Are you researching life insurance coverage, or planning for your passing? There are dozens of terms that you may come across that you don’t fully understand. It’s important that you know you have adequate plans in place and you’re getting the insurance coverage that your family needs.
Once you start planning, a key term that you’ll hear a lot is “final expenses”, but there are thousands of applicants that don’t understand what that means and what’s included in that category. Let’s dive into final expenses and some of your options for covering your final expenses.
What does Final Expense Insurance Cover?
These final expenses are any of the bills that your family is going to be left with at the time of your death. While you may not realize it, there are probably dozens of fees and expenses that you hadn’t account for.
These “final expenses” can be anything from your burial costs to lawyer fees. They could also include less traditional costs like movers’ fees or any credit cards bills that are left behind.
After you pass away, you’re going to leave behind a lot of bills and other debts. All of those bills are going to be left with your family, which can make the situation thousand times worse.
The best way to ensure that you don’t leave your loved ones with a mountain of debt is to have an insurance plan in place that will give them the money that they need to pay off any unforeseen final expenses.
Insurance Options for Final Expenses
Because we are talking specifically about final expenses, we are going to discuss final expenses life insurance policies first. These plans can be an excellent fit for thousands of life insurance seekers.
These plans are going to provide a much smaller of coverage, but that doesn’t mean that you should automatically discount them from consideration.
A final expense plan (sometimes called a burial insurance plan) typically only offers around $25,000 worth of insurance coverage for your family, which means that these plans aren’t going to be a good choice for a young couple with a lot of debt, but if you’re an older applicant that doesn’t hold much debt anymore, this product allows your family to be left without any final expenses.
Because these plans provide less coverage, they are going to be much easier to purchase versus a traditional plan. With a final expense policy, you won’t have to take a medical exam, which means that you can get life insurance coverage much quicker.
Another option is to get a traditional term insurance plan, which is super common for the average American. Purchased with a date attached to the plan, and once your term expires you are left without coverage and will have to buy again.
These plans typically offer much more coverage which will give your family the money that they need to cover all of the final expenses that you were to leave behind. Term life policies typically last from ten to thirty years. The great thing about term life is the flexibility of length and face value.
Another option is to purchase a whole life insurance plan. Whole life is a type of permanent life insurance and it will remain effective throughout your lifetime. Remember to keep the payment consistent with whole life because if you fail to keep up with it the policy will lapse.
These plans are permanent coverage, the premium price could be more shocking for an older couple.
The last option that we will look at is a no medical exam. These policies will let you buy a plan without having to take the medical exam first, but unlike a final expense plan, you can get much more insurance protection that will cover more than just a burial. Most life insurance companies will sell you a no medical exam that gives $250,000 worth of life insurance protection.
You can learn more about specific life insurance companies by reading our reviews such as our Colonial Penn Life Insurance Review.
Calculating Final Expenses
Before you apply for any life insurance plan, it’s important that you determine how much coverage your family will need when you do pass away. Here are some financial criteria to keep in mind when looking at your life insurance needs.
Number one, you should look at is any debts or other outstanding expenses you’re responsible for. This is anything from your mortgage payment to car loans.
The primary goal of your life insurance coverage is to give your family the money that they need to pay off the mountain of debt that you would leave behind.
Another category to put in the calculation is your salary. If you have someone that relies on your income to pay for necessities, they would suffer without your income. Buying enough life insurance secures a smooth transition in the years to follow your death.
Additionally, you’ll need to consider the true final expenses (remember, the topic of this article). This is going to include burial expenses, which can cost around $10,000, any lawyer expenses, taxes, and anything else that your family would be required after you pass away.
All of these bills can drain an inheritance or a small policy. In some cases, these bills can drain a small burial insurance plan and leave your family with leftover bills.
Final Expenses and Life Insurance
When you’re looking to get insurance coverage to pay off those final expenses, it can be an overwhelming search. There are several kinds of policies and thousands of companies that you can buy the plan from. Don’t take time away from your grandkids and hobbies, let our company do the leg work for you.
Unlike a traditional agent, we work dozens of insurance companies across the nation. Even if you have a pre-existing condition like diabetes, we can help you find the best life insurance plan to meet your needs.
We have no control over the arc of life. If a sudden loss occurred tomorrow would your family be protected for the future? If you’re not sure then give us a call and make sure you have peace that no burden of debt will cripple your families current lifestyle.