Final Expense Insurance

What is Final Expense Insurance and What Does It Cover?

Final expense insurance is an insurance plan purchased to protect relatives and even friends from the financial stress of taking care of end-of-life costs. Also known as burial policy or coverage, this insurance plan caters to costs associated with the policyholder’s death.

The policy also pays for the expenses that relatives and friends of the deceased cannot manage on their own. A particular amount is paid to the beneficiary by the insurance company. The beneficiary subsequently uses the paid sum to pay end-of-life expenses.

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Why use Final expense life insurance?

In some instances, people see senior final expense life insurance as a substitute for life insurance. This is usually the case if a person does not meet the requirements to qualify for traditional life insurance. Purchasing a guaranteed final expense policy require no medical exam and is therefore seen as a good alternative.

It is also worth noting that the smaller the face value of the money, the more affordable the premium usually is. On the flip side, persons with whole or term life policies can use burial coverage for the payment of expenses, even as the beneficiaries wait for the payment of life insurance benefits.

Guaranteed burial coverage is one of the policies under final expense insurance. This choice of coverage is advised for persons that are not very healthy or have a form of illness or the other. This policy type does not require the holder to undergo a medical examination. As such, policyholders do not stand the risk of being disqualified due to pre-existing conditions. Premiums here tend to be slightly higher compared to other policies. Holders may also have to wait for a couple of years before being vested in death benefits. However, it is worth noting that the death of the policyholder before becoming vested means that the beneficiary is refunded the premiums.

Simplified burial coverage is another policy under final expense insurance. This choice is perfect for adults that are in good health, making it the direct opposite of guaranteed burial coverage. Unlike the other type of coverage mentioned above, policyholders are required to undergo medical screening. However, premiums here are lower than in guaranteed burial coverage. Simplified policies also pay end-of-life costs, whether the policyholder has become vested or not.

For clients to determine the best final expense insurance coverage for their situation, some factors need to be put into consideration. The primary concern when selecting coverage is the funeral expenses. Therefore, clients are advised to consider the costs of the funeral, the hearse, the minister, and cemetery plot as they decide on their choice of coverage. It is also essential for potential policyholders to consider rolling in expenses. Some of the costs in this instance include mortgage payments and legal fees for probate that family member may not be able to afford.

Burial policy scam?

One significant thing that must be noted by potential policyholders is the existence of burial policy scams. One way of identifying such scams is the presence of unreasonable premiums. Extraordinarily expensive or too low monthly premium might be a warning sign of an impending fraud. Buyers are also not required to pay any penalty for cancellation.

The funeral costs at the time of death should also be paid in full by the policy. It is important to state at this point that the amount to be paid is not based on what the funeral costs were at the time of purchasing the policy. The beneficiary that will eventually receive the payment should be a family member and not the funeral home.

How to get a final expense insurance

The first step to getting final expense insurance is to tabulate the estimated end-of-life costs. This should be followed by seeking professional help by contacting an insurance agent. Alternatively, clients can fill out online forms to ask for different policy quotes. Getting different quotes online helps clients to compare various offers before settling for one quickly. Once the client decides for a particular coverage, it is required that they choose a beneficiary. It is also crucial for the beneficiary to know about the policy and where the documents are kept as the policyholder will most likely be unavailable when it is time to make a claim.

Burial benefits are paid within twenty-four hours of the death of the policyholder. This allows relatives to pay for funeral expenses and kick-start the funeral plans immediately.