Ultimate Guide To Final Expense Life Insurance
What Is Final Expense Insurance?
Final expense life insurance, also known as burial insurance, is a type of senior whole life insurance meant to help cover end-of-life costs. They are typically available to seniors ages 50-85, and most insurers offer $35,000-$50,000 in coverage on the high end.
Since it’s whole life insurance, you can trust that your policy will last a lifetime. Also, the premiums will never increase as you age, and the coverage won’t decrease in value. In addition, they build cash value that you may borrow from as it accrues.
How Does A Final Expense Policy Work?
When you die, the insurance company will pay your beneficiaries a tax-free cash payment which they can spend with no restrictions. Claims are typically paid within 24-48 after a claim is approved. If your loved ones don’t use all the money for your final expenses, they keep the remaining amount.
To file a claim, your family only needs to contact the insurer via phone to notify them of your death. They’ll have to provide a death certificate and sign a beneficiary form. Then the insurance company will have what they need to process the claim.
How Do You Qualify?
First, final expense life insurance plans never require a medical exam.
Knowing that seniors generally develop health issues over time, these plans were designed with that in mind. Burial insurance underwriting is not as strict as traditional life insurance options. That allows clients to qualify for a new policy even with health challenges. Moreover, most seniors are eligible for coverage with no waiting period.
There are two main types of coverage: “Simplified issue” and “guaranteed issue.”
- Simplified Issue: You have to answer health questions. In addition, the insurance company will review your prior prescription medications. This option can have no waiting period where you’re fully insured for natural or accidental death the day you make your first payment. It can also have partial coverage (often called a “graded plan”). A partial coverage plan will pay out a portion of the death benefit during the first two years. For example, graded plans commonly pay out 30% during year one and 70% during year two. After two years, 100% of the death benefit will payout.
- Guaranteed Acceptance: This type of plan has no health questions because your approval is guaranteed. Generally, they are for people experiencing significant health issues such as active cancer, dialysis, or oxygen usage. Guaranteed acceptance coverage does come with two significant drawbacks. First, they always have a waiting period of two years. If you die of natural causes during the waiting period, the insurance provider will only refund your premiums plus a tiny amount of interest (typically 5-10%). Secondly, plans without health questions are more expensive because the insurance company knows nothing about your health. It’s risky to insure someone’s life when you don’t know anything about their health. Like any form of insurance, a higher risk always equates to higher insurance costs.
How Much Does Final Expense Insurance Cost?
Insurance pricing is always based on age, gender, state of residence, and health. Most seniors can secure a burial insurance policy for $10,000 that costs $50-$100 monthly, depending on the factors mentioned above.
The table below has some sample monthly prices (non-tobacco).
| Age | Female $10,000 | Male $10,000 | Female $20,000 | Male $20,000 |
|---|---|---|---|---|
| 50 | $24 | $30 | $44 | $56 |
| 55 | $27 | $35 | $51 | $67 |
| 60 | $32 | $43 | $61 | $83 |
| 65 | $40 | $53 | $77 | $104 |
| 70 | $52 | $69 | $102 | $135 |
| 75 | $70 | $97 | $138 | $190 |
| 80 | $97 | $134 | $191 | $264 |
| 85 | $131 | $187 | $259 | $371 |
Why Buy A Burial Policy?
With funerals being the third largest expense in a lifetime, you do not want to leave this burden on a loved one. According to the National Funeral Directors Association, the average burial service costs nearly $10,000. They also found that a cremation service costs almost $7,000.
Giving yourself and your family peace of mind with a final expense plan is priceless. Having a burial plan in place relieves your family of a financial burden and allows them to grieve.
With a quick payout and no probate delays, it’s the best way to ensure the least amount of stress (emotional and financial) for your loved ones. You can leave a legacy rather than a burden.
Contact Creative Legacy Group For Help
Creative Legacy Group is an independent broker representing multiple insurance companies. We work for you, not for the insurance companies.
Our goal is to find you whichever plan best suits your needs, regardless of which insurance company it is with. We aren’t partial to any particular insurer. We only care about finding you the lowest price and coverage with no waiting period (if possible).
In the famous words of Ben Franklin, “in this world, nothing is certain except death and taxes.”
Contact us at 855-306-5596, and one of our agents will assist you.
