If you’re over 40 and need money to cover your final expenses and funeral costs – final expense life insurance is a perfect fit.
What is final expense life insurance?
The hardest thing we must ever face is the death of a loved one. On top of this, surviving loved ones are often left to handle any end-of-life medical expenses and funeral costs. These expenses can add to the sense of grief and stress surviving friends and family members feel.
Final expense life insurance was created to prevent this added pressure. A final expense policy – also called burial insurance, funeral insurance, or end-of-life insurance – gives your loved ones a sum of money upon your death that can be used to cover any expenses you leave behind, such as medical bills and funeral costs.
Why is final expense insurance unique?
1. Focuses on after-life preparedness. Most life insurance policies aren’t designed to specifically address the many costs family members pay when preparing for a funeral. Caskets alone can cost up to $10,000 depending on the style and material. This doesn’t include other typical funeral costs like transportation, preparation of the body, grave liners, flowers, or the headstone. A final expense policy can help with these costs and protect your family from experiencing a financial burden.
2. Final expense insurance is a type of whole life policy. For most traditional whole life policies, the death benefit and the insurance premium remain the same for the life of the policy. Most whole life policies last for the life of the policyholder and some accumulate cash value. Whole life insurance is often called “permanent life” because the term of the policy isn’t limited to a specific time frame like term insurance.
3. It’s more affordable than many other insurance policies. Because it’s typically used to cover funeral costs, the coverage amount is usually much smaller than traditional policies. On average, people insure themselves for $10,000 – $20,000, making the premiums for a final expense policy more affordable than larger policies.
4. Easy qualification. Because the coverage amount is lower than other types of life insurance, some final expense policies don’t require a medical exam to qualify. Most policies can be issued based on answers to health questions on the life insurance application.
Rising funeral costs and medical expenses
The rising costs of funerals have been well-documented over the years:
- In 1960, the average cost of a funeral without a vault was just over $700
- In 1985, that number had risen to $2,737
- In 2014, that number rose even more to $8,508
These numbers suggest an increase of 1,328 percent in funeral costs over four decades. Add in the price of a cemetery marker, a published obituary, and other costs associated with a memorial service and the total can quickly approach $10,000 or more.
In addition to funeral expenses, medical bills alone can cost surviving loved ones thousands of dollars. Of the 2.6 million people who died in the U.S. in 2014, more than eighty percent were on Medicare before they passed. A disproportionate share of Medicare spending occurs in the last year of life, covering costs related to chronic conditions, inpatient hospitalizations, and hospice care.
A smart and compassionate insurance option for seniors
So how can final expense life insurance help?
Traditional life insurance policies (such as term insurance) are primarily intended to replace the income lost when a person dies. These policies are most important during the years when we’re working, paying for homes, and raising families.
Once we’ve retired, paid off the mortgage, and the kids are out of the house, traditional life insurance policies aren’t needed as much. What we do need is a way to pay for any expenses we leave behind when we pass.
As we’ve seen, the average funeral can cost over $9,000. With no way to pay for these expenses, families often experience a financial burden during a time of intense grief.
Many of us have experienced the death of a loved one and remember how stressful it was to juggle our grief, the funeral planning, and the financial obligations we had. The thought of our spouse or children going through the same experience is unbearable.
What can we do to protect our families from this financial burden? How can we make sure they aren’t left with a pile of bills when we pass?
Taking out a final expense policy can be a smart solution for seniors looking to protect their loved ones from rising funeral costs. It’s typically easy to qualify for because it’s issued based on answers to health questions. In many cases, you don’t need to take a medical exam.
Who needs final expense insurance?
Final expense insurance is permanent insurance – it doesn’t expire (as long as premiums are paid) and it carries a cash value over time. Because the death benefit of the policy (typically $5,000-$25,000) tends to be less than the benefit of traditional insurance, the premiums tend to be more affordable for those on a fixed budget. This makes final expense insurance an attractive option for seniors looking to cover their end-of-life expenses.
Final expense life insurance isn’t just for seniors. Anyone concerned about leaving their loved ones unprepared when they pass should consider taking out a life insurance policy on themselves. Getting multiple quotes – including a final expense quote – can help you determine what type of life insurance is best for you.
Funeral Advantage™ – the leader in final expense insurance
Lots of final expense plans exist, but which one is best for you? Which will protect your family the most? Which will pay your claim the fastest? Which will help your family with your funeral arrangements? These are important questions to consider before choosing a provider, especially when it comes to protecting your family during the funeral process.
For more than 50 years, Lincoln Heritage Life Insurance Company® has specialized in final expense life insurance. Our policies don’t require a medical exam – just health questions on a one-page application – making them easy to qualify for.
But what truly sets us apart from other final expense providers is that we help your surviving loved ones with the hundreds of details that arise during the funeral process. When one of our policyholders passes away, we want to make sure things go smoothly and easily for the loved ones taking care of the funeral arrangements.
We’ve partnered with the Funeral Consumer Guardian Society (FCGS) – an independent senior consumer advocate organization – to bring you the Funeral Advantage™ program.
Funeral Advantage includes a life insurance cash benefit – up to $20,000 – and family support services through the (FCGS). Your loved ones will receive a 24-hour toll-free number to call in their time of need.
As part of your Funeral Advantage policy, you’ll receive a two-page final wishes form to help you decide the style of funeral you want and document any additional requests.Click to read more
Paying For Your Funeral: Where Will The Money Come From?
Nowadays, it’s not uncommon for funerals to cost $10,000 or more depending on the style chosen.
That being said, where will the money come from? A savings account? Government benefits? A really, really nice friend?
Check out the following infographic to see if a final expense life insurance policy is right for you and your family.See Full Size Image