Final expense waiting periods: level, graded and guaranteed issue
A level final expense policy has no waiting period: it pays the full benefit from day one. Graded, modified and guaranteed issue policies limit the payout for natural-cause death during the first two years (three on some plans), usually to premiums paid plus 7% to 10%. Accidental death is typically paid in full from the start.
Updated · Editorial standards
- Level benefit
- Full benefit from day one
- Typical limited period
- 2 years (3 on some plans)
- Typical early payout
- Premiums plus 7%–10%, or 30%/70% of face
- Accidental death
- Usually full benefit from day one
What a waiting period really is
A final expense "waiting period" is a limited-benefit period, not a period with no coverage. Your policy is in force from the first premium, but a natural-cause death in that period pays a smaller amount.
Carriers use it to accept people with serious health problems or to skip health questions entirely. Without it, people could buy a policy only when they knew death was near.
It is separate from the two-year contestability period found in almost every life policy. That lets the carrier review the application after a death, even on a level plan.
Level benefit: no waiting period
A level benefit policy pays 100% of the face amount from the first day, for any cause other than the standard suicide exclusion. It is what most healthy and moderately healthy people qualify for.
You qualify by answering "no" to the carrier's key health questions. On Mutual of Omaha's Living Promise application, applicants who answer "no" to every underwriting question get the level plan.
Transamerica's Immediate Solution and 10-Pay Solution, American Amicable's immediate plan and Mutual of Omaha's Living Promise level plan all pay the full benefit from day one.
Graded and modified benefits
A graded policy pays part of the benefit early on. American Amicable's Senior Choice graded plan pays 30% of the face amount for death in year one, 70% in year two, and 100% from year three.
A modified or return-of-premium policy refunds what you paid plus interest instead. Mutual of Omaha's graded Living Promise pays all premiums plus 10% for natural-cause death in the first two years, then the full benefit.
These plans still ask health questions. They suit people with conditions such as recent cancer treatment, a recent stroke or heart event, or kidney disease. See our pages on cancer, stroke and kidney disease.
Guaranteed issue
Guaranteed issue policies ask no health questions, so anyone within the age range is accepted. In exchange, they almost always have a two-year limited benefit.
Gerber Life pays 110% of earned premiums for natural-cause death in the first two years, Colonial Penn pays premiums plus 7% interest compounded annually, and Mutual of Omaha Guaranteed Whole Life pays a reduced benefit for natural-cause death in the first two years.
Read the exact wording. Gerber pays 110% of "earned" premiums, while Transamerica's Easy Solution pays 110% of premiums paid, minus any loan balance.
Accidental death and other exceptions
Most graded and guaranteed plans pay the full face amount for accidental death from day one. Mutual of Omaha, Gerber Life, Transamerica and American Amicable all state this.
Some plans add conditions. Colonial Penn pays the full amount in the first two years only if death occurs within 90 days of the accident, and Gerber notes that exclusions apply.
State rules can change what is offered. Mutual of Omaha's graded Living Promise is not sold in Arkansas, Montana or North Carolina, and its suicide exclusion is one year instead of two in North Dakota.
How carriers decide which plan you get
Simplified issue applications sort you by your answers. On Mutual of Omaha's Living Promise application, a "yes" to any Part One question means no coverage, a "yes" in Part Two means the graded plan, and all "no" answers mean the level plan.
Height and weight count too. Mutual of Omaha's build chart lists a higher maximum weight for the graded plan than for the level plan, so weight alone can move you to a graded policy.
Each carrier draws these lines differently. A condition that triggers a graded plan with one carrier may qualify for a level plan with another, which is why an independent agency compares several.
How to avoid a waiting period
Apply for a level plan first. Many conditions that people expect to disqualify them, such as controlled diabetes or high blood pressure, often still qualify, and each carrier asks different questions.
Timing matters too. Health questions often ask about a set period, such as the last two or three years, so a level plan may open up once enough time has passed since a treatment or event.
If you must take a graded or guaranteed plan, apply young enough to finish the period, and keep the policy. Replacing it later restarts the clock. Compare prices in our cost guide.
How early-death benefits compare across real policies
What each plan pays if the insured dies of natural causes during the limited period. Rules can vary by state.
| Plan | Issue ages | Natural-cause death in limited period | Accidental death |
|---|---|---|---|
| Mutual of Omaha Living Promise, level | 45–85 | Full benefit from day one | Full benefit |
| Mutual of Omaha Living Promise, graded | 45–80 | All premiums paid plus 10% (years 1–2) | Full benefit in all years |
| Gerber Life Guaranteed Life | 50–80 (NY 75) | 110% of earned premiums (years 1–2) | Full benefit |
| Transamerica Easy Solution | 18–80 (NY 50–75) | 110% of premiums paid, less loans (years 1–2) | Full face amount |
| Colonial Penn Guaranteed Acceptance | 50–85 in most states | Premiums plus 7% interest, compounded (years 1–2) | Full face if death within 90 days of the accident |
| American Amicable Senior Choice, graded | See carrier | 30% of face in year 1, 70% in year 2 | Full face in all years |
| American Amicable Senior Choice, return of premium | See carrier | Premiums plus 10% (3 years at issue ages 50–64; 2 years at 65+) | Full face in all years |
Questions people ask
Does all final expense insurance have a waiting period?
No. Level benefit policies pay the full amount from day one. Only graded, modified and guaranteed issue policies have a limited-benefit period.
How long is the waiting period on final expense insurance?
Usually two years. Some return-of-premium plans use three years for younger issue ages, such as American Amicable for ages 50 to 64.
What happens if I die during the waiting period?
For a natural-cause death, your beneficiary gets a partial benefit or a refund of premiums plus interest, often 7% to 10%. Accidental deaths are usually paid in full.
Is there final expense insurance with no waiting period and no health questions?
Rarely. Plans that skip health questions nearly always use a two-year limited benefit. Plans with no waiting period ask health questions.
Does the waiting period restart if I switch policies?
Yes. A new graded or guaranteed policy starts its own limited period, and a new contestability period as well.
Is the waiting period the same as the contestability period?
No. The limited-benefit period caps payouts on graded or guaranteed plans. The contestability period, usually two years, lets the insurer check the application on any policy.
Can I switch to a level plan later?
Possibly, if your health improves enough to answer "no" to a level plan's questions. Keep your current policy until the new one is issued, because the new one starts a fresh contestability period.
Sources
- Mutual of Omaha, Living Promise product and underwriting guide (producer PDF, 2021)
- Mutual of Omaha, Living Promise whole life
- Mutual of Omaha, Guaranteed Whole Life rate chart and application (PDF)
- Gerber Life, Guaranteed Life Insurance
- Transamerica, Final Expense Solutions consumer brochure (PDF)
- Colonial Penn, Guaranteed Acceptance Life Insurance (California product page)
- American Amicable, Senior Choice consumer brochure (PDF)
This page is for education and is not financial, tax or legal advice. Products, features and availability vary by carrier and state.
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