Many people view life insurance as a way of replacing their income after they die. Like having something in place to help out their surviving loved ones. However, it is not always about income.
Burials and funerals often cost a lot more than people think they do. So it is important to understand options like final expense life insurance.
There are a lot of different options for getting life insurance, each of them has different advantages and disadvantages.
Today we look at final expense life insurance and explore some of the different pros and cons of these plans.
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Do You Need Final Expense Life Insurance?
The real point of life insurance is ensuring your loved ones are taken care of after you die.
Being faced with unexpected bills after your death could definitely disrupt your family’s lifestyle, but not every person needs the sizable coverage that most life insurance policies provide.
For those applicants, a final expense insurance plan could be the best option.
What is Final Expense Insurance?
Final Expense life insurance refers to insurance used for covering the policyholder’s “final” costs, like burial, cremation, funeral, etc.
While these things may seem fairly simple, they can be surprisingly expensive. Caskets alone cost hundreds to thousands of dollars
With other traditional expenses added on, the average cost of a funeral today starts at $7,000.
Who Needs A Final Expense Policy?
The most common group is elderly applicants that are looking to offset the expensive costs of a funeral. This demographic doesn’t have a massive amount of debt, but will still leave their loved ones with around $10,000 in burial costs and other related fees.
Because a traditional life insurance policy is going to be expensive, and they don’t need that much coverage.
Another group that can take advantage of a final expense plan, is anyone that is looking to save money on their insurance policy. Because these plans are much smaller, applicants can save hundreds of dollars on their insurance premiums.
These plans will give a minimal amount of life insurance protection at a smaller cost.
How Much Does Final Expense Insurance Cost?
The premiums for these policies vary, depending on the death benefit value and the policyholder.
For example, a person in their 40s or 50s who is great health could end up paying around $20 per month, while someone over 65 with a medical condition could be charged a couple of hundred dollars a month.
We can offer you a more accurate life insurance quote here.
Fortunately, the good thing about Final Expense policy premiums is that they stay level for the rest of your life. There’s no need to worry about the cost suddenly going up in the future and leaving you unable to pay for it.
Final Expense Life Insurance Coverage
Final expense policies are really like most other life insurance policies, meaning you can get them in a wide range of coverage amounts.
However, with final expense life insurance, you can usually get a policy with a death benefit value as low as $5,000 and as high as $50,000.
There are several key categories that you will need to calculate before you purchase a plan. The first number to crunch is your debts.
Final expense life insurance policies are created for policyholders that don’t have a lot of bills that they would leave behind. Make sure that your plan will be large enough to pay off any debts.
The secondary goal of your policy is to help your family replace your source of income. Final expense life insurance is built for anyone that doesn’t have family members that rely on your income.
Is There a Waiting Period for Final Expense Insurance?
For many Final Expense policies, there is no waiting period for the death benefit to go into effect. This is especially true if you are in good health.
You can still get a policy if you have a pre-existing medical condition or aren’t in the best health, but be aware that there may be a waiting period. The exact length depends on the insurance provider, but it could be around two to three years for the full death benefit amount to go into effect.
After the waiting period is over, your plan is going to function like a traditional insurance plan, which means that if you were to pass away, your family will get the face value of the insurance plan.
These waiting periods shouldn’t impact your decision too much, but it’s something to be aware of.
Finding the Best Final Expense Insurance
There are lots of different factors that you need to consider when you’re trying to find the best plan to fit your needs.
It can be an overwhelming and confusing process to decide which plan is going to fit your needs the best. The first thing that you need to decide is if a final expense policy is right for you, and our agents can help you make that decision.
Before you purchase one of these final expense insurance plans, it’s important that you ensure that these policies will give you enough coverage.
A vast majority of policyholders across America are under-insured, which means that if something tragic were to happen to them, they would be left with a massive amount of debt and other final expenses.
Calculate Your Financial Needs
There are a couple of different categories that you should account for when you’re calculating your life insurance needs.
Taking your assets and debts into consideration is the first step.
If you were to pass away, friends and family are going to be responsible for all of your outstanding debts and any funeral expenses. Make sure that your life insurance plan is large enough to pay off those bills without draining your family’s bank account.
Your beneficiaries are not obligated to use the death benefit of a Final Expense policy for specific funeral expenses. Like other life insurance policies, your loved ones are free to use the payout in the way they see fit.
Another number that you should consider is any future expenses that your family will run into. If you looked ahead when buying your life insurance, your loved ones will have the money that they need.
Not having any life insurance at all is one of the worst mistakes that you can make for your loved ones. It would leave them with a mountain of debt and no way to cover those expenses.
You can request a custom quote using our online form on this page, but if you would like to learn more about Final Expense Life Insurance policies, give us a call today at 1-800-712-8519.