Final Expense

Final Expense Life Insurance is designed to cover the expenses that your loved ones may incur after your death. For example: these could be medical bills, funeral expenses or just something you want to leave behind for your loved ones. Final expense insurance is also referred to as burial insurance, since even a simple funeral can cost thousands of dollars.

None of us like to think about how our family will cover the significant costs associated with a funeral at a moment’s notice, but a final expense life insurance is a great product that your family can use to help cover those unexpected costs. Most final expense policies are written for people between the ages of 50 to 80 years old and certain carriers will write contracts up to 85 years of age. These policies also offer a death benefit usually from $2,000 up to the amount of $30,000.

After a person dies with one of these policies, the beneficiaries are paid the amount of these contracts upon the policy owners’ death 100% Tax Free! Depending on your current health, there are different final expense products to suit your needs. It is important to know the differences between these products as the savings could be considerable.

Guaranteed – Final Expense Life Insurance

Guaranteed Final Expense Life Insurance plans are designed for people that usually have poorer health conditions and are not able to answer the health or lifestyle question on a life insurance application. A guaranteed final expense policy means just that. You are guaranteed acceptance, but you will have limited death benefits in the first two years.

The two year limited death benefits usually means that because of your inability to answer the health or lifestyle questions on a standard life insurance application, the insurance carrier is exposed to more risk of you dying within the time period. That being the case, most insurance carriers offer these limited death benefits during the first two years of the contract. If you were to pass away during this period, that company will normally refund all your monthly premiums plus a fixed interest rate, but the death benefit will not be paid until after the second year.

Most carriers have a clause in the contract that if the death occurred due to an accident, then the death benefit would be paid per the contract and death benefit amount.

Because there is guaranteed acceptance in these products, the premiums or cost of insurance is normally a little more expensive compared to some other life insurance products. But the fact is, guaranteed final expense insurance can be a great solution to meet your needs.

Benefits:

  1. Guaranteed Acceptance regardless of health or lifestyle
  2. No Medical Exam Required

Simplified Issued – Final Expense Life Insurance

Simplified Issued Final Expense Life Insurance is similar to the guaranteed final expense other than it is not guaranteed and you do have to answer some simple health and lifestyle questions on an application. Being able to answer these health and lifestyle questions can result in a two-fold benefit to you.

Typically there are two rate classes’ for a simplified issued final expense policy. Those consist of either smoker or non-smoker, with the non-smoker rate class resulting in lower premiums.

Benefits:

  1. Monthly premiums will be lower compared to a guaranteed final expense policy.
  2. Death benefit acceptance is immediate and has no limited death benefits for the first two years.
  3. No Medical Exam Required

Another product that offers possibly double the death benefit for the same price as a Final Expense contract is called a Guaranteed Universal Life (GUL) policy. These policies usually continue to the age of 120. The only down side to a GUL is that Underwriting and a Medical Exam is required, but the savings could be worth asking us about it.

So whether you have health conditions that prevent you from getting life insurance or you are in pretty good health and just want to make sure that you have something in place for your loved ones to cover your final expenses, final expense life insurance could be a great product to meet your needs. Our Insurance Hub agents are always happy to help with any questions.