Nobody likes to think about what is going to face the loved ones we leave behind upon our deaths, but unfortunately, it’s a reality we all have to face.
When a person dies, the survivors of that person are left with the task of paying off debts, providing for children and grandchildren, and ultimately planning for their own futures.
Life insurance can help alleviate this financial burden by providing a certain amount of money that will be paid to the survivor after the death of the insured.
Funerals are quite expensive, and the care we may need toward the end of our lives is also not cheap. Even something as simple as
casket prices can cost over $2,000 on average.
It’s important to
take care of these expenses ahead of time, and final expense life insurance can be a good option.
For this purpose, many seniors are seeking final expense life insurance policies.
What is Final Expense Insurance?
Like other forms of life insurance, final expense life insurance (also known as burial insurance) is a whole insurance plan.
This type of insurance plan is designed to provide a certain amount of money that will be paid to the beneficiary after the death of the insured.
Final expense life insurance is normally purchased by individuals who are very concerned about their own mortality and who want to provide for their loved ones should they die.
Unlike standard policies, such as term life insurance or permanent life insurance, this type covers the cost of medical care and funeral expenses.
Final expense policies are specifically geared toward helping with end-of-life expenses. Because of this, final expense life insurance is more popular in the senior demographic compared to other types of life insurance.
In most cases, final expense insurance does not expire as long as the monthly premiums are being paid. The application process is usually quick and easy, and the time between approval and coverage is typically only a few days.
Because end-of-life expenses apply to everyone, final expense insurance is usually fair when it comes to costs. Unlike the exclusive rating criteria with other insurances, final expense policies are affordable.
Seniors and Final Expense Life Insurance
Most of the time, individuals who are applying or paying for final expense insurance are senior citizens. The small benefit amounts and affordable premiums allow final expense policies to cover funeral expenses within a retiree’s budget.
Unlike traditional life insurance policies, final expense coverage does not replace the insured’s income. It is a smart way to cover funeral costs and other end-of-life expenses that arise.
On top of standard life insurance, burial insurance is an extra safety net. This way, seniors can protect their families from financial burdens that may come up upon their departure.
Unfortunately, funerals are financially burdensome. The average funeral
cost ranges between $7,000 and $12,000 ($6,000 to $7,000 for cremations) and for many families, this is neither avoidable nor affordable.
Families and loved ones are already experiencing the grief and stress of losing a family member. The burden of paying for funeral services only makes the situation harder to cope with.
For this reason, seniors are taking care of the expenses for their own funeral services ahead of time with final expense life insurance. These policies ensure compassion. in the event of the insured’s death, they reduce misery.
Details Surrounding Final Expense Insurance
Seniors considering final expense life insurance may have questions they’d like to have answered. The most common questions are as follows.
- How are death benefits allowed to be used?
Though these benefits primarily cover end-of-life expenses, they can be used in any way that encompasses a final expense. Death benefits can cover burial costs, medical costs (such as hospital bills), mortgage payments, or anything the insured left behind.
- Is there an expiration for the policy?
No. As long as you pay the monthly premiums, the policy does not expire. It is a type of whole life insurance policy, not a term policy.
- What does a final expense insurance policy include?
These policies can vary between companies, so always ask questions about what the quote includes before purchasing. Funeral coverage can include accidental death coverage, support benefits, or even child riders.
- Does it require a medical examination?
Most of the time, there is no need to go through a medical exam for coverage of less than $50,000. However, the insured is going to need to answer health questions on the application.
Costs Associated with Final Expense Insurance
Final expense premiums cost between $30 and $70 per month, depending on the coverage amount and other individual factors.
For older applicants, however, monthly premiums could run up to $120 per month.
Therefore, it’s a good idea to apply for final expense coverage before turning 70. ]Younger, healthier applicants can expect to pay the cheapest burial insurance for as little as $20-$50 per month. Shopping around a little early is in an applicant’s best interest.
While many people focus on the price they’ll pay for coverage, it’s also important to verify that the insured is getting their money’s worth.
Examine a policy and determine exactly what’s included in the coverage package. Compare the features and coverage offered with the premium price. If the cost is too high and the included features are too low, it’s time to seek a better quote.
Should You Buy Final Expense Insurance?
In most cases, final expense life insurance is a smart choice for the elderly.
This type of coverage allows seniors to protect their families and their loved ones should they die. With this policy, the family can focus on taking care of each other instead of focusing on financial worries.
It’s also important to note that while the benefits are expensive, they can save a great deal of money in the long run. Many funeral bills aren’t covered by health insurance or medical insurance plans. Final expense policies can provide some relief and peace of mind when it comes to end-of-life expenses.
The Advantages
There are many advantages to purchasing final expense life insurance.
For one, the this type of life insurance can greatly help reduce stress. Life insurance policies can help ease the financial burden of the death of a loved one.
Additionally, though the final expense insurance is known to mostly geared towards relieving burial expenses, the life insurance beneficiary can also use it for other related bills, such as paying off any medical debt or other healthcare costs that led to your death.
Final expense life insurance can also be beneficial for the insured. Seniors who want to leave something behind for their families may benefit from this type of coverage because it allows them to provide for their loved ones without putting a great deal of strain on their own finances.
It also has a faster approval process. While it is normal for life insurance companies to take up to two weeks to process applications, final expense life insurance applications can be approved in as little as a few days.
The Disadvantages
There are some disadvantages that come with purchasing final expense life insurance.
For one, there is no guarantee that the applicant will be approved for coverage. Many companies may reject applicants for this type of coverage due to their health history or age.
So, it is very important to review the conditions of coverage before applying for these type of insurance premiums.
For example, a final expense life insurance company usually has age requirements set in place. Others may require the insured to go through a medical exam or at least provide answers to health questions.
Also, many applicants who apply for final expense life insurance may be denied coverage because they don’t have enough financial resources available at the time of application.
In most cases, this is not an issue because you can always purchase another policy once you’ve been approved. This means you can always have some kind of financial protection in case your first application is denied.
Best Final Expense Life Insurance Companies
This list of the best final expense life insurance companies is meant to be a helpful resource for anyone looking to purchase this type of coverage.
1. Mutual of Omaha
This company has an A.M. Best rating of A+ (superior) and a Better Business Bureau rating of A+. It doesn’t have a 2-year waiting period, but your application may be subject to underwriting approval.
Their premiums stay the same forever, and you can build up cash value. The coverage offered ranges from $2,000 to $40,000.
The age range for new applicants is between 45 to 85 years old, and there’s no medical examination required aside from some health questions.
2. AIG
This company has an A.M. Best rating of A (excellent). While it has a 2-year waiting period, the premiums stay forever and the policy never expires. They provide coverage ranging from $5,000 to $25,000. You can also build up cash value.
The age range for new applicants is between 50 to 80 years old. There’s no medical examination required, and the acceptance is guaranteed.
3. Transamerica
This company has an A.M. Best rating of A (excellent). Like the Mutual of Omaha, it doesn’t have a 2-year waiting period, but your application may be subject to underwriting approval.
It builds cash value and the premiums will not expire. The coverage ranges from $1,000 to $50,000, which may vary depending on age, and they offer optional riders for accidental death.
The age range for new applicants is between 45 to 85 years old, and there’s no medical examination required aside from some health questions.
4. Gerber Life
This company has an A.M. Best rating of A (excellent). While it has a 2-year waiting period, the premiums stay forever and the policy never expires. It also builds cash value.
They provide coverage ranging from $5,000 to $25,000. The age range for new applicants is between 50 to 80 years old, and there’s no medical examination required at all.
Each company has its own advantages and disadvantages, so always make sure to ask the company about their specific application requirements. This way, you can find the best final expense life insurance policy for your needs.
Final Thoughts
Final expense life insurance is a good option for many seniors looking for some extra protection for their families and loved ones should they pass away.
It‘s important to shop around for quotes before making a decision though, as prices vary greatly between companies and even from one state to another.
Refer to a licensed agent or financial advisor so you can get the cheapest burial insurance without sacrificing certain features. Expert advisory services will help you comb through the available funeral insurance policies so you can get the best bang for your buck and bring your family peace.
