You might have heard about final expense and burial insurance, and you might be confused between the two. Therefore, it is important for you to understand the differences between the two.
Actually, final expense insurance is term for marketing that is utilised for describing the purpose of policy and not the actual life insurance product that you are purchasing. Insurance agents make the use of final expense insurance for helping their clients in understanding that the objective of purchasing the policy is leaving sufficient money for close ones to pay all the final expenses that they might not be able to pay when we die. Typically, everybody will be leaving final expenses such as burial and funeral costs, and even unpaid medical bills.
Considering the fact that the average cost of a moderate funeral service is between 12,000 and 9,000 dollars, your funeral is actually major portion of your final expenses which you generally leave to your surviving close people.
Following are some of the benefits that you get when you have a final expense insurance policy:
Meanwhile, when it comes to burial insurance, it is important for you to know that burial insurance and expense insurance are the same things. Funeral insurance, burial insurance, and final expense insurance are all the same things as they tend to share a common objective.
When you hear about these types of policies, the term is being used for indicating the objective or purpose of the policy. Even when you hear agents talking about final expense insurance, they are actually referring to the whole life insurance policy with a specific death benefit that is capable of covering all the final expenses including funeral costs.
A funeral is not a one-step procedure. It includes memorial services, embalming, a casket and cremation. All these require a significant amount of money to be allocated. What if you used to earn a little amount that hardly meets all the necessities? In such a case, it is most important to have final expense insurance. In this way, you can help your family support even after your death.
The premiums to be paid to the insurance company varies according to the age of the person. If the person is young, the premium demanded would be a minor one as young people are more likely to have a longer life and would be able to pay all their premiums by giving small monthly instalments.
Meanwhile, people of old age are demanded to pay a large premium as they are standing at the end of their life and if they die before paying all their premiums, it would make no difference. In fact, all the burden would be shifted to the shoulders of his loved one. So, it is better to think about burial insurance at a young age so it may not disturb your pocket and the pocket of your family after your death.
Like every organization, the companies that provide the services with the final expense insurance have rules. For instance, if you die before paying all the premiums, only the amount that was paid would be returned to the family along with the interest amount.
Acquiring burial insurance is beneficial in many ways. If a person earns a little amount and has poor health, he is more likely to get the final expense insurance. Moreover, not a lot of information is required for adopting the final expense insurance. A person is saved from long medical check-ups, which indirectly also saves him the time.
Final expense insurance is provided after just filling a questionnaire. For the medical purpose, a prescription would work. There is no need of going through the long procedure of medical examination. Another advantage of having the final expense insurance policy is that the premium amount remains the same. In any situation, the premium amount does not alter. A person has to pay the premium amount as per demand on the first instalment.
No one can make changes to the services that are promised to you when applying for the final expense insurance. In only one case, the difference could be made to the benefits promised and that is one you and only you make some changes in it or borrow some cash from it.
The amount of insurance is paid in cash form. Therefore, there is no compulsion on the family of the dead to use it on the funeral or related things only. They can use the amount to maybe pay some sort of tax or the bills or to go on the vacations, or whatever their need is. They are free to use the amount against the actual reason for the insurance.
The services promised by the agency stays the same in all the situations. Any alteration in the benefits would be under the circumstances where you either stop paying the premiums or you die before the completion of the premiums. In this case, the services would be provided according to the premiums paid.
The final expense insurance provides a tax-free death benefit. This means that no tax would be deducted from the amount promised. The family of the dead one would receive the exact amount that was promised at the time of having the insurance.
Burial insurance offers the death benefit of $50,000 or less. Basically, it ranges from $2,000 to $50,000. The benefit amount depends upon the premiums paid by the person. This is the amount that is required at the funeral and also the one that comes within the affordable range.
The amount of the premium received by the applicant depends upon different factors. Age is on the top. The younger you are, the lower premium you have to pay and vice versa. The minimum age for applying for final expense insurance is 55 and the maximum age is 85 years.
Another factor includes your health. The agencies do not demand you to go through the long process of medical check-up as they just ask for the prescription that tells about your medical history. The healthy you are the less you will pay. As good health is a symbol of a longer life, so, there are lower chances for a person with a clear medical history to die soon.
Gender plays an important role in specifying the number of premiums to be paid when applying for final expense insurance. Men are more likely to pay higher premiums than women. This is because scientifically, women tend to live longer than men.
If a person is in habit of consuming any unhealthy stuff like drugs, tobacco, or alcohol, he is more likely to pay a high premium. These things are injurious to health and hence, increase the risk of death.
There are three types of final expense insurance: guaranteed issue, regular life, and graded benefit. Guaranteed insurance deals with people with poor health. Such people get to wait for a longer period to get paid. The applicants do not need to go under medical procedures but are approved according to their medical history. In case of the death of the applicant, the promised benefit is not paid and instead, the amount that that was paid as a premium to the agency is returned with an interest of a 10% annual rate.
The final expense insurance is a small part of regular life insurance. If a person is able to afford a large policy then it’s better to go with the regular life insurance. By doing so, one can have a great amount as burial insurance and it would prove more beneficial in order to support the loved ones of the person.
The third type of final expense insurance is graded benefit insurance. This type of insurance offers policies for the person whose health condition is partially disturbed. For example, he has the habit of consuming different harmful substances. Such people are likely to have their applications approved.
If the applicant dies in the first year of having the insurance policy then the agency pays 30%-40% death benefit. If the person dies during the second year then the death benefit payable becomes 70%-80%. In case of the death of the person after the predetermined years, 100% death benefit is paid to the family of the dead.
Actually, any person can consider buying this insurance. Commonly, people over the age of 50 consider purchasing burial of final expense insurance. It is quite important to note that in most of the cases, the coverage is quite affordable and it is quite simple to purchase as well. In addition to it, the underwriting is quite simple and straightforward because there is no requirement for a specific medical exam.
If we really talk about it, many seniors find it later in their lives that they would be leaving a significant debt for their relatives and they would rather make some proper arrangements for their loved ones so that they can easily cover the final expenses.
Many seniors tend to find out that they are not insured because of the following situations:
Now, if any of these conditions apply to you, you don’t need to worry because you have us and we will help you out. Macq Insurance Agency will stand by you and will assist you in finding the coverage that suits your need. We know that it can be quite difficult to find the coverage that is suitable for you but it does not mean that the right one does not really exist for you. We will work with you and we will assist you in finding quality coverage at a specific price that will be adequate for your budget. Our services are available in Clark County and Las Vegas. Therefore, you can reach out to us and we will help you.
