Let’s talk about the inevitable. Yes, it’s a topic that will ultimately come up one way or another in your lifetime. Maybe you’ve already been through the experience of it and know how scary it can be, especially without protection and help. I’m talking about Death. It’s the subject none of us want to talk about, yet know we have to (as quickly as possible, right?).
“I’ll just self-fund the funeral” you say, but there’s a much easier route to take, which can also keep your sanity in check during this difficult time. It’s called Final Expense Life Insurance.
Death comes at unexpected and expected times in life, yet it’s something we aren’t ever prepared for. It’s an emotional time because it usually involves someone you are really close to and care about, or love. At that time, there are many immediate final expenses that arise, and you aren’t typically in a state to sit down and compare costs. Funerals can be costly, and with inflation, the prices keep going up. According to the National Funeral Directors Association, the average cost of a funeral in the USA is $8,343. This is just the average, too, so expenses can far exceed this.
When death occurs, you may or may not be in a financial state to pay these final expenses. Funeral costs aren’t the only thing to consider. What if you lose a spouse and still have small children in school, and a new mortgage? What if you have credit card debt that you took out with your spouse jointly? These are all final expenses that may apply to you, and that must continue to be paid, or be paid off.
A Final Expense Life Insurance policy can assist with all these things, and more. Did you know that we see more people come to us for insurance once they have lost a loved one who had no life insurance? This is because they’ve had to come up with that money in an unexpected instant and know how difficult it can be. Why not plan ahead so you don’t have to think about this? If you have a policy in place, you can have peace of mind that when the inevitable time comes, things will go much smoother.
WHAT IS FINAL EXPENSE LIFE INSURANCE?
Final Expense Life Insurance is typically a Whole Life or permanent life insurance policy that provides your beneficiary with a Death Benefit at the time of your passing. Final Expenses can range from $2,000-$40,000, so there are many options to suit your needs. The policies are meant to last a lifetime, and offer protection until the age of 100.
Once an underwriter approves your policy, the premium and death benefit stay level. The Death Benefit, also called “Face Amount,” is the amount of coverage your beneficiary receives at your death. The good news here is if you name a direct relative like a spouse or child, then this benefit is also paid to them tax-free. You can, however, list anyone as a beneficiary, including religious organizations and charities.
I HAVE A MEDICAL CONDITION. CAN I STILL QUALIFY FOR COVERAGE?
Final Expense Life Insurance offers coverage to many people of many ages. The premiums are based on age, gender and health conditions, typically. There are a variety of medical conditions that can get approved, including Diabetes and Kidney Disease. Obviously, there are factors involved like the severity of the medical condition, the treatment plan received and any complications experienced that determine a final approval.
There are a few death benefit options that these policies offer, and all depend on your health condition. There are Level, Graded and Modified death benefit options.
WHAT ARE LEVEL, GRADED AND MODIFIED DEATH BENEFITS?
A level death benefit is just like it sounds. Once you are approved for this option, your death benefit, or face amount, is level starting on your issue date and remains level for the life of the policy. This is usually meant for people with excellent health, or people with no major medical conditions.
Depending on your medical history, you may qualify for a Graded death benefit. While every carrier differs, these benefits offer you a percentage of coverage if you were to die within the first year of your policy issue date (usually around 70%), then full death benefits after the second year (or some carriers will even go 3 years before they pay a full death benefit). This option may be for people who have a major medical condition but no severe complications.
If your medical history is more severe and you’ve had conditions such as some cancers, alcoholism or stroke, you may be offered a Modified death benefit. This option usually pays full death benefit proceeds after a 2-year wait (no percentage of the death benefit is paid in years 1 or 2). Some carriers, though, do pay back all paid premiums plus a percentage on top of that if you were to die within the first couple years of the policy.
If your medical conditions are more severe than the guidelines allow, we can assist with a Guaranteed-Issue Life Insurance policy. These policies are issued regardless of your health, and do not ask medical questions when you apply for coverage.