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Having proper life insurance is one of the most important things that you can do for your family. It should be on the top of your to-do list. But, just like as your life continues to change, so will your need for life insurance.
Final expense life insurance is a type of coverage that provides funds for the cost of a funeral, burial, and other related expenses that are considered to be one’s “final expenses.” This coverage is sometimes referred to as “burial insurance” or “funeral insurance.” The face amount of this coverage is not typically high, with proceeds usually ranging between $5,000 and $50,000 per policy.
Life insurance in general is an important part of a good, solid overall financial plan. Certainly, by having the right type of life insurance, a decedent’s loved ones will be able to pay off debts, and continue their current lifestyle without future hardships and financial struggles.
As one gets older, the need for senior adult life insurance coverage does not go away. It does, however, change. One type of life insurance coverage that is often marketed to those who are older is final expense coverage.
If you assume you don’t need life insurance because of your age or don’t think you can qualify for insurance coverage, please keep reading. This article is going to look at the advantages of final expense policies and help you decide if you these policies could be the best choice for you.
How Does Final Expense Life Insurance Work?
Similar to with other types of life insurance, the owner of a final expense life insurance policy is able to name a person, or persons, as their policy beneficiary to receive the death benefit proceeds. Typically, the beneficiary will be a spouse, family member, or close friend that the individual trusts to carry out the payment of his or her final expense payments.
Also like other life insurance options, final expense coverage can be either term or permanent. Term policies will provide coverage for a set amount of time, such as 10 years or 15 years. Therefore, should the insured person pass away when the insurance policy is in force, the named beneficiary will receive the proceeds for the purpose of paying the insured’s final expense costs.
A permanent final expense life insurance policy will not have an expiration on it. Therefore, as long as the premiums are paid, a permanent policy will remain in force. In addition to the life insurance coverage that is provided with a permanent plan, this type of policy will also include a cash value component where cash can accumulate on a tax deferred basis over time.
Typically, final expense life insurance is offered at a lower amount of premium than most other types of life insurance coverage. Policy holders are usually allowed to make easy monthly payments – which can be convenient for retirees who are typically living on a fixed income.
When purchasing a final expense life insurance policy, it is important for an applicant to determine the type of coverage that they need – term versus permanent – as well as the amount of coverage that will be appropriate for their specific needs. In addition, it is also wise to ensure that the insurance company that is offering the coverage is financially stable and has a good claims paying reputation.
Qualifying For Final Expense Life Insurance
Qualifying for final expense life insurance is typically easier than qualifying for more traditional forms of coverage. There are actually two ways in which these types of plans can be underwritten. These include either simplified issue or guaranteed issue.
With a guaranteed issue policy, the applicant is not asked any medical questions at all on the application for coverage. Therefore, anybody who applies will be approved for this particular type coverage.
Although the premiums on these plans are typically higher than they are on most other types of life insurance plans, those who possess adverse health conditions can still obtain life insurance coverage with pre existing conditions – so this can provide a great deal of peace of mind to those who would otherwise not qualify for life insurance benefits.
A simplified issue final expense life insurance policy application will ask some questions regarding the individual’s health and medical status. However, the person will not be required to take a medical exam in order to apply for coverage.
Not having to take a medical exam is a great benefit for anyone that is in poor health or has severe health complications. Unlike a traditional insurance policy, you won’t be declined for life insurance coverage, regardless of your health. If you’re in poor health and have several health conditions, these could be the best option or getting insurance protection for your loved ones.
If even you’ve been declined for life insurance in the past, or you’ve received expensive quotes, there are still several affordable options for life insurance coverage. You can’t put a price tag on the peace of mind that life insurance will bring.
Why Consider Purchasing A Final Expense Life Insurance Policy?
When purchasing life insurance, it is important to choose the right type and the right amount of coverage for your specific needs. Therefore, be sure to add up all of the potential final expenses that may be required.
Given the high cost of a funeral today, along with the many other related costs, the additional debt could leave loved ones with a great deal of undue stress. A final expense life insurance policy can help to ease this.
Although all types of life insurance can be important – depending upon one’s needs – final expense coverage can fill the specific need of ensuring that loved ones are not burdened with having to come up with a substantial amount of money at an already emotional time.
How Much Life Insurance Coverage Do You Need?
Before you buy one of these plans, one of the most important things to do is determine if a final expenses policy will give you enough protection. These policies are designed for people who only need a small amount of life insurance to pick up some of the smaller bills left behind.
When you’re looking to get life insurance, either through a term life insurance policy or with a final expense plan, it’s vital that you get enough coverage for your loved ones. Regardless of your age or stage of life, more than likely, you’ll need some type of life insurance for your loved ones. There are dozens of different factors that you’ll need to consider when calculating your insurance needs.
The first thing that you should calculate is your debts and final expenses that you would leave behind to your loved ones. The main goal of your life insurance is to give your family the money that they need to pay off those bills that they would be responsible for. Your life insurance will give them the money that they need to pay off any debts that you would leave behind, like your mortgage or car payments. If you’re going to buy a final expense insurance policy, but you still have a mortgage payment, then these plans will not offer you enough life insurance. You will need to apply for a traditional term policy.
The next thing that you calculate is your annual income. The secondary goal of your life insurance plan is to replace your income if something tragic were to happen to you. If you’re one of the main income earners in your household, your family would suffer financially if you were to pass away. While each person is different, most insurance agents suggest getting between seven and ten times your annual income. Final expense insurance is not designed to recover lost income. If you still have family members who rely on your paycheck to get by, then you need to buy a plan which offers more life insurance.
When trying to decide what type of plan you need, you’ll need to add up all of these different factors. Once you reach a certain stage of your life, you may not have any debts or final expenses that you would leave behind, aside from funeral expenses. Additionally, you may not have anyone that relies on your paycheck every month, which means that you could consider getting a final expense life insurance policy, that is going to give you much less coverage.
If you have any questions about final expense insurance plans, or about any of the other options available to you, please contact one of our agents today. We would be happy to answer those questions and ensure that you’re getting the best plan to fit your needs.
You never know what’s going to happen to you tomorrow, which means that you shouldn’t wait any longer to get the life insurance protection that you need. Not having adequate coverage for your loved ones is the worst thing that you can do for their future.
If something tragic were to happen to you tomorrow, your loved ones would be responsible for paying for your funeral costs and any other final expenses. This can make an already difficult situation a lot worse. Don’t wait any longer to get the protection that they need. Our independent agents can make the process as quick and simple as possible.
Working with one of our independent insurance agents is going to save you both time and money on your life insurance policy, regardless of which kind of plan that you choose. Unlike a traditional agent, we don’t only work with one single company. Instead, our agents represent dozens of insurance companies across the nation and can bring all of the lowest insurance rates directly to you.