Traditional insurance policies focus on the benefits people can get during the early years of life. They mostly include mortgage payments, kids’ education, and car payments. But once you’re retired and paid off the mortgages, you don’t need life insurance policies. This is when the role of final expense life insurance policies comes into play as they can help you cover funeral costs.
Final expense insurance, that is to say, is a smart insurance solution for people who want to protect their families from increasing funeral costs. If you’re considering opting for a burial insurance policy, you need to know the top ten facts to maximize its benefits.
Top 10 Facts to Know about a Final Expense Life Insurance Policy
- It is a Whole Life Policy: The final expense life insurance policy is a whole life policy in which the insurance premium and the death benefit remains the same. It lasts for your life as a policyholder and doesn’t follow a specific time frame.
- Designed for After-Life Preparedness: Life insurance policies generally don’t address the costs families have to pay for a funeral. A burial insurance policy offers coverage for all these costs to reduce the families’ financial burdens from a typical cost like grave liners, transportation to headstones, and flowers.
- Easy-to Qualify: As the coverage cost is relatively lower than other life insurance, burial insurance, or life expense policy doesn’t require a medical examination to qualify. Its application process includes a prescription history and a questionnaire.
- Has Full Death Benefit: The insurer can’t decrease the death benefit included in the final expense policy unless a policyholder borrows against the cash value or requests accelerated death benefits.
- Guaranteed Death Benefits: The insurer guarantees the death benefits in final expense insurance as long as the policyholder pays the premiums. It is not a term policy, which is a typical feature of whole life insurance.
- Affordable for Everyone: Anyone can purchase a burial insurance policy with death benefits of $50,000 or less. That is all many people need or can afford.
- Freedom to Choose Beneficiary: With life expense insurance, policyholders can choose their heirs or beneficiaries who can use this death benefit for different purposes.
- 30- Days Age -Limit for Children: To buy final expense insurance for children, an individual needs to be 30 days older to obtain life insurance death benefits.
- Maximum Age to Apply for Final Expense Insurance: Although it depends on the insurers, many people can qualify for burial insurance until they are 85 years old. Some companies allow people to apply for final expense insurance over this age limit.
- Higher Rates for Smokers: Rates of burial insurance for smokers are 30% to 40% higher than non-tobacco rates. Regardless of the insurance policy you choose, the tobacco rate is higher. The older you’re, the higher the tobacco rates will be.
Bottom Line
All in all, the death of someone you love is a stressful and traumatic event. Funeral planning and financial obligations can make it even more taxing. The given facts about final expense planning can help you understand it better.
For more information, you can visit Senior Life Services and discuss your matters with our licensed representatives.