Final expense insurance is an option for people unable to obtain traditional life insurance. Insurance companies are hesitant to cover the elderly or younger people who have a history of illness. Some insurance companies will consider the application, but others automatically reject the sick and elderly without any consideration. As a result, people in this group often can’t obtain policies for traditional term life insurance and whole life insurance. But there is an option for when all else fails.
How Final Expense Insurance Works
If age or an illness prevents someone from purchasing traditional life insurance, then final expense insurance is an option. The applicant doesn’t usually have to meet any specific age or health requirements to qualify for final expense coverage. Applicants won’t have to worry about the insurance company investigating their health or requiring a medical exam. Usually all it takes for approval is answering a few questions.
Most people will need help paying for burial expenses. The cost of a funeral, casket, or cremation can cost thousands of dollars. This is why life insurance is recommended for most people. It just makes things much easier on surviving family members and loved ones. But the money is useful for more than just paying final expenses.
Beneficiaries can use the money to pay bills, replace lost income, pay for the deceased’s children’s education, and more. Life insurance basically makes handling affairs easier on loved ones as far as finances are concerned. Without any coverage at all, surviving loved ones could possibly face not just a financial struggle, but an emotional one, too.
The Cost of Premiums
Another benefit of final expense insurance is that sometimes it is more affordable than traditional coverage. The trade-off is that a final expense policy provides less coverage then other types of policies. Most final expense policies offer $5000 up to $25,000 worth of coverage. That won’t go too far for long-term expenses, although this lower coverage is usually sufficient if burial expenses are a primary concern.
If you’re looking for a policy, the exact cost will typically depend on your age. An insurance company likely won’t reject your application, but they generally base premiums on age. The older you are, the greater the odds you’ll pay more in premiums. That’s because the insurance company considers older people as more of a risk. A 45-year-old person of questionable health would still pay less than a healthy 75-year-old person.
It also helps to choose your beneficiary with care. The beneficiary is the person who is ultimately in charge of the money your designated family members receive. Although the money is for final expenses, the beneficiary has some leeway on how the money is spent. Choose a beneficiary who you are certain will use the money as intended.
Tips for Finding Reliable Coverage
To get started, it is always a good idea to calculate an estimate of how much coverage you want and can afford. This will help when you start to review specific policies. Ideally, you’ll want enough coverage to at least help pay for your funeral or cremation. You can check different funeral homes to get an idea about average funeral expenses. The National Funeral Directors Association is also a good place to check. The next step is to comparison shop to find the best available deals and coverage for your specific needs.
You’ll probably want to start your search online. That allows you to easily compare several policies and insurers in the comfort of your home. Several well-known insurance companies offer final life insurance, and most of them have easily accessible websites. But you can also consider using a quoting site. These sites don’t directly sell insurance, but they will provide price quotes and policy information. You can then choose which insurers you want to speak with.