What You Should Know About Final Expense Insurance
This article contains important information that you should know about final expense insurance, including what it is, final expense insurance cost, and more. Contact The Insurance Files for help navigating insurance topics and for a free life insurance quote.
What is Final Expense Insurance?
Also known as funeral or burial insurance, final expenses insurance is whole life insurance that pays funeral expenses and medical bills when you die. Older adults age 50 and up who want to make end-of-life plans can do so with a final expense life insurance policy.
Some people may buy final expenses life insurance as a secondary plan to supplement other life insurance benefits, or for guaranteed coverage without requiring a medical exam. The premiums for these types of insurance policies are generally higher than policies with lower payouts. But, they are easy to qualify for, which is great for those considered by insurance carriers as high-risk due to their older age or health problems.
What You Can Pay with Life Insurance for Final Expenses
Final expense insurance for seniors can help you cover end-of-life costs such as funeral expenses. According to the NFDA (National Funeral Directors Association), the median average funeral cost was $7,848 in 2021. A funeral with a ceremony, embalming costs, and burial can cost more than $10,000.
A final expense insurance policy can prepare you financially for a typical funeral where costs include embalming (for an open casket), officiant service fee, funeral home rental, and the final touches like flowers, music, etc. Also, if you choose burial, you will need a casket, a plot, a grave marker, and transportation to the cemetery. Likewise, should you choose cremation, you will need an urn or cremation casket, transportation, and more.
Some family members chosen as beneficiaries will use your final expense funds to pay…
Fulfill Your Partner's Day-to-Day Expenses and General Needs
If you die and leave a spouse behind who depended on your contributions or income for support, they may struggle financially without you there. A payout will allow them to continue covering their basic needs, such as mortgage payments, housing, assisted living costs, or other expenses.
Medical and Healthcare Expenses
This may include hospice care, medical bills, and/or other end-of-life expenses. For seniors, these essential expenses also include prescription drug costs, co-payments, inpatient facilities, emergency care, or nursing care that increase as you age.
Final Financial Debts
Beneficiaries may also use the funds to cover your final debts like credit cards, auto loans, and other debts you owe. This prevents your family from being financially burdened with your remaining debts.
An Inheritance to Leave Your Kids or Grandkids
You can set up your final expense insurance policy to be disbursed to your children or grandchild when you die. Leaving them an inheritance can help pay for their education, or provide them with the necessities they need.
These are some of the things that you should consider when determining how much final expense coverage to buy. If you are having trouble deciding, contact a life insurance agent who can help you choose the right amount to meet your final expenses and your loved ones’ support needs.
Benefits of Final Expense Coverage
Coverage for final expense insurance ranges from $2,000 to $40,000. There are no exams required, and even if you have serious health issues, you will not be rejected. Thus, there is minimal fine print associated with a final expense policy. Coverage is guaranteed not to decrease, cancel, or expire, and your policy builds cash value.
You can name anyone you like as your beneficiary, including a funeral home, and the insurance company will provide them with a quick tax- free check when you pass away. Another great benefit is there aren’t any restrictions on how the funds are used. Your beneficiary can use the funds on funeral-related expenses, medical bills, debts, or other costs and can keep what’s leftover.
5 Best Final Expense Insurance Companies
When choosing the right insurance company to provide your final expense policy, there are some things to consider, including what’s in the fine print, how much coverage you will have, how much it will cost, and if there is a waiting period before you are covered.
The following is a list of the 5 best final expenses insurance companies:
01. Mutual of Omaha
This insurance company is extremely financially secure and has an A+ rating with the BBB and A.M. Best. They have been around since 1909 with low premiums, and have the best funeral expense policy available called, “Living Promise”. They accept most applicants with many common health issues in their immediate benefit plan.
2. Aetna
Aetna was founded in 1853 and currently has an A+ rating with the BBB and an A rating with A.M. Best. While it’s uncommon for life insurance companies to offer new policies to those over 85, Aetna issues life insurance plans to even 89-year-old seniors. In addition, they have competitive rates for seniors and although some may have high-risk conditions, they are still approved for no waiting policies.
03. Royal Neighbors of America
Founded in 1895, Royal Neighbors maintain an A+ rating with the BBB and an A rating with A.M. Best. Compared to other funeral insurance companies, Royal Neighbors of America accepts the most health issues and they also have lower premiums compared to some of the rest. Thus, they also offer many valuable benefits to their policyholders at no extra charge.
4. Foresters Financial
Since 1874, Foresters Financial has been serving the public and currently has an A- rating with the BBB and an A rating with A.M. Best. Foresters Financial works with several charity programs within the U.S. including the Red Cross, and Ronald McDonald House. Get a plan with Forester Financial that accepts many health conditions among seniors, and enjoy quick approval times and competitive premiums. They also grant some generous member benefits to policyholders at no additional cost.
05. Transamerica
Transamerica began its services in 1904 and currently holds a B rating with the BBB and an A rating with A.M. Best. This is one insurance agency with strong financials and a unique insurance plan that offers lax underwriting, competitive premiums, and no waiting period for seniors with high-risk chronic conditions.