Final Expenses Life Insurance CoverageYou have various options to meet your needs regarding life insurance coverage. Final expense insurance is an excellent option for individuals looking to cover final expenses and burial costs. Also known as burial or funeral insurance, this type of coverage is designed for older adults who want to make end-of-life plans.
Final expenses life insurance policies are typically reserved for individuals age 50 to 86 years of age.
What Do I Need to Know About Burial Coverage?Most burial coverage is purchased as a guarantee to pay for end-of-life expenses. Since the coverage doesn’t require a medical exam, it is an excellent option for older individuals and those with health concerns.
Burial coverage premiums are typically higher than most other policies with a lower payout. However, they give you peace of mind that your funeral expenses are paid for when you pass away. If you are considered high-risk for insurance carriers, burial coverage may also be an excellent option for life insurance coverage.
What Do Beneficiaries Pay for with Final Expense Coverage?Most beneficiaries use burial coverage to cover end-of-life costs, such as funeral expenses. As the average funeral cost continues to rise, many policies only provide enough funds to cover embalming, ceremony, and burial. According to the National Funeral Directors Association, these costs can run more than $10,000.
Some of the common expenses covered by this type of policy include:
● Funeral home fees
● Viewing, service, and memorial expenses
● Transporation fees
● Burial expenses such as plot, grave marker, and casket expenses
● Cremation costs
● Embalming costs
● Officiant fees
● Other funeral expenses such as flowers and music
Although the payout for this type of insurance is typically used to cover these costs, the funds are not restricted. Other common uses include:
● Medical bills
● Hospice care
● Nursing home costs
● Credit card, auto loans, and other debts
● Day-to-day expenses
● Children or grandchildren inheritance
Affordable Final Expense Life Insurance to Protect Your FamilyUnlike whole and term life insurance policies, final expense life insurance is easier to qualify for because it’s intended for older adults. Approval happens nearly immediately, and you won’t need to commit to a doctor’s exam. Once you lock in your coverage, you’ll be covered for your entire life if you continue to pay your premiums.
The two main types of final expense insurance include:Simplified Issue
This is considered the best type of permanent insurance, especially for those with minor health issues. While you won’t have to commit to a medical exam, you will be required to answer a health questionnaire before you are approved. This helps determine your risk level, premium rates, and coverage options.
Guaranteed issue works best for individuals with severe health conditions. It’s most commonly used by those who don’t qualify for any other type of life insurance. You won’t have to undergo a medical exam, answer health questions, or meet additional health requirements. Instead, you’ll pay higher premium rates for lower coverage amounts due to your risk.
While it’s not always the most desirable option, it gives you the protection you and your family need when other opportunities don’t exist. You should also keep in mind that these policies do not typically pay out until your policy has been active for a certain length of time. If you pass away before this time, you’ll receive a lower payout, or your family will be refunded the amount you’ve paid in premiums.
How Much Coverage Will You Receive?Most policies range from coverage amounts of $5,000 to $35,000, depending on your policy. Before choosing the amount of coverage you’ll need, talk to your life insurance broker to select the right plan for your needs. Make sure you pay your monthly or annual payments to keep your policy active. If it lapses, your family won’t receive the payout when they need it most.
You can also talk to your local funeral home to determine how much coverage you need before meeting with a broker. Some businesses will let you secure your end-of-life expenses through a contract ensuring your family will do business with them when you pass away.