start up at the last moment and claim immediately. Some people actually try to take out a funeral plan after the person dies in order to claim for an immediate funeral. Therefore waiting periods protect both the insurer and the other customers who have loyally paid their premiums for years without claiming.
What this means for a person with a pre-existing disease is that the funeral plan insurer will not refuse to payout if you die from a pre-existing disease. Neither will you be refused cover if you currently have a disease and want to start up a funeral plan. Some insurers may charge you a little more for the policy but this is rare as well.
Instead the waiting period is longer irrespective of the cause of death. Some insurers will waive this waiting period if death is from accidental causes, like a car crash. Otherwise the waiting period applies and no claims will be processed until this time is passed. Many insurers are aware that customers may not be honest and apply a blanket waiting period irrespective of the health status or age of the beneficiaries.