How Does a 2 Year Waiting Period Work for Burial Insurance?
Posted in Burial Insurance last updated on July 15, 2026The way a 2 year waiting period for burial insurance(final expense life insurance, cremation insurance, funeral insurance etc.) works is by paying a return of premium policy payout(premiums paid into the plan refunded to the beneficiary plus 10% interest on the total) if the insured dies within the first 2 years of the policy being active. Now if the insured dies due to an accident the policy will payout the full death benefit to the beneficiary.
Key Takeaways
- A 2 year waiting period for burial insurance pays a return of premium if the insured dies of natural causes, refunding premiums plus 10% interest.
- If death occurs due to an accident, the full death benefit is paid immediately, bypassing the waiting period.
- Graded and modified plans offer progressive payouts over time, providing better benefits than standard waiting period policies.
- Many policies marketed as guaranteed acceptance may come with a 2 year waiting period; it’s crucial to seek day one coverage instead.
- Consultation with agents can help determine eligibility for day one coverage based on health conditions and underwriting criteria.
Table of contents
- How a 2 Year Waiting Period Works for Burial Insurance(The 10% Return of Premium)
- Accidental Death By Passes the 2 Year Waiting Period for Burial Insurance
- Graded & Modified Plan Waiting Periods
- The Big Mistake: Buying a Waiting Period When You Don’t Have To
- Eligibility for Day One Coverage Use our Free Tool
- Conclusion
How a 2 Year Waiting Period Works for Burial Insurance(The 10% Return of Premium)
As we mentioned before for guaranteed issue whole life insurance policies there is a 2 year automatic waiting period with a return of premium. The Return of Premium Benefit(ROP) pays out the premiums you have paid into your policy plus 10% interest on top of the total if you die within the first 2 years of having your plan active.
This means your family will receive something rather than nothing in the event of your untimely death. It acts like a guaranteed savings vehicle, if you pass away of natural causes during the first 24 months the insurance company is basically saying “We cannot pay the full $20,000 benefit yet, but we will refund the money you gave us with an additional 10% on top of it for your trust.“
Example:
Lets say you have a plan with a monthly premium of $60. If you pass away from natural causes after 12 months, you would have paid a total of $720 in premiums. Your beneficiary will get the $720 back plus the 10% interest which totals at $792.
Since this $792 is a life insurance death benefit this money is income tax-free meaning your beneficiary keeps all of it and can be used for your final wishes.
Better Than a Bank
Getting a guaranteed 10% return on your money is actually higher than leaving that same premium money sitting in a traditional savings account!
Accidental Death By Passes the 2 Year Waiting Period for Burial Insurance
The 10% rule only applies to natural causes of death, it does not apply to accidental death. Good news is if you die of an accident(car crash, falling off a high ladder etc.) it completely bypasses the 2 year waiting period and the policy pays out the full death benefit amount immediately to your beneficiary.
So even if you have that 2 year waiting period if an unexpected accident happens your family will have the money they need to cover your funeral & end of life expenses.
Graded & Modified Plan Waiting Periods
It is important to note that there are other types of waiting periods for final expense insurance plans. These are called graded death benefit or modified death benefit plans. These plans are often offered if you apply with a company through us and they find something in your medical or prescription history in their underwriting that does not pass for immediate coverage payouts.
Graded & modified plans have a gradual payout over years 1, 2 & 3 meaning your beneficiary gets a much better payout than a standard 2 year waiting period with a guaranteed issue policy.
Example:
- Graded: Year 1 pays 30% of the death benefit, Year 2 pays 70% of the death benefit, Year 3 pays 100% of the death benefit
- Modified: Year 1 pays 10-20% of the death benefit, Year 2 pays 40-50% of the death benefit, Year 3 pays 100% of the death benefit
These are variations of the same idea when it comes to how a 2 year waiting period for burial insurance works.
The Big Mistake: Buying a Waiting Period When You Don’t Have To
Here’s the truth, you may not have to settle for a 2 year waiting period! You could be eligible for day one coverage! Many companies like Colonial Penn’s 995 plan advertise their plans on TV as “guaranteed acceptance” which results in you either knowingly or unknowingly purchasing a plan with an automatic 2 year waiting period.
This is why you should run away from big name TV advertised plans like that. If they are advertising “no health questions!” “everyone gets accepted!” etc. you should not even bother with them. They are not independent brokers like us who specialize in shopping the market to help you find a plan that best fits your needs.
Our top priority when speaking with our clients is finding them day one coverage if possible. We train our agents on the underwriting niches of the different companies we work with to see which one can potentially offer you day one immediate policy payouts despite your health conditions. Our agents simply ask you a few health questions and based on your answers they can assess the likelihood of which company to apply with that could offer day one coverage.
Eligibility for Day One Coverage Use our Free Tool
Your eligibility for day one coverage is based on your health conditions, history and prescriptions. Below is our free tool to give you an idea of your potential eligibility for our top tier carriers potentially offering day one coverage. Just search your health conditions to give yourself an idea or alternatively speak with us directly by using the quote form to your right.
| Health Condition | Day One Eligibility | Best Plan Option |
|---|---|---|
| ADL’s(Assistance of Daily Living Eating, Dressing, Toileting, Bathing) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| AIDS & HIV | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| ALS | Modified Options Probable | Graded or Modified Broker Options |
| Alcohol Abuse | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Alzheimers & Dementia | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Amputation Caused by Accident (No ADLS Needed) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Amputation Caused by Accident(ADL’s Needed) | Modified Options Probable | Graded or Modified Broker Options |
| Amputation Caused by Diabetes or Disease(No ADL’s Needed) | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Amputation Caused by Diabetes or Disease(ADL’s Needed) | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Aneurysm | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Angina | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Angioplasty | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Assisted Living Facility | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Asthma | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| AFIB (Atrial Fibrillation) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Brain Tumer(Non Cancerous) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Bipolar Disorder | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Brain Tumor(Cancerous) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Bronchitis (Chronic) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Cancer-Must have occured and been cured over 2 yeas ago with no further complications or medications | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Coronary Bypass Surgery | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Cardiomyopathy | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Cerebral Palsy | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| COPD Chronic Obstructive Pulmonary Disease | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Circulatory Surgery | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Cirrhosis | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Congestive Heart Failure | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Cystic Fibrosis | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Defibrillator | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Depression | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Diabetes(Without Complications) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Diabetes(With Complications) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Dialysis | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Down Syndrome | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Drug & Alcohol Abuse | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Emphysema | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Heart Attack | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Heart Disease | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Obesity & Under Weight | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Hepatitis C | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Hospitlization(Current) | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Huntington’s Disease | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Kidney Disease Stage 1 – 3 | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Kidney Disease Stage 4 – 5 | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Lupus (Systemic) | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Multiple Sclerosis | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Muscular Dystrophy | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Organ Transplant | Modified Options Probable | Graded or Modified Broker Options |
| Oxygen Tanks | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Oxygen Concentrator | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Pacemaker Implant | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Pancreatitis | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Parkinson’s Disease | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Pending Surgery | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Schizophrenia | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Scleroderma | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Seizures | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Sickle Cell Anemia | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Sleep Apnea | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Stroke | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Stent | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| TIA Mini Stroke | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Tumor Cancerous | Guaranteed Issue | Guaranteed Issue Plans(No Health Questions) |
| Tumor Non-Cancerous | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Ulcerative Colitis | Excellent Chance (Immediate) | Top Tier Independent Broker Plans |
| Eligibility details shown above represent generalized carrier underwriting guidelines for educational purposes. Actual approval for immediate day-one coverage is subject to individual medical underwriting, prescription history checks, and final carrier approval. Call us directly to verify your specific eligibility. | ||
Conclusion
Work with us to secure your final expense coverage. Our agents all specialize in explaining everything related to funeral insurance from how a 2 year waiting period for burial insurance works to the graded & modified benefits mentioned in this article. We have access to 5+ companies that are A-rated that can offer day one coverage if you qualify for it.
Do not trust what you see on TV.