Life insurance is an important financial tool. This type of coverage can help to protect those you love from falling into financial hardship. With the proceeds, loved ones may pay off large debts, and/or continue their living expenses without the worry of dipping into savings or having to sell off other assets.
While there are many reasons to own life insurance, one key purpose of this coverage is to help family members or other loved ones to pay off final expenses. These include the cost of a funeral, as well as other related costs such as a burial plot, headstone, flowers, and transportation.
When all added together, final expenses can run in the range of $10,000 or more. Therefore, having a good final expense life insurance policy can help with producing the cash that is needed to pay these off.
What is Final Expense Insurance and How Does It Work?
Final expense insurance is a type of coverage that is designed for paying off one’s funeral and other related costs. These policies are typically purchased by seniors who are between the ages of 50 and 80 – although some insurance carriers will offer final expense insurance to those who are older.
A final expense life insurance policy can come in different forms, such as term or permanent coverage. If the policy is term, then it will offer a death benefit only, without cash value. These types of policies are purchased for a certain amount of time, such as 10 or 15 years.
Final expense coverage that is permanent will provide both death benefits, as well as cash value. The cash that is in a permanent life insurance policy is able to grow on a tax-deferred basis, meaning that there will be no tax due on the growth of these funds unless or until they are withdrawn. Permanent life insurance coverage will not expire at any certain time, but rather will remain in force for the remainder of the insured’s lifetime, as long as the premium is paid.
Final expense life insurance policies – whether term or permanent – will usually have a face amount of proceeds that ranges from $5,000 or $10,000 up to $25,000 or even $50,000. In some cases, though, the coverage can be more.
In many cases, a final expense insurance policy will not require the applicant for coverage to go through a medical examination for the purpose of qualifying. And, in some cases, the individual may not even be asked any medical questions on the application. In these cases, the coverage can be issued very quickly – sometimes even on the same day that an individual applies.
Having no medical exam can also mean that individuals who have certain health conditions may be able to obtain life insurance – even if they had been turned down for coverage for a medically underwritten policy.
Why Consider Final Expense Insurance?
There are many reasons that an individual should consider final expense life insurance. Just some of these include the following:
1) Proceeds for Paying Off Final Expense Debt – Certainly, one of the primary reasons to consider the purchase of a final expense life insurance policy is so that there will be funds available for paying off the insured’s funeral and other related expenses. In some cases, an individual will even purchase an additional amount of final expense coverage so that their loved ones can also pay off any additional debt, such as uninsured final medical bills and / or the cost of hospice care.
2) Supplement to Other Life Insurance Coverage – Even if a person already has other life insurance in force, these policies may be earmarked for other needs, such as paying off a mortgage or providing a surviving spouse with ongoing retirement income. Having an additional policy that is dedicated solely to paying off final expenses, then, can be smart financial planning. Oftentimes, due to its lower face amount of coverage, final expense insurance will be very affordable.
3) Qualification, Even With Adverse Health Conditions – Due to its no medical exam feature, a final expense life insurance policy may allow someone who has certain health issues to still qualify for coverage – even if they have been turned down in the past for a life insurance policy. Therefore, in some cases, final expense insurance can offer people a “backup plan” for obtaining life insurance protection, such as with a guaranteed issue policy as well.
4) No Medical Exam – Having no medical exam can also provide other individuals the opportunity to obtain life insurance coverage, too. For example, there are some people who have a fear of needles. For these individuals, final expense coverage can allow them to obtain life insurance protection, yet without having to go through a needle stick for the blood test that is often required with traditionally underwritten policies.
5) Coverage is Issued Quickly – For those who need coverage quickly, final expense life insurance can also fit that requirement. In many cases, these policies can be approved and issued within just a few days – or even sooner.
What to Consider When Purchasing a Policy
Before purchasing a final expense life insurance policy, there are several things that should be considered. For example, knowing whether you should obtain term or permanent coverage is important. This is because the type of policy that you choose can determine how long your coverage will last, as well as the amount of premium that you will be charged. It will also determine whether or not you will have any cash value build up in the policy.
It will also be important to determine how much death benefit you need on your policy. In many cases, the cost of a funeral and other related final expenses may run in the range of $10,000. Making calls to some local funeral homes can help you in determining the average cost of final expenses in your area. However, if you need your policy to cover more than just these costs, then the approximate amounts of the additional needs will also have to be determined and factored in.
Yet another key decision when considering a final expense insurance policy is the insurance company through which you will purchase the coverage. There are many insurance carriers that offer final expense insurance. However, not all of these carriers – or their policies – will be exactly alike.
For this reason, you should do a review of the potential insurance companies that you are considering. This can be done by looking up their financial strength ratings – such as by A.M. Best, Standard & Poor’s, Moody’s, and / or Fitch – as well as by reviewing their Better Business Bureau (BBB) grade and accreditation.
Also, when checking on the BBB’s website for information regarding the insurer, it will also be wise to look at the number of complaints the company has had over the past three years. This helpful information, as well as any customer reviews, will provide you with additional details that you can use in making your coverage decision.
Where to Find the Best Premium Quotes on Coverage
When seeking the best premium quotes on final expense life insurance coverage, it is typically best to go through a company or agency that has access to more than just one life insurance carrier. In doing so, you will be able to more directly compare policies, benefits, and insurance companies, as well as premium prices. From there, you will be able to choose which will work the best for you and your specific needs.
If you are ready to move forward with the purchase of a final expense insurance policy, we can help. We work with many of the top life insurance carriers in the marketplace today, and we can assist you with obtaining all of the essential information that you require for making an informed purchasing decision. We can do this for your easily and conveniently, all from your computer, and without the need to meet in person with a life insurance agent. To proceed with the quote process, just simply take a few seconds to fill out the form on this page.
Should you find that you still have any additional questions about final expense life insurance, then please feel free to contact us directly. We can be reached via phone, toll-free, by dialing 888-389-8676. Our experts are happy to assist you with finding the best final expense insurance coverage for you, as well as with obtaining premium quotes.
We understand that the purchase of life insurance can sometimes seem overwhelming. There are many different variables to consider, such as the right amount of benefit, as well as the type of coverage to purchase. But the good news is that there are many options that are available to you – and you have an ally on your side that can work with you in coming up with the best plan for you. So, contact us today – we’re here to help.