As much as we strive to protect our families in life, we want to make sure they are taken care and not burdened after our death as well.
No one wants to think about it, but protecting your family from expenses and debt after you’re gone is an important consideration.
If you want to ensure your family does not suffer financially after you are gone, you may want to consider final expense insurance.
What is Final Expense Insurance?
Final expense insurance is a specific life insurance policy included under the umbrella of final life insurance, which includes many types of life insurance such as:
- Term life insurance
- Final expense insurance
- Universal life insurance
- Whole life insurance
- Variable universal life insurance
- Variable life insurance
- Guaranteed issue life insurance
- Simplified issue life insurance
- Group life insurance
Final expense insurance is a type of whole life insurance that pays a death benefit. It’s easier to get approved because there are no medical exams required.
Some other names used for the final life insurance policy are ‘burial insurance’, ‘funeral insurance’, ‘modified whole life insurance’, ‘simplified issue whole life insurance’ etc.
It can have a face value (or death benefit) of $2,000 to $50,000.
There is essentially no difference between final expense insurance and life insurance in general, except for the fact that the final expense insurance is a small scale and affordable policy focused to help your family and loved ones with the costs associated with your death.
This insurance, then, pays off some of the costs (such as medical bills, credit card debt, and funeral costs) that you choose from several options.
Here are two of the costs that final expense insurance will cover:
Government programs like Medicaid and Medicare only cover approximately two-thirds of healthcare spending by the elderly.
According to a study, healthcare spending for people aged 65 and over was something around $18,424 per person, per year.
The simple final expense life insurance can be of great help here.
The medical costs may include:
- Continuous home care is $855 per day. This is for the services during crises or at least eight hours a day.
- Routine home care is $146 per day. This is for generalized services that patients need.
- General in-patient care is $652 per day. This is intended for cares that cannot be provided in other settings.
- Inpatient respite care is $151 per day. This is to relieve unpaid caregivers occasionally. This care is designed for no more than five days at a time.
According to the NFDA, the funeral cost checklist included in the median funeral expenses in 2017 is as follows:
- Funeral home’s basic service fee (non-declinable): $2100
- Embalming: $725
- Transporting remains to the funeral home: $325
- Facilities and staff to manage a viewing: $425
- Preparing the body in other ways, such as makeup and hairstyling: $250
- Hearse: $325
- Facilities and staff to manage a funeral ceremony: $500
- Basic memorial printed package: $16
- Service Car: $150
- Metal casket: $2400
- The median cost of a funeral with viewing and burial: $7360
- Vault: $1395
- Cost with Vault: $8755
The above list demonstrates the need for a life insurance policy to cover these substantial costs.
Why Should You Buy Final Expense Insurance?
Choosing an insurance policy can be a confusing task, with decisions to be made about which policy to buy and which options to choose.
Here are some factors you should consider when it comes to your insurance for final expense for the following situations:
Your Family is Grown and You Are Not Sure of their Finances and Capability of Covering the Costs of Your Funeral
As your family keeps growing, things change.
Some years ago it seemed that the economic status of your family was enough to pay your funeral, burial and estate taxes.
However, now it may seem different.
That’s exactly when and why you need to choose a final expense insurance policy that might keep your family safe from feeling overburdened.
You Have Pre-Existing Health Conditions
This type of insurance doesn’t need any special medical exams to complete and is easy to qualify.
They also don’t expire as long as you pay the premiums regularly.
Therefore, if you’re fearing any sudden and unexpected termination of your life you should go for this insurance as early as possible.
You Are Looking for Affordable Coverage
As this type of insurance offers a wide variety of options of coverage you have a chance to choose whatever you can afford.
The Benefits of Final Expense Insurance
Apart from giving your family the relief of having expenses covered after your death, there are other benefits to having final expense insurance:
You Can Choose Your Funeral Type and Your Funeral Home
Depending on the cost of funeral expenses you choose, there may be several funeral homes to plan your funeral with.
Most final expense insurance providers allow their clients to choose the place of the funeral and where the body will be buried.
It’s Not Based on Medical History
While other insurance policies require an in-depth health check to qualify you for their plans, several affordable final expense insurance policies offer guaranteed acceptance regardless of your health condition and medical history.
It Pays the Funeral Home Directly and it Offsets Average Funeral Costs
The most relieving support that this policy offers is that it pays directly to the funeral home.
Once you choose your policy, the insurance is supposed to cover most of the average funeral costs.
As shown above, an average funeral costs around $7,000 and might be as high as $10,000.
This cost may include things like the cost of a casket, the headstone, embalming, paying a funeral director, grave digging and gravesite, service, grave liner, and burial container, and other associated costs.
Peace of mind is what we buy when we purchase insurance.
Final expense life insurance is whole life insurance that is relatively affordable and covers the cost associated with the end of your life.
This will provide you with the peace of mind that your loved ones will not be burdened with the cost of your funeral.
The fact that this type of insurance can assure guaranteed acceptance regardless of your health, and the fact that it never expires, are some great features of final expense insurance.
Consult an insurance broker to find out which plan works best for you.