The waiting period is one of the most important details in a final expense plan, and one of the least explained.
How it works
On a plan with a waiting period, if you pass away from natural causes during that time, the full benefit isn't paid. Many of these plans refund the premiums you paid instead, often with some interest. After the waiting period ends, the full benefit pays.
Deaths from accidents are usually covered from day one, even during the waiting period. Details vary by plan, so always read this part of the policy.
Which plans have one
| Plan type | Waiting period? |
|---|---|
| Fully covered (level) | No. Full benefit from day one. |
| Graded or modified | Partial benefit for the first couple of years, then full. |
| Guaranteed acceptance | Yes, often two years for natural causes. |
Why plans have them
Guaranteed acceptance plans don't ask health questions. The waiting period is how the company accepts everyone without knowing their health.
How to avoid one
- Answer the health questions. Many people qualify for a fully covered plan and never need a guaranteed one.
- Compare several companies. One company may offer full coverage where another only offers a graded plan.
- Don't wait. Health can change. Applying while you're healthier keeps more options open.
When a waiting period still makes sense
If your health means you don't qualify for anything else, a guaranteed plan is still worth having. After the waiting period, your family gets the full benefit.
Find out if you can skip the wait
Answer a few health questions on a free call. I'll check several companies to see if you qualify for full coverage from day one.
Common questions
How long is a waiting period on final expense insurance?
It varies by plan, but two years is common on guaranteed acceptance plans.
What happens if I die during the waiting period?
On many plans, your beneficiary gets back the premiums you paid, often with some interest, instead of the full benefit. Accidental deaths are usually covered from day one.
Do all final expense plans have a waiting period?
No. Fully covered plans pay the full benefit from day one. Waiting periods are mostly on plans with no health questions.
Can I switch to a plan without a waiting period later?
Sometimes. If your health allows, you can apply for a fully covered plan. Don't cancel the old one until the new one is approved.
Nick Brown is an independent life insurance agent with NJN Insurance, licensed in Arizona (License 19720244). He compares plans from several companies and explains them clearly. NJN stands for Not Just a Number.