There’s not easy way to put this. Dying ain’t cheap.
The average cost of a funeral is around $7,500. Which can be a heavy financial burden on the family of the person who passed.
These high costs are one reason that final expense insurance is becoming a more popular life insurance option. Also known as funeral insurance or burial insurance, final expense insurance is a type of life insurance policy.
Flexible Life Insurance Plans
One of the benefits final expense insurance is its flexibility. Yes, you can use it to cover funeral-related expenses, hence the name. It can cover funerals, embalming, cremation, a memorial service, and a casket. However, it can also be used to cover other expenses such as outstanding debts, probate fees, taxes and more.
No Medical Exam Required
Another benefit of final expense insurance is that it does not require a medical exam. This makes it much easier for seniors to get approved for a policy. Usually all that’s required is that you answer a few health related questions.
While there’s no guarantee you’ll be approved for a final expense life insurance policy, it’s much easier to get one than many other types of policies that do require a medical exam. This makes final expense life insurance ideal for those with health problems or who are in their senior years.
Death Benefits of Burial Insurance vs. Whole Life Insurance
Final expense insurance policies can either be bought as term policies or as whole life policies. If it’s bought as a whole policy, then the policy can increase in value over time. This is because in a whole policy, part of your premiums go into basically a savings account. You are even able to borrow from this account if you need to . However doing so will reduce the death benefit of the policy.
Premiums for Final Expense Insurance
As with all life insurance policies, the cost of final expense insurance depends on the level of coverage you want. The usual costs for a $10,000 final expense insurance policy is around $60 a month. It may sound like a lot but generally these policies cost less than funeral expenses do.
Typical policies have a death benefit that ranges from around $5,000 to $25,000.
When deciding how much of a policy you need there are a few factors to consider. Consider your estimated household expenses, and what type of funeral service you want. You should also take into account the inflation rate.
Pros and Cons of Final Expense Insurance
Pros:
- Applicants with health issues are welcome to apply
- Medical exams are not required
- Fixed policy premiums
- Guaranteed death benefit
- No-expiry policy
- Death benefits are not taxable
Cons:
- Lower death benefits compared to whole life insurance
- Missed premium payments can lead to termination of policy
Final expense insurance is a great option for those who may have some health issues and have trouble qualifying for other types of life insurance. It’s also a great option for those who want to make sure their loved ones don’t experience financial hardships due to funeral costs.
