One thing that many people don’t think about until it’s too late is what will happen when they die. There’s always the possibility of an unexpected demise, regardless of how young or healthy you are. That’s where final expense insurance comes in – it may assist in guaranteeing that your loved ones are adequately cared for financially after you are gone. But what exactly is final expense insurance, and how does it work? Keep reading to find out!
What is Final Expense Insurance?
It is a whole life insurance policy specifically designed to cover the costs associated with your death. It can include funeral expenses, outstanding medical bills, and even unpaid debts.
While the specifics of final expense policies vary depending on the insurer, they typically have lower face values than traditional life insurance policies. It is also generally easier to qualify for this type of insurance.
It is available as supplementary insurance to improve upon death benefits from other life insurance or as a type of assured issue coverage that does not need to be medically verified.
How Does Final Expense Insurance Work?
Your final expense policy’s death benefit will go to the person you designate as your beneficiary when you pass away. They may then use this cash to pay for any end-of-life expenditures you might have. It can help your loved ones avoid going into debt to cover these costs.
The Benefits of Final Expense Insurance
There are pros and cons to final expense insurance. Some of the benefits include:
No Need for Medical Exam: You don’t need to take a medical exam to qualify for this type of policy. when existing health problems make it difficult to pass a regular life insurance exam, whole life insurance can be an excellent choice. So, everyone can qualify regardless of their health.
No-Lapse Guarantee: This policy has a “no-lapse” guarantee, which means that as long as you pay the premiums, the policy will stay in effect.
Simplified Underwriting: The underwriting process is more straightforward for a final expense insurance policy.
Some Other Interesting Factors:
Consider these additional factors if you’re looking for final expense insurance coverage.
- A tax-free death benefit will be paid out to your beneficiaries.
- Final expense insurance policies are “whole life” policies, which have a cash value component.
- You can purchase this coverage until the age of 85.
- The policy can earn dividends, which can be used to pay premiums or increase the death benefit.
- You may usually borrow against the policy’s cash value.
What’s the Cost?
Final expense insurance costs vary depending on various criteria, such as your age, health, and gender.
In general, younger and healthier individuals pay lower premiums.
For a healthy 40-year-old man, a $25,000 policy might cost around $30 per month.
A 65-year-old woman with some health problems might pay closer to $56 per month for the same coverage.
We hope we succeeded in dispelling some of the mystery and provided you with a better knowledge of what final expense insurance is and how it works.
At Powerhouse Insurance serving Shertz, we want to make sure you have access to the best possible coverage, so if you have any questions or would like a free quote, please don’t hesitate to contact us.