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Life insurance is often considered to be part of most all good, solid financial plans. This is because life insurance can help to protect the savings that you have worked hard to build up. It can also help to ensure that those you love and care about will not have to suffer financial hardships going forward if the unthinkable should occur.
There are a multitude of reasons why people may purchase a life insurance policy. These can include the payoff of large financial debt, to ensure ongoing income due to loss of a breadwinner, and / or so that a parent or a grandparent can make sure that a child has enough funds to attend the college of their dreams.
But regardless of what other needs you may have, there is one obligation that nearly everyone will face – and that is final expenses. These are the costs of a funeral, along with the other related items, such as a burial plot, headstone, flowers, transportation, and even the memorial announcements. All added together, these expenses can average out to be roughly $10,000 today – an amount that many peoples’ families just simply do not have available. For this reason, having a final expense insurance policy may be necessary – even if you already have life insurance coverage in place for your other financial needs.
What Is Final Expense Life Insurance And How Does It Work?
Final expense is a type of life insurance that is purchased for paying off an individual’s funeral and other ancillary expenses. This type of coverage is also frequently referred to as either burial insurance or funeral insurance coverage.
By having a final expense life insurance policy in place, loved ones are much less likely to have to dip into savings, sell off other family assets, or worse yet, put these expenses on a high-interest credit card, putting them in long-term debt at an already difficult time in their lives.
In many ways, Final expense insurance works like any other type of life insurance policy in that a premium is paid for the coverage, and then upon the insured’s death, the proceeds are paid out to a named beneficiary.
There are, however, some differences to be aware of, too. For example, final expense life insurance is most often purchased by those who are between the age of 50 and 80 years old – and there are some insurance carriers that may offer final expense insurance to applicants who are older.
Also, the face amount of coverage on a final expense life insurance policy is typically lower than that of a traditional life insurance policy. For example, a final expense policy will often have a benefit of between $5,000 and $50,000. Because of this, people will oftentimes combine final expense with other types of coverage. That way, they can use the final expense life insurance to pay for funeral and other related expenses, and the other coverage to pay for estate taxes, mortgage payoff, or other specific financial needs.
When purchasing a final expense life insurance policy, it is important to be aware of how the death benefits are paid out. This is because some final expense policies may not pay out 100% of the stated death benefit if the insured passes away within the first two or three years of policy ownership. In other cases, only the premiums that were paid in will be returned to the beneficiary. If, however, the insured lives past the first two or three years, and then he or she passes away, the entire amount of the stated death benefit will be paid out to the beneficiary.
Types Of Final Expense Insurance
Final expense insurance can be either term or permanent. A term policy will consist of pure death benefit coverage only, with no cash value. In this case, the policy will be purchased for a set period, such as 10 or 15 years.
A permanent policy, however, will have both death benefit coverage, as well as a cash value component. Unlike term insurance, there is no set time limit with a permanent policy – and, as long as the premium is paid, the coverage will last throughout the life of the insured.
The cash value in a permanent policy is allowed to grow and compound on a tax-deferred basis. This means that there is no tax that is due on the growth of the cash, unless or until it is withdrawn.
The policyholder is allowed to either withdraw the cash, or borrow it, for any reason that he or she sees fit – including the payoff of debts, the supplementing of retirement income, or even for taking a vacation.
The amount of the premiums on a permanent final expense life insurance policy will be locked in – and cannot be raised by the insurance company. This is the case, regardless of the insured’s increasing age over time, and regardless of whether the insured contracts an adverse health condition.
Should You Consider Purchasing Final Expense Insurance?
There can be many reasons to consider the purchase of a final expense life insurance policy. Certainly, one reason to have this type of coverage is to ensure that loved ones are not stuck with unexpected expenses at your passing. With the cost of a funeral and other related costs being so high today, many families are unprepared. But a final expense policy can provide a way to have the funds that are necessary to pay these bills quickly. This can, in turn, provide peace of mind for loved ones.
Final expense life insurance may also be easier to qualify for than other types of life insurance coverage. This is because typically, there is no medical exam to contend with as a part of the qualification process. This means that, even if you have certain health issues, you may still be able to qualify for this type of insurance coverage. With that in mind, final expense life insurance life insurance can provide you with a way to obtain the additional protection that you need – even though you may not be able to qualify for other types of life insurance coverage.
Why Combine Final Expense Life Insurance with Other Types of Coverage?
Combining final expense life insurance with your other, current life insurance protection can allow you to enhance your overall protection – and this can help you to ensure that your loved ones don’t fall short regarding financial needs.
While you may already have a certain amount of life insurance in place for your other needs, such as mortgage payoff, the replacement of ongoing income, or even for the payment of estate taxes, the payment of final expenses is yet another cost that you may not have factored in.
Combining a final expense life insurance policy with your other life insurance coverage can help in providing you with the additional amount of protection that you need to ensure that your loved ones will be able to go on from a financial standpoint.
As you plan your overall finances, the last thing you want to do is leave those you care about in a financial bind. By having the right type and amount of life insurance coverage, you can provide them – and yourself – with the peace of mind in knowing that they will be able to carry on, without financial hardship.
To put the best policy together, it is always best to first compare policies from several different carriers. This can best be carried out by working with an independent brokerage that has access to multiple final expense life insurance carriers.
How to Get the Best Final Expense Life Insurance Premium Quotes
If you’re looking for the best premium quotes on a final expense life insurance policy, we can help. We work with many of the top life insurance carriers in the marketplace today, and we can assist you in obtaining all of the information that you need in one convenient place. All you need to do to get the process started is just simply fill out the quote form on this page.
Should you find that you still have any additional questions regarding final expense life insurance coverage – or even if you just have a question about life insurance in general – our experts are happy to assist you. We can be reached directly, via phone, toll-free, by dialing 888-389-8676.
We understand that you may need some assistance with the purchase of final expense life insurance – especially if you play to combine this coverage with other life insurance protection that you already have in place. The good news is that we can walk you through the process of obtaining a quote, as well as assisting you in determining which type of final expense policy may be the best one for your specific needs. So, contact us today – we’re here to help.