Final Expense Life Insurance 101

Final Expense Life Insurance is to guarantee funds to be paid for one’s funeral, burial, cremation, gravestone, or urn.  These Whole Life Insurance policies are typically available to applicants 55 years of age and older.  A policy that is in place to cover these final expenses can take a significant weight off of a family’s shoulders and help them properly grieve the loss of a loved one.  This insurance policy has a designated beneficiary of one’s choice, who will receive the death benefit tax-free in the case of one’s passing.  Once collected, these funds are subsequently sent to the funeral home.  Any balance may be transferred to the existing beneficiary.

Does One Need A Medical Exam?

The majority of “Simplified Issue” final expense life insurance policies don’t require a medical exam. One’s eligibility for this coverage is determined by their medical history, medications, and tobacco use. For instance, one would need to obtain a “rated” or “graded” policy if one were not accepted into a simplified issue policy.  Typically, these are advertised as “Guaranteed Issue”.  Anyone can be eligible for this, but the death benefit will change.  If one were to pass away before that time, the modification of the death benefit requires a 2 to maybe 3-year waiting period before one’s death benefit can be paid out in full. When this occurs, the majority of carriers will pay the beneficiary 100–110 percent of all premiums paid as the death benefit.

How Does One Find A Final Expense Company And Best Options?

In this nation, there are numerous life insurance companies that provide final expense insurance. Everyone has undoubtedly seen a ton of advertisements on TV or heard on the radio if you are in the market for final expense insurance.  It might be confusing to decide on the best option to go with, with so many businesses vying for your business.  Every company has unique underwriting standards that determine whether or not you will be accepted.  For instance, some carriers won’t offer Day 1 coverage to someone who had their diabetes diagnosed before turning 50.  Each medical occurrence or diagnosis has a unique perspective depending on the carrier.  The importance of this needs to be clear when shopping, to make sure one has the appropriate coverages and policy.

What Does a Funeral Cost?

According to the National Funeral Director’s Association, the average funeral expense was $7,848 in 2021.  The price may or may not include a grave plot, a headstone (including installation), and the cost of excavating and bolstering the grave; depending on the funeral home you use.  While cremation can be less expensive than a burial, the media cost was roughly $6,971 in 2021.  Additional expenses must be considered, which include but are not limited to the price of an urn and any associated death certificate processing fees.  Again, these prices are based on averages, so they can be higher, depending on the geographic locations and the rise of inflation.