Here at JustBuryMe.com, we’ll often get calls from folks who have been diagnosed with ALS or amyotrophic lateral sclerosis and are looking for a life insurance policy that they can still qualify for. Now the good news is that there will be a few options that we can consider, the bad part is that most (if not all) of these options will be limited to about $25,000 dollars in coverage, and will contain what is called a Graded Death Benefit.
But before we go into too much detail about the types of life insurance that will be available, let’s just take a moment to make sure that we’re all on the same page when it comes to ALS.
According to the ALS Association, ALS or amyotrophic lateral sclerosis, is a progressive neurodegenerative disease that affects nerve cells in the brain and spinal cord. Also known as Lou Gehrig’s disease, ALS disease is responsible for the gradual deterioration of voluntary muscle control which will affect behaviors such as chewing, walking, breathing and talking.
Unfortunately, there is currently no cure for ALS and no effective treatment has been found to halt, or reverse the progression of the disease. Which means that once you’ve been diagnosed with ALS, for the purposes of life insurance, you’ll always be considered someone with ALS and as a result, will always be ineligible for certain types of final expense and burial life insurance policies.
Now the good news is that…
In recent years, social awareness of ALS has taken off which has led to a MASSIVE increase in funding which hopefully will lead to new therapeutic breakthroughs sometime soon!
That being said however…
When it comes to helping folks who’ve been diagnosed with ALS find life insurance coverage that they can qualify for, we’ll need to look at what are called Guaranteed Acceptance Life Insurance policies (AKA Guaranteed Issue). These are life insurance policies that aren’t:
- Going to require an applicant take a medical exam.
- And aren’t going to ask medical questions!
Which means that as long as you are a US citizen and you meet the minimum age requirements (usually age 40-85, product may not be available in your state) you should be able to qualify for a Guaranteed Issue Life Insurance Policy.
Which is great!
But before we get too excited, we feel that it’s important to highlight 3 major disadvantages that you’ll find when looking at purchasing a guaranteed acceptance life insurance policy.
Guaranteed issue policies are not simplified issue life insurance policies. As a result, they only offer up to $25,000 dollars in coverage. So… if you looking to cover the cost of a mortgage or protect lost wages in the event of an early death, guaranteed acceptance life insurance policies aren’t going to be a great option.
Now it is possible to buy several different guaranteed acceptance life insurance policies from different life insurance companies, but then you’re really going to learn more about the second disadvantage of guaranteed acceptance life insurance policies which is their COST!
When it comes to purchasing a guaranteed acceptance life insurance policy, one thing that you’ll generally find is that typically, “dollar for dollar”, guaranteed acceptance life insurance policies are going to cost more than traditional term or whole life insurance policies. Which means that if you’re thinking about buying several guaranteed acceptance policies so that you can obtain more than just $25,000 that’s fine, but just know that it could start to get really pricey, really quickly!
The last main disadvantage of a guaranteed acceptance life insurance policy is a clause known as a Graded Death Benefit. Now to fully understand what a graded death benefit clause is, sometimes it’s best to think about why the final expense and burial life insurance companies created it and then work backwards from there.
You see, what a graded death benefit does is protect an insurance company from having to pay out a guaranteed acceptance life insurance policy during the first couple of years (generally 2-3 years) should the insured die from a natural cause.
Now for the purposes of our discussion, it’s important to know that a “natural cause” of death would be something associated with a sickness of some type such as cancer, heart disease, stroke or diabetes.
Accidental causes of death on the other hand would include causes such as slip and fall, motor vehicle accident, or natural disaster. Accidental causes of death, unlike natural causes of death would be immediately covered with a guaranteed acceptance policy, and would not be subjected to the graded death benefit waiting period.
Now you may be thinking…. “What a rip off!”
But remember, when it comes to a guaranteed acceptance life insurance policy, the insurance company isn’t going to ask any health related questions or require you to take a medical exam. Which means that the insurance company will literally have no idea what your current health is like.
You could, theoretically be knocking on deaths door, and the insurance company would have no idea!
Which is why they created the Graded Death Benefit as a way to protect themselves from insuring those that are really, really sick. Now you could be really sick, and you can still buy a guaranteed acceptance life insurance policy, it’s just not going to pay out the death benefit if you die from “natural cause” unless you out live the graded death benefit wait period.
But it’s not all bad news…
It’s also important to note that within most if not all Graded Death Benefit clauses, there will or at least there should be some type of language that refers to what happens should someone die from natural causes during the graded death benefit exclusion period.
In most cases (be sure to check with the policy you are considering), what you’ll generally find is that in the event that the insured dies from natural causes during the graded death benefit exclusion period, most if not all of the premiums paid by the insured will be refunded to the insured’s beneficiaries plus some type of interest payment based on how long the insured had been making payments!
Which means that…
Even in a “worst case” scenario where the insured dies from a natural cause during the graded death benefit exclusion period, because their beneficiary will still receive all of the premium payments the insured made plus some small amount of interested added on!
And there you have it…
Now it is true that after being diagnosed with ALS, finding life insurance coverage is going to be difficult, and the coverage that you find isn’t necessarily going to be perfect, but few life insurance policies are, even for the heathiest individuals. The important thing is knowing what kind of coverage you can qualify for and being able to determine if it will meet your needs despite any limitations it may have. This of course will be something that you alone will be able to determine, but should you have any questions what so ever, please feel free to give us a call we’re we will be happy to answer any questions you may have as well as walk you through all of your available options!
You may also be interested in reading one of our more popular article JustBuryMe’s Best Final Expense and Burial Insurance Companies.