Final Expense Insurance: Dying With Dignity
As with everything, the cost of one’s final expenses is increasing. Rather than be a burden to your loved ones, a permanent insurance policy, such as a final expense whole life policy is available to cover all costs associated with funeral and other expenses after we pass. No one wants to leave behind expenses to our family, and some simple planning can relieve those burdens. Final expense insurance coverage is nothing more than a whole life (permanent life insurance) policy that is there when your loved ones need it most.
How Does Final Expense Insurance Work?
First off, final expense whole life insurance is a form of non-participating whole life. Non-participating whole life is issued by both mutual companies and stock companies. Examples of stock companies would be Transamerica, Protective Life, etc. These non-participating policies do not pay dividends. They do accumulate some cash value, but it’s all guaranteed and is minimal. They are also less expensive because they don’t pay dividends. There are three guarantees with non-participating whole life policies.
- Guaranteed death benefit protection
- Guaranteed fixed premiums
- Guaranteed cash value accumulation
There are really no moving parts to non-participating whole life. Simply pay the fixed premium every month, and there is a guaranteed death benefit when your loved ones need it.
How is Final Expense Whole Life Different?
What sets a final expense policy apart from other whole life policies is that it was designed for the specific purpose of covering final bills and funerals. This is why the dollar amount coverage for final expense insurance is lower than other policies and also why the age and health requirements are more flexible.
Final expense policies are written for amounts anywhere between $1,000 and $50,000 and usually have fewer available rate health classifications (Preferred, Standard, etc.). These types of policies require less scrutiny by the medical underwriter and allow for a less stringent underwriting process. Older and less healthy consumers can apply and often gain coverage, with minimal underwriting. There are no hospital exams or parameds (mobile nurses that come to your home or office) as there are with more traditional life insurance and there are no labs (blood and urine) collected by the examiner.
Final expense policies are a vital tool in planning for the end of life. With funeral costs increasing, life insurance can be purchased to take the financial burden off of the family.
It is often believed that Social Security will pay for those funeral costs, however, for those who qualify, the government will only pay a $255 lump sum. That won’t pay for any of it! According to one insurance company’s research, funeral costs can range from $10k to $25k depending on where you live and what services you would like included, and that’s just the funeral expenses!
How Affordable is Final Expense Whole Life Insurance?
As with all life insurance, premiums vary by age, sex, and health. But the following are a few examples.
Age 50 60 70
Male $81.23 $122.36 $249.34
Female $63.77 $93.14 $168.78
A fairly healthy 60-year-old male can make sure he doesn’t become a burden to his family for only $122.36 per month. Everyone’s situation is a little different, so make sure you’re speaking with a qualified professional who knows the different products and if they are the right fit for you
You May Be More Eligible Than You Think
Even if you think your age or health may be in question, these final expense products are designed to help many people, even those with health issues, gain the coverage they need quickly and easily and can be customized with various add-on benefits to your unique situation. If you are interested in learning more about final expense insurance, feel free to contact one of our team members to talk over your options.
