What Are End-of-Life Expenses?

Many Americans are not aware of true, long-term healthcare costs. Funerals can cost upwards of $7,000, depending on the services provided, but you can prepare for end-of-life costs.

Some end-of-life costs to consider include:

• Nursing home care
• Memory care
• Assisted living care
• In-home care
• Doctor visits, hospital stays, and operation costs

Final expense, also known as burial insurance, is designed to take care of end-of-life costs.

The death benefit of burial insurance is used to cover medical bills, end-of-life expenses, like burial or cremation, and items like coffins and urns. A burial insurance policy remains in effect for the remainder of your life, and your beneficiaries receive the death benefit as long as you pay your premiums.

Types of final expense insurance 

Guaranteed issue life insurance provides some form of coverage for individuals who may not be eligible for other insurance options due to age or health. Most individuals who apply for a guaranteed issue plan usually cannot be turned down unless they are below or above the age bracket requirement. 

Simplified issue life insurance is designed for people who need to procure limited life insurance immediately without the 4- to 8-week moratorium typical for policies that are conventionally underwritten and requiring a medical exam. With a simplified issue contract, you don’t need a medical examination. You can obtain coverage within days – not weeks or months.

How much does a final expense insurance policy cost?

Since there is no medical exam involved, and because final expense policies are created for older, less healthy buyers, burial insurance costs are significantly higher when paralleled with term life insurance. When you are taking out a final expense life insurance plan, you might end up paying about the same amount as a term plan, but for ten times less coverage.

At a glance, here are some costs for a guaranteed issue, simplified issue, and term life policy for a 60-year-old.

Guaranteed Issue Life Insurance:

• Duration: N/A
• Coverage: $25,000
• Monthly Cost: $172.22

Simplified Issue Life Insurance:

• Duration: N/A
• Coverage: $25,000
• Monthly Cost: $104.60

Term Life Insurance:

• Duration: 10 years
• Coverage: $250,000
• Monthly Cost: $78.57

Getting final expense coverage

Securing a final expense insurance plan is usually easy. After a phone call verifying that you can pay premiums and don’t have a terminal illness, you will be sent final policy documents and can make your first premium payment. Expect to provide your social security number, payment details, and driver’s license number.

The entire process can be completed within a day with an agent at Senior Life Services. You can always find the best deal with us for all your final expense policy needs.

Should you prepay funeral expenses?

Setting money aside to cover a funeral expected expense is a wise thing to do, and a funeral is no different. Today, more than ever before, more and more people are preplanning their funerals to save their loved ones the stress of having to do it during an emotionally overwhelming time. When you make your arrangements, it saves you money because you can choose the specific services you want.

However, not all prepaid funeral agendas make sense financially.

Purchasing a funeral plan from a funeral seems like a noble and compassionate thing to do, but in truth, most experts agree that there are too many risks involved with prepaying for your funeral and working closely with a funeral home.

In fact, state and federal authorities have interviewed funeral homes and prepayment providers and have found shocking violations of trust because these plans do not have administrative oversight. An unscrupulous funeral home will misspend and misappropriate your money. Some will even fold before the prepaid funeral service is due. Others sell bloated plans that are practically worthless. Federal authorities passed the Funeral Rule in 1984 that protects the consumer, but state laws are different from one another, and some states provide less protection than others.  

What expenses does a prepaid funeral cover?

A prepaid funeral policy is a personalized plan created to include the goods and services you desire for your funeral. For instance, you can include funeral home services, flowers, transportation, and anything else you require. After you have made a list of everything you want to be included in the policy, the funeral home director gives a quote, which will serve as a baseline for your policy.

What are the prepaid funeral plan options?

If you decide to go with a prepaid funeral plan, you may be presented with the following options:

• Whole-life policy – with a whole life policy, your beneficiary receives the payout to pay for funeral expenses upon your demise.
• Burial insurance – this covers the cost of all expenses when you pass. The beneficiary can use the death benefit however they please.
• Revocable trust – when you create a revocable trust, you will often sign an agreement to pay for your funeral installments. The funeral director sends your contributions to an interest-yielding account. At the time of your passing, the funeral director, or whoever you have selected, uses the funds to pay for your funeral.
• Irrevocable trust – this enables you to prepay your funeral costs in installments like a revocable trust. However, unlike the revocable trust, the irrevocable trust is a permanent trust that cannot be changed by the creator. The beneficiary is the only person that can make changes to it once it is created.

Want to find out more about your options for burial insurance? Then talk to the experts at Senior Life Services. We provide guidance and direction through the most complex insurance policy concerns. Through our far-reaching network and expertise, you can be rest assured knowing that you’ll get the right coverage for your unique needs. Contact us today to get started.