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What is Final Expense Life Insurance?
Final expense insurance is a whole life policy that can be used to pay medical bills and funeral expense when you die. It’s also known as burial or funeral insurance. It’s a very popular choice among seniors.
Most final expense plans have these features:
- Whole life insurance – can’t be terminated as long as premiums are paid
- Cash value – the insured may be able to take out a policy loan
- Fixed premiums as long as they’re paid. Never increase
- Simplified issue – usually no medical exam (also called a life insurance exam) is required, just health questions on the application
- Some Final Expense policies are Guarantee Acceptance. No medical exam or health questions
- Easy application process
- Fast approvals – coverage can often be issued in days
- Affordable rates
Final Expense Life Insurance For Seniors
Final expense life insurance is popular with seniors because of its affordable price, smaller benefit amounts, and emphasis on covering funeral costs.
Traditional life insurance policies such as term insurance are primarily intended to replace any income lost when a loved one dies. These policies are most important to families during the earlier years when we’re working, paying a mortgage, making car payments, and raising a young family.
Once we’ve retired, paid off the house, and the kids are out of the house, traditional life insurance policies aren’t as necessary. What we do need is a way to pay for any expenses we leave behind when we pass.
According to the National Funeral Directors Association, the median cost of a funeral can be over $9,000. With no way to pay for these expenses, surviving loved ones often experience a financial burden during a time of intense grief.
Many of us have experienced the death of a loved one and remember how stressful it was to juggle our grief, the funeral planning, and the financial obligations placed upon us. The thought of our spouse or children going through the same experience is unbearable.
So how can final expense life insurance help? What can we do to protect our families from this financial burden? How can we make sure they aren’t left with a pile of bills when we pass? Ultimately it all depends on how much you care!
Burial insurance for seniors is a smart insurance solution for seniors looking to protect their loved ones from rising funeral costs. It’s generally easy to qualify because it’s issued based on answers to health questions. In many cases, you don’t need to take a medical exam.
For those that don’t qualify for simplified underwriting burial insurance, a guarantee issue (acceptance) policy is a viable option. You can’t be turned down and premiums will never increase.
Typical Questions Seniors Have About Final Expense Insurance?
Qualifying for a final expense policy is often easier than qualifying for other types of life insurance (such as term insurance). Be sure to ask these questions:
- Does the policy expire?
- Do I have to take a medical exam?
- What features are included in the policy?
- How can the death benefit be used?
Does the policy expire?
Final expense policies don’t expire like term policies because they are a type of whole life insurance. Your coverage remains in force as long as you pay your premiums.
Do I have to take a medical exam?
In most cases, a medical exam isn’t required to qualify because the face amount is typically under $50,000. Coverage is usually issued based on the applicant’s answers to health questions.
What features are included in the policy?
Depending on the life insurance company, your final expense policy may have added features such as child riders, accidental death and dismemberment, or support benefits for surviving loved ones such as funeral price shopping. Not all policies are the same, so make sure you review the policy’s benefits carefully.
How can the death benefit be used?
The hardest thing we must ever face is the death of a loved one. On top of this, surviving loved ones are often left to handle any end-of-life medical expenses and funeral costs. These expenses can add to the sense of grief and stress surviving friends and family members feel. Final expense life insurance was created to prevent this added pressure.
Even though final expense insurance focuses on covering funeral costs, the death benefit can be used for anything: medical bills, credit card debt, mortgage payments, etc. How the death benefit is spent is ultimately up to the beneficiary of the life insurance policy.