Reasons Why Someone Needs Final Expense Insurance
- Cover funeral costs: The primary reason people purchase burial insurance is to cover their funeral expenses when they have no other means to do so. They simply don’t want to leave their family with a financial burden.
- Gift money: Another popular reason some people buy a final expense policy is to gift a small amount of money (less than $100,000) to loved ones or a charity.
- Need life insurance but have high-risk pre-existing conditions: Lastly, you may need a final expense policy if you want life insurance but can’t qualify for a traditional policy. Conventional life policies have strict underwriting. Depending on your health issues, you may not qualify at all. However, burial policies will accept applicants with a variety of high-risk medical conditions. If you need life insurance and cannot qualify for a traditional policy, burial insurance is a good solution.
- Need life insurance and are on a fixed income: Burial insurance is an excellent solution for seniors on a fixed income who need affordable life insurance with a fixed premium, allowing them to properly budget for it now and well into the future. Since burial policies are small in coverage, the payments are very affordable. Additionally, being a type of whole life insurance, the rates are guaranteed never to increase.
Reasons Why Someone Does Not Need Final Expense Insurance
- Need a large amount of coverage: If you require a substantial amount of coverage, burial insurance is likely not the most suitable type of life insurance. Most final expense insurance companies offer coverage ranging from $25,000 to $50,000.
- Currently have a permanent policy: If you already have a permanent life insurance policy, it can be used to cover your final expenses, so you wouldn’t necessarily need a burial policy.
- Cash or a prepaid funeral: Final expense insurance may not be worth buying if you have the funds to purchase a pre-paid funeral, or cash you can set aside specifically for funeral expenses.
- Donating body to science: Lastly, if you plan to donate your body to science, it’s completely free, and thus, you wouldn’t need insurance to cover the cost of a funeral. Keep in mind that certain health conditions may disqualify you from donating your body to science. Before planning this as your preferred end-of-life option, ensure you verify if you will qualify.
How Does Final Expense Life Insurance Work?
Final expense insurance is a type of whole life policy that A) requires no medical exam, B) pays out the death benefit quickly, C) offers small coverage amounts, and D) has lenient underwriting, allowing seniors with pre-existing conditions to obtain new coverage.
When you die, the insurer will pay out the death benefit, typically within 48 hours, directly to your beneficiaries. The death benefit is paid as cash, tax-free, which can be spent on anything. Also, if your family does not spend the funds on funeral costs, they get to get what’s left over.
Being a type of whole life insurance, the policy lasts indefinitely, the price never changes, and it accumulates cash value.
Frequently Asked Questions
Essentially, anyone age 18-89 can qualify for a final expense insurance policy. However, there are variables such as your state of residence that could impede your ability to qualify. For example, people in New York cannot obtain a policy if they are over 85 years old because insurers there do not offer any plans to individuals aged 86 or older.
There is no specific age at which you should buy burial insurance. That said, if you need a burial policy, it is advisable to purchase it as soon as possible, as waiting will only jeopardize your ability to qualify and may result in higher premiums. Generally, most burial insurance companies begin offering these plans to seniors aged 50 and older. However, many providers still offer these plans to adults as young as 18.
All types of life insurance pay out a tax-free cash benefit, which can be spent on anything; therefore, the money can be used for funeral expenses.
- 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.
