Main Benefits Of Final Expense Insurance
- Peace of mind: Final expense policies are a simple way to ensure your funeral expenses won’t become a financial burden for your family. They pay out cash very quickly, so your family has the money necessary to carry out your final wishes. For those who lack sufficient funds to pay for a funeral outright, a final expense policy is a budget-friendly way to cover end-of-life expenses.
- Super fast claim payouts: Approved claims are typically paid out within 48 hours. This benefit is of paramount importance, as most people purchase these policies to cover funeral expenses, which is a very time-sensitive issue.
- Locked-in premiums: As a type of whole life insurance, the rates for a final expense policy are guaranteed never to increase.
- Lifetime coverage: The coverage is guaranteed to last forever.
- No medical exam: You will never be required to endure a medical exam during the application process.
- Very tolerant underwriting: Final expense policies are built to accept applicants with a variety of pre-existing conditions. That’s true even for folks with chronic issues such as COPD or kidney disease. Most seniors will qualify for immediate coverage despite having these high-risk medical issues.
- Guaranteed acceptance options: Many providers offer plans that don’t require you to answer health questions. Please note, however, that these plans always have a two-year waiting period before coverage begins. If you die during the waiting period, the insurer will only refund your money.
- Fast approvals: Most burial insurance applications are approved or declined within minutes.
- Death benefit payouts can be used for any reason: When you die, the insurance company will pay the death benefit tax-free to your beneficiaries, which they can spend on anything. That means they can use the money to cover funeral costs, medical bills, debts, or any other expenses.
- Small coverage and affordable premiums: Burial insurance policies have small coverage options (as low as $1,000). Additionally, since you’re not purchasing a large policy, the premiums are relatively inexpensive, which is highly beneficial for seniors on a limited and fixed income.
How Is Burial Insurance Different Than Life Insurance?
First, burial insurance is a type of life insurance. It’s a specialized type of whole life insurance designed specifically to cover final expenses.
However, the final result upon someone’s death is a cash payout to the named beneficiaries (which is what all life insurance policies do upon death). They are free to spend that money on any expense, and can keep whatever is left over.
Where traditional life insurance differs from burial insurance is A) its strict underwriting, which usually denies applicants with medical issues, B) its typically low minimum coverage amount of $50,000 to $100,000, and C) its potential to take months to pay out the death benefit.
Standard life insurance policies would be far more suitable than burial insurance if your goal is to pay off a mortgage, replace lost income, or supplement retirement income.
How Does The Claim Process Work?
To file a claim on a final expense policy, your family must first contact the insurance company to notify them of the death. The insurer will request a copy of the death certificate or proof of death from the funeral home. Also, they will require the beneficiaries to sign a claim statement.
Most of the time, the insurer can fully process and pay out the claim with these documents in place. The only time they will need further information is if the insured dies within the first two years. If so, they will also request a copy of the insured’s medical records to validate that they correctly answered the health questions when they applied.
Frequently Asked Questions
The only people who need final expense life insurance are those who A) have insufficient funds to pay for their funeral outright or B) have some coverage now but not enough to cover all final expenses fully.
The primary drawback with a final expense policy is that it is more expensive (per $1,000 of coverage) compared to other traditional forms of life insurance. Because final expense policies accept applicants with high-risk medical conditions, the insurer assumes a significant amount of risk. Due to the high risk, the cost must be higher to keep the insurer solvent. Aside from the price, the other main drawback is that many policies (not all) have a two-year waiting period, which means you don’t truly have peace of mind until you live for more than 24 months.
If you’re looking for life insurance to cover your final expenses, it’s suggested that you opt for whole life rather than term. That’s because term life policies generally expire close to age 80. If you outlive a term policy, then you’d have no means to pay for your funeral costs. On the flip side, whole life policies last indefinitely, so you can rest assured knowing it will always be there regardless of how long you live. A final expense whole life vs. term life comparison is helpful to see the full scope of how each policy differs, so that you can ultimately make a wise choice.
- Nationally licensed life insurance agent with over 15 years of experience
- Personal annual production that puts him in the top .001% out of all life insurance agents in the nation.
Anthony Martin is a nationally licensed insurance expert with over 15 years of experience and has personally served over 10,000 clients with their life insurance needs. He frequently authors entrepreneurial and life insurance content for Forbes, Inc.com, Newsweek, Kiplinger, and Entreprenuer.com. Anthony has been consulted as an expert life insurance source for dozens of high-profile websites such as Forbes, Bankrate, Reuters, Fox Business, CNBC, Investopedia, Insurance.com, Yahoo Finance, and many more.
- Nationally licensed life insurance agent with over 19 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 19 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 14 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 14 years of experience. He has personally helped more than 15,000 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest Youtube channels to help aspiring insurance agents serve their clients better.
- Nationally licensed life insurance agent with over 19 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 19 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 14 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 14 years of experience. He has personally helped more than 15,000 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest Youtube channels to help aspiring insurance agents serve their clients better.
