Final expenses are often too expensive to bear all of a sudden. An average burial can cost more than 8000 dollars, and cremation is no less than one thousand dollars of expenditure. This price can scale even higher depending on your ceremonial costs and the state you live in.
For people with limited savings and income, the final expense can add more pain to losing your loved ones. The entire family can fall into financial debt because of exorbitant final expenses. A final expense insurance or funeral insurance can help you resolve this problem.
Also called Burial or Funeral Insurance
Final expense insurance is also termed as “burial insurance” and “funeral insurance.” This insurance policy covers the cost of a funeral and medical bills upon the death of a person. Its death benefits can range from ten thousand to twenty thousand dollars.
Don’t stop here; there are more goods to find in the final expense insurance policy. This insurance avoids probates for hassle-free and quick money for your beneficiaries. Also, its premium level does not increase with your age. Most importantly, you don’t need any medical examinations to buy a funeral insurance policy.
To earn this death benefit, you have to pick the right policy from your insurance provider. Companies like Colonial Penn do not provide full coverage of death expenses unless you complete all premiums in its restriction period. Read this article to get more insight on such policies.
Before you buy final expense insurance, you should consider the below facts to find the best suitable option for your needs.
How Much Coverage Do You Need?
The total funeral expense depends on the funeral items you want and choice of burial or cremation. Cremation is more affordable but is a more sensitive area for families and friends. Most people go for burial options, and it is supported by people from different religions like Judaism, Christianity, and Islam.
If you decide on burial options, then you have a good number of burial items to consider the cost of. Break down the cost of these items to find a rough estimation of your funeral coverage. These are only an estimation, so take these figures with a grain of salt and make sure to do your own research. Some of these items include-
- Casket (2000 dollars to 10000 dollars)
- Headstone (1000 dollars to 3000 dollars)
- Plot/Niche (1000 dollars to 4000 dollars)
- Ceremony (1000 to 3000 dollars)
- Burial Vault (500 dollars or more)
- Viewing (500 to 1000 dollars)
These are only an estimation, so take these figures with a grain of salt and make sure to do your own research.
Other than funeral expenses, there are policies that also cover any lingering medical bills in the total coverage. You can get ideas about your medical expenses from a doctor’s consultation. Now, add all of the above up to find your estimated coverage for final expense.
Do You Have the Asset to Back Such Coverage?
The average final expense insurance is no more than twenty thousand dollars. Once you estimate your needed coverage, it’s time to find whether it is affordable or not. If you are picking high-priced funeral items, then your overall cost will increase.
Even if you own enough assets, final expense expenditure can eat up a big chunk of them, which can risk your survivors receiving any of it. Make sure you prepare a coverage that is affordable with your assets and that you don’t need a second mortgage for such an insurance policy.
What Are The Available Types of Policies?
Final expense life insurance has two basic policies to choose from. These are:
Simplified Issue Policy
Though final expense insurance does not require a medical examination, simplified issue policies normally have questions about your medical histories. They will try to know whether you have any pre-existing medical conditions like CVDs, if you smoke tobacco products or drink alcohol, and other risk factors. Based on that, they can either accept or decline your insurance application.
Simplified issue policies also have a level-benefits policy for your final expense insurance. Here, the insurer will get the same amount of dollars from the date of purchase. Even if there is inflation over time, the amount in policy will not change. Moreover, you will get a complete death benefit in accidental and natural death.
Robert Schmidt of Burial Insurance Pro notes ” there is no reason for a person to apply for coverage with any company, who uses medical exams for an approval. Simply avoid any life insurance company who requires this. Rather, focus on companies such as AARP and Mutual of Omaha burial insurance, who approve consumers in a matter of minutes, while not requiring any type of blood testing.”
Guaranteed Issue Policy
This funeral expense policy does not have any health queries to deal with. You can buy this at anytime regardless of your health conditions. Companies will charge more in this policy as they risk more money on your health issues.
Unlike the level-benefit policy, a guaranteed issue policy applies a modified benefit policy. With this policy, you will have to pay premiums for a period of not more than 36 months.
Your beneficiaries will receive the whole coverage upon completion of the restriction period premiums. Furthermore, they will get annually-compounded interests after the restriction period, which increases the total amount if you live for a long time.
However, this policy has some drawbacks. If you die before the restriction period is over, then your beneficiaries won’t get the full coverage. In case it is an accidental death, the company will provide full coverage even if the restriction period has not completed.
How to Find the Best Final Expense Insurance Provider?
There are hundreds of insurance providers offering final expense insurance policies. Which is the best policy for you? To find the answer, take some time to do some market research and compare deals.
Also, follow your specific state’s regulation for the final expense insurance policy. Different states have differences in funeral costs and rules for insurance companies. Check online websites and social media platforms like Facebook communities to get better insights into their final funeral insurance policy.
Other than that, read all the terms and conditions of the insurance company before accepting anything. Check their licenses from local and/or state authorities and customer reviews of their services. Most importantly, do not overlook their premium plans. Some companies even offer customizable premiums for maximum consumer satisfaction.
Another easy and simple way to find a quality insurance provider is by asking your family and friends who already have a final expense insurance policy. They can give a better insight in quick time.
How to Fix a Deal with a Final Expense Insurance Provider
Once you are done with market research, it’s time to finalize a deal for final expense life insurance. You can directly visit the insurance companies and call their agent. Read all terms and conditions and sign papers.
Make sure you name your beneficiaries and let your family members and friends know about it. File all the important documents and their customer care numbers. For an easy and hassle-free premium disbursement, connect your bank account to the insurer provider.
The final expense insurance policy is a great way to save families from a certain economic crunch. You should be able to leave your body on earth without troubling others. Consider the above-listed facts and choose final expense insurance to help save your survivors.
Interesting related article: “What is Insurance?”