If you are a senior and watch any TV during the day or evening, you’ve likely seen commercials about Final Expense Insurance. Here we’ll discuss what it is and why you should buy it.
First of all, it’s important to understand that everyone will leave some amount of final expenses when they die. Knowing this, is it important to you that you don’t leave a financial burden to your surviving loved ones to deal with while they are grieving?
If you could pre-arrange to have the funds available to pay your final expenses, wouldn’t that be important to you? And if you could arrange to have these funds available through affordable life insurance, that would be a good thing, right?
What are Final Expenses?
When you die, there are normally some expenses that are left behind and that are typically paid by your surviving loved ones. These expenses typically include the cost of your funeral, unpaid medical bills, and nursing home expenses that were not paid by individual health insurance or Medicare. Of all of these, your funeral and burial expenses typically represent the majority of expenses that need to be covered and here’s why:
The National Funeral Directors Association (NFDA) reports that the average price of a traditional funeral and burial service in 2017 totaled $8,755. They break down these costs as follows:| Fee for Basic Services | $2,100 |
| Transferring remains to funeral home | $325 |
| Embalming Fee | $725 |
| Other preparations of the body | $250 |
| Fee for Facilities for viewing | $425 |
| Facilities and staff for the funeral ceremony | $500 |
| Use of Hearse | $325 |
| Use of service Vehicles | $150 |
| Printing Services | $160 |
| Metal Casket | $2,400 |
| Burial Vault | $1,395 |
| Total | $8,755 |
Keep in mind that the prices listed here are an average for 2017 and do not include the cost of the gravesite. Also, it’s important to note that these rates will go up somewhat each year.
Other final expenses like unpaid medical and nursing home bills should also be considered when you determine the amount of the death benefit that should be purchased. If you are married and have the cash to pay these expenses then you may not need final expense insurance but do you want your spouse to have to drain your savings account when you pass away?
What is Final Expense Insurance?
A final expense insurance policy is typically a whole life insurance policy that is designated to pay your expected final expenses when you die. Although any type of insurance can be used for final expenses, whole life is generally the better choice because of the various guarantees and benefits that are built into the coverage. The guarantees that you will need for a final expense insurance policy are:
- Lifetime Insurance Coverage – Coverage that your company cannot cancel except for non-payment.
- Locked-in Periodic Premiums – Your periodic premium cannot be increased by the insurance company for any reason.
- Cash Accumulation – Your final expense insurance policy will build cash value over time just like traditional cash value insurance and you can access it for any reason.
Why not just buy a Preneed Plan from a Funeral Home?
Certainly, a Preneed Plan is an option to consider and most funeral homes offer them. There are, however certain advantages that Final Expense Insurance provides and that are not found in a Preneed Plan:
| Benefit or Service | Funeral Home Preneed Plan | Final Expense Insurance |
| Expenses covered by the plan | Funeral & burial costs only | Any final expenses |
| Your beneficiary | The funeral home | The insured’s choice |
| Funeral arrangements | Locked in at the time of purchase | You or your beneficiary provides the instructions |
| Cost | Depends on the funeral home | About $2 per day depending on the insurance company |
| Death Benefit | Same as predetermined costs | The death benefit is the face amount plus any cash value in the account |
| The plan can be borrowed against | No | Yes – up to the amount of the cash value |
How Much does Final Expense Insurance Cost?
The cost of final expensed insurance is based on the applicant’s age, the applicant’s health, and the face amount (death benefit) desired. Most insurance companies offer level benefit coverage (pays full death benefit from the first day of coverage) and graded or guaranteed acceptance coverage for applicants who do not medically qualify for their level benefit plan.
Here are actual rates for a $15,000 policy for a healthy male or female non-smoker for 2019:
|
Applicant’s Age |
Male Non-Smoker |
Female Non-Smoker |
|
50 |
$46.19 |
$34.94 |
|
55 |
$51.65 |
$39.70 |
|
60 |
$63.62 |
$49.00 |
|
65 |
$80.91 |
$62.30 |
|
70 |
$107.50 |
$78.24 |
|
75 |
$147.37 |
$107.50 |
|
80 |
$187.74 |
$138.52 |
To find an accurate for your actual age, please use our instant quote form on the right side of the page.
What if I Don’t Qualify for Level Benefit Final Expense Insurance?
Although insurance carriers that offer final expense insurance will not require a medical exam or blood/urine test, there are health questions on the application that if answered “yes” could disqualify you from purchasing a level benefit final expense insurance policy. If this happens, your independent agent will offer you a graded benefit or guaranteed acceptance plan.
These alternate plans cost more than level benefit coverage and typically have a waiting period of two or three years before the full death benefit will be paid to the beneficiary if death is the result of natural causes.
In Conclusion
As we mentioned earlier, your final expense insurance rates will be based on your age, health, and death benefit. Knowing this, we encourage you to get a quote today because your cost of insurance will never be lower. Once you have an idea of your needs, call the insurance professionals at Best Benefit Insurance and Financial Services (BBIFinancial) and get the answers to questions you have so you can make an informed decision about your final expense insurance plan.