Final Expense Life Insurance

While planning your own funeral may seem like an uncomfortable and morbid thing to do, it is very important to plan for the costs that will be associated with your funeral. Leaving loved ones with the large expense of a funeral while grieving is the last thing anyone wants to do. The many costs associated with a funeral and burial often total between $6,000 and $10,000, according to the NFDA’s 2019 report. By receiving final expense insurance, you are able to plan ahead and leave your family and loved ones prepared for a way to cover the burden. Don’t leave your family financially unprotected during one of their darkest hours.

Final expense insurance, also known as burial insurance, is a type of coverage that is meant to pay for end-of-life expenses such as:

• Final medical bills
• Funeral costs
• Burial and/or cremation costs
• Casket/urn costs
• Inheritance to children and/or grandchildren
• Payout to a spouse to help with day-to-day expenses
• Other debts.

Final expense insurance is generally intended for seniors and can offer death benefits up to $50,000. It is a type of whole life insurance policy, meaning that coverage does not expire and lasts throughout your entire life. Once you pass, your policy will provide a payout to your beneficiary that can be used to help cover the costs of end-of-life expenses.

Most final expense insurance policies have a guaranteed acceptance, meaning that they will not require a medical exam to provide coverage. This makes them a great alternative for those who can not qualify for traditional life insurance due to poor health and serious medical conditions. While the vast majority of final expense insurance policies have a simple enrollment process with minimal health-related questions, there will be some that have strict health requirements that can not be met.

It is important to research the policies available and to shop around before purchasing final expense insurance. While there are many great policies available, there are also some with unfavorable qualities. Some qualities to avoid include:

• Policies that increase premiums over time
• Policies that have unobtainable, strict health requirements
• Policies that have a shortened term or expiration date, making them useless to you when you actually need them

The best final expense insurance will be easy to qualify for, have locked-in premium rates, and have a high maturity age, meaning that you will not outlive your policy.

There are two types of final expense insurance that you can purchase; simplified issue life insurance and guaranteed issue life insurance.

Simplified Issue Life Insurance

Simplified issue life insurance is mainly for those who can not obtain traditional life insurance due to medical conditions. It is mainly for those that are age 45 and older.

Although simplified issue life insurance does not require a medical exam, you will have to fill out a detailed health questionnaire before qualifying for this type of insurance. Some medical conditions such as terminal illness and certain cancers will automatically disqualify you from this type of insurance.

Simplified life insurance provides whole life coverage, meaning that it will last your entire life as long as you continue to pay your premiums. Because insurers do not require a medical exam for this type of policy, they take on a high risk by insuring you. This often results in higher premiums and lower amounts of coverage. The amount of pay-out available usually tops out at $50,000.

Guaranteed Issue Life Insurance

Guaranteed issue life insurance is mainly for those who can not qualify for traditional life insurance or a simplified issue life insurance due to pre-existing conditions and health-related issues. Due to the minimal health questions on the application and the lack of requirements for a medical exam, almost everyone is approved.

Most policies will have a maximum payout limit of about $25,000. In addition, some will require you to hold the policy for a minimum of 2 years before they will pay the death benefits. In the event that you pass before the 2-year minimum, the amount you have paid in premiums will be refunded back to your beneficiary, but not the full policy amount.

These policies have a high maturity, meaning that as long as you continue to pay your premiums, your coverage will stay active for the remainder of your life.

This type of insurance often has the highest premium and the lowest coverage. This is due to the lack of medical exams and health-related questions.

Final expense insurance costs can vary greatly depending on several factors including:

• Age
• Sex
• Overall health
• Amount of coverage you choose
• Insurance provider you choose

Most policies will cost between $30 and $70 a month, though some can cost up to $200 for older seniors wanting high coverage amounts.

While cost is sometimes the main factor people focus on, it is much more important to look closely at the number of expenses that will be left behind when you pass and what they can cost your loved one. A slightly higher premium each month could make a huge difference in the amount of financial support that your loved ones receive when you pass.

Final expense insurance protects you. 73% of people leave behind debts when they pass. These debts are often associated with their passing, such as ambulance, emergency room visits, hospital stays, and unpaid medical bills. Having a final expense policy in place protects your family from the responsibility of paying these unexpected bills off.

With 1 out of 3 families left without life insurance, many will consider final expense insurance as a way to protect their loved ones when they pass. There are several reasons why a final expense plan is the right choice for you.

• You have pre-existing health conditions that make it impossible to qualify for traditional life insurance.
• You are on a fixed income that doesn’t allow for adding any significantly sized bills into your monthly budget.
• You do not have enough savings to cover the amount of your funeral costs and outstanding debts.
• You want to use your hard-earned savings to enjoy your retirement, not save it for your end-of-life care.

Final expense insurance can be one of the most cost-effective ways to cover your funeral expenses. In almost every case, the benefits of this type of insurance outway any disadvantages. Protect your family from the added financial stress of paying for your funeral and burial costs. The last thing anyone wants to do is leave their grieving family with this unexpected costly burden.

If you are still overwhelmed or uncomfortable with the final expense life insurance planning process, please reach out to one of our highly trained staff. Our professionals are trained to steer you in the right direction and help you to stay financially prepared for whatever the future may bring.