Life Insurance for the Terminally Ill

Some people don’t think about life insurance until they’re facing death. This might raise the question of whether you can experience the benefits of life insurance if you’re terminally ill. There aren’t many options for the terminally ill because they’re the highest risk customers but there are some policies available. Knowing what to look for in life insurance for the terminally ill will allow you to receive the coverage you need.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jul 16, 2021

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The Rundown

  • Terminally ill patients have limited life insurance options
  • An existing policy can pay out early with an accelerated benefits rider
  • Terminally ill patients only qualify for high-rate policies

Terminally ill patients are considered extremely high risk so they won’t qualify for most policies. However, the best insurance companies have coverage available for these customers.

Understanding the specifics of life insurance for the terminally ill will help you determine the right option for you.

To find life insurance quotes for the terminally ill, enter your ZIP code to find the best life insurance rates in your area.

What are the monthly rates for life insurance for the terminally ill?

The most common policy available for terminally ill patients is a guaranteed issue life plan. The following charts show the monthly rates for a $25,000 guaranteed issue life policy based on age and gender.

Average Annual Life Insurance for the Terminally Ill Rates by Age: Male $25,000 Guaranteed Issue Life Policy

Age at PurchaseAverage Annual Life Insurance Rates
40$119.58
50$108.85
60$158.35
70$246.58
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The following chart shows the same information for females.

Average Annual Life Insurance for the Terminally Ill Rates by Age: Female $25,000 Guaranteed Issue Life Policy

Age at PurchaseAverage Annual Life Insurance Rates
40$96.67
50$84.79
60$126.27
70$187.46
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As you can see, rates increase as the policyholder gets older, and female rates are lower than male rates.

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What products are available for life insurance for the terminally ill?

For most people, term life insurance offers the most benefits of life insurance. However, this type of policy best fits someone young and healthy.

Terminally ill patients are almost guaranteed to get rejected when applying for this type of policy.

Those looking for affordable life insurance for the terminally ill will usually end up with guaranteed issue life insurance.

Acceptance of this policy is virtually guaranteed with no medical exam required. Since nearly anyone can obtain this coverage, the rates are higher.

In most cases, you won’t find this type of coverage for more than $25,000. Some companies will offer a $50,000 policy but the policy maxes out much lower than other options.

This is because of the increased risk of insuring people without medical information.

Guaranteed issue life policies usually include a graded benefit. This means that the policy only pays out the money paid into it for the first two years.

Another option is to purchase final expense or burial insurance. This won’t allow you to build a cash value but you can plan and pay for your funeral and burial, taking the burden off your family.

Similar to guaranteed issue life policies, these two options allow for instant coverage.

Will life insurance for the terminally ill payout early?

Those with a terminal illness might be interested in an early payout. This can help your family pay medical bills that might stack up while you’re receiving treatment. Fortunately, some policies have an option that produces an early payout.

Many permanent life insurance policies include an accelerated death benefits rider. These living benefits allow a policyholder to access a portion of the death benefit before death if they suffer from a critical or terminal illness.

If you’re not concerned about an early payout but want to protect your family, you can also add a family benefit life rider. This offers incremental payments to a beneficiary, creating steady income in the future.

How do you buy life insurance for the terminally ill?

Finding a life insurance company for the terminally ill can be difficult. While you can search for quotes online, it might help to use an independent agent or broker.

The Insurance Information Institute offers tips on finding an agent or broker.

Whether you use a broker or find a company yourself, you’ll be required to provide certain information. The information required for life insurance for the terminally ill includes:

  • Name
  • Address
  • Birthdate
  • Social security number
  • Beneficiary information

Having this information on hand when you apply for coverage will make the application process quicker.

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Life Insurance for the Terminally Ill: The Bottom Line

Life insurance companies determine eligibility on risk so terminally ill patients are limited in their policy options. In most cases, only guaranteed issue life, final expenses, and burial insurance are available.

Examining the options for life insurance for the terminally ill will help you make your decision.

For the best life insurance rates for the terminally ill, enter your ZIP code to find the top life insurance quotes in your area.

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