Learn the requirements for buying final expense insurance for a relative, see sample costs, tips for finding the best policy, and how much a funeral costs.
Nearly every final expense insurance company allows one family member to buy coverage for another. Overall, the requirements are relatively simple:
- The insured agrees to the policy being issued.
- The insured signs the application verbally, electronically, or via paper.
- They answer the health questions if there are any (some policies have no health questions)
There is no scenario where you can bypass those requirements. Even if you have power of attorney over your family member, that does not empower you to complete any of those tasks on their behalf.
There must be what’s called “insurable interest” to buy any life insurance for another person. If there is insurable interest, that means the beneficiaries of a policy would incur a financial loss because of the death of the insured.
Fortunately, funeral costs easily satisfy this requirement, so you won’t endure any pushback or inquisition from insurance companies regarding why you want to buy final expense insurance for a family member.
The bottom line is that there is no way to buy life insurance for a parent or other family member if they are unwilling to participate in the application process. If you find yourself dealing with a relative who doesn’t want anything to do with a final expense insurance policy, check into a pre-paid funeral plan for them.
The cost of a burial insurance policy varies based on the applicant’s age, gender, health, state of residence, tobacco habits, and how much coverage bought.
Below is a final expense whole life insurance rates table with sample monthly premiums.
Burial insurance is a small whole life policy primarily that is meant to cover end-of-life expenses.
When your loved one dies, the insurance company will pay the beneficiary through a tax-free check. It’s important to remember that the payout money can be used for anything, such as debts or medical expenses, along with funeral bills. Also, any leftover funds stay with the beneficiaries.
There are two basic types of final expense policies:
- Simplified issue: A simplified issue whole life plan requires you to answer health questions to qualify. No medical exam is required. If you’re approved, there is no waiting period, which means you’re fully insured for natural or accidental death once you make the first premium payment.
- Guaranteed issue: Also known as “guaranteed acceptance,” these plans don’t require you to take a medical exam or answer health questions. Because approval is guaranteed, there is a two-year waiting period. If you die during the waiting period, the insurance company will only refund your premiums plus approximately 10% interest. After two years, the full death benefit becomes payable for any reason.
Also, the premiums stay the same, and they build cash value.
Every final expense insurance company has a unique price, and they all accept and reject different health conditions. Therefore, it’s vital to compare multiple providers to find the best policy for a sibling, grandparent, or other relative.
To find the best final expense insurance policy for a family member, you should work with an independent insurance agency rather than trying to buy directly from an insurance company.
Independent insurance agencies (brokers) represent multiple providers rather than just one. They can objectively compare numerous policies to find you the best deal possible.
Whereas if you contact an insurer directly, such as Colonial Penn, you’re limiting yourself to just one option. If you don’t like what that company has to offer, there is no recourse.
Whether you work with a broker or an insurance provider directly, be sure to thoroughly vet who you will work with. Check their reputation online from sites like Trustpilot and the Better Business Bureau.
Do they have online reviews? If not, that should be a cause for concern. Also, are the reviews negative? If so, that should also be cause for concern.
According to the National Funeral Directors Association, the average funeral costs $9,420, which includes a vault, burial, and viewing. Cremation costs are typically around $6,970 for a service and viewing.
These figures are helpful when determining how much coverage you’ll need.
Remember that you can reduce the cost of a funeral by forgoing formal services. If you opt for a “direct funeral,” the price drops significantly. Direct funerals have no memorial services. The body is simply cremated or buried immediately.
It’s impossible to legally buy life insurance for another adult without their knowledge. That’s true even if you have power of attorney over the person you want to insure. You can only buy life insurance for another person without their knowledge and consent when buying life insurance for children.
Final expense insurance is best when you only need coverage to pay for funeral costs. If you need insurance to replace your income or pay off debts such as a mortgage, buy a term life insurance policy.
There is no such thing as family burial insurance, where a single policy simultaneously insures multiple adults. However, if an adult buys a policy insuring themself, they can add on a child or grandchild rider that also provides coverage to the children. To insure numerous adults, each person must have their own final expense insurance policy.
It typically costs $50-$100 monthly for a $10,000 burial policy. Remember that rates are determined by your age, gender, health, and how much coverage you select.