Final Expense Insurance: The Basics
By retirement age we have seen ads for tens of thousands of insurance products – whole life, term life, and universal life policies – each one more confusing than the next in an endless parade. Many of us bought policies when younger, perhaps more than one policy, paid them faithfully and still have them. A goodly number of us did not buy coverage early on, or in financial or health distress may have lost insurance coverage.
Final Expense Insurance is made for the mature among us who are concerned about the welfare of those we will leave, and who will make plans for our inevitable ending. Final Expense Insurance is more flexible than burial insurance coverage which is limited only to burial expenses, it gives survivors freedom to apply the policy benefit to medical debts, legal costs, or other expenses as they see fit.
“Average” Funeral Costs Vary
Total costs of funeral services are reported sporadically, contain numerous variables, and vary significantly across the country. It would be poor planning to rely on the “average funeral cost” of $6,000-$8,000” as reported by the government; those figures are years out of date and don’t indicate regional differences very well. Rural areas may well have lower costs for funeral services than indicated while urban areas could easily be more than double these amounts!
Find out for sure, question your minister or your friends about actual costs in your area. Make sure that you discuss with them the cost of products and funeral-related services that are appropriate for your personal financial circumstances. It is not a light and pleasurable experience to consider our own passing but consider it this way – by planning and taking action now your family and loves ones will not have to wrestle with difficult issues at a very difficult time.
Easily Issued Insurance – Guaranteed
Final expense policies come in two flavors – simplified issue and guaranteed issue. This division of policy types helps insurors understand their level of risk and as a result keep their rates low.
Guaranteed Issue final expense insurance policies turn down no one – everyone 50 to 80 years of age who applies will be covered – no medical questions asked and no medical exam needed. Too good to be true? Well not really, there are two drawbacks to guaranteed issue coverage: first your costs will be higher because the risk to the insurer, your health, is an unknown, and second the policy’s face value benefits at death may not be payable immediately.
Typically policies which guarantee issue require a vesting period of up to 3 years during which full benefits will not be paid. Should the insured person pass away before the vesting period is over the policy will only return the premiums already paid in, most often with interest added.
Final expense insurance plans called simplified issue do ask questions about your physical condition but they are written to allow older people with reasonable health to be covered. The monthly premiums will be lower than the “guaranteed” policies and full face value benefits are payable immediately – no waiting period is required.
Plainly put, you do not have to answer questions about your health. If you choose not to answer then insurers will ask higher premiums for the unknown, presumably higher risk and impose a waiting period for the full benefits to become payable. A simplified issue policy would be smarter if you can qualify – you will save money every month and be covered immediately.
FILL OUT THE FORM AT RIGHT to learn what suitable policy might cost you. There is no obligation.
Related posts:
- Final Expense Insurance – Study The Benefits
- Baby Boomers Are Looking to Final Expense Insurance
- What Is Burial Insurance?
- Final Expense Life: Security For Seniors
- Two Types of Burial Insurance
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