Final expense insurance is the name given to policies that include some manner of coverage for burial, funeral and bereavement costs. It differs from life insurance in many key ways, most notably in the relatively low cost and lack of pre-screening for health conditions. While many life insurance policies include some coverage for final expenses such as funeral and burial, a dedicated final expense policy, such as a policy from State Farm Final Expense Insurance, Foresters or Fidelity Life, gives added protection and ensures that your loved ones are protected from having to pay funeral costs and related expenses out of pocket.
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Final expense insurance: what to look for
When looking into a final expense insurance policy, there are many things to consider. We’ve gathered and compiled the most useful data on multiple such policies so that you can compare them and find the one that best fits your needs. The criteria we looked most closely at were the length of coverage, type of coverage, and the amount that is reimbursed on each policy.
First of all, like standard life insurance policies, final expense insurance policies can be issued for the life of the individual or on a termed basis. Term policies can be helpful in situations where the death is expected, as in the case of a terminal illness. If a term policy is chosen and the policyholder is still alive at the end of the term, however, the policy expires and no benefits are received. Whole life policies, while they do not expire, may only be obtained up to a certain age, so it is important to do your research and determine which type of policy you need and when you must purchase it.
Another consideration is what type of final expenses you plan to incur. Immediate burial plans are often the least expensive, as they do not involve a funeral home or viewing. Full-service plans include such things as a viewing, a ceremony, and either entombment or cremation of the body. Often they can include the cost of preparation of the body, as well as limousines and flowers for the funeral home. Depending on the company and the policy, even expenses such as unpaid medical bills and legal fees may be covered.
The coverage amount is determined by your needs. When assessing the costs of the funeral service, it is essential to factor every item into the assessment, to arrive at the most accurate estimate and receive the most coverage. Many funeral homes will offer packages with predetermined services, but these are often flexible and can be suited to meet your individual needs. Once a list of costs is compiled, the insurance agent of the company you choose can walk you through the process. Most applicants are accepted upon answering a brief health questionnaire, and coverage often begins immediately upon approval.
Because death is inevitable, planning for it only makes sense. The peace of mind provided by knowing your loved ones won’t suffer financially upon the event of your death is of incalculable value. There are many options to choose from, so you can be sure there’s a plan that is just right for you.
Best for those with significant heath problems
The type of coverage offered by Metlife is known as a whole life policy, meaning it’s good for the entire life of the policyholder.
Applicants simply fill out an online form, or make a phone call to speak with an agent. There is no health questionnaire to answer like those of other policies. Eligibility is ascertained, and coverage granted quickly upon approval.
There is an age restriction placed on potential applicants; only those between the ages of 45 and 75 may submit an application. However, those with significant health problems or other issues with obtaining insurance, are guaranteed to receive coverage as long as they fall within that age bracket. Additionally, funds granted in the insurance benefit payout can be used for anything at the beneficiary’s discretion, including covering funeral and burial costs.
The Metlife website features a chart of example rates based on age, gender and desired benefit level, making the information easier to visualize.
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Insurance options for all types of life situations
Foresters offers three final expense insurance plans, all falling under the name of PlanRight. The top tier of PlanRight is a whole life insurance policy, meaning it is good for the whole life of the applicant, while the other two are shorter-term policies offering limited benefits for the first two years.
The whole life policy is also described as being “fixed,” meaning that benefits are available to the policyholder immediately upon approval, and those benefits will remain at those rates for the life of the policyholder. This is the most comprehensive option, but approval hinges on answers given during a health questionnaire.
If the answers given do not meet the requirements for the whole life option, or if the applicant opts out of the questionnaire process, the two other options are available.
The first is a graded death benefit. The regulations of this option are a little complex at first. The bottom line is that full death benefits do not take effect until two years after the policy begins. During the first two years, if a claim is made, you are eligible for the total amount of payments made plus 4.5 percent interest, as well as 30 percent of the policy’s face-value amount for the first year added with 70 for the second. The larger of these two numbers is the benefit amount given.
The final option is the modified death benefit. Again, the waiting period is two years before full benefits kick in. During that time, if a claim is made, the benefit equals the money paid into the policy up to that point plus 10 percent. The policy matures in two years. If the policyholder dies after that point, the benefits will be paid in full.
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Best for a trial period
Sentinel Security Life
This plan can be purchased and used on its own, or it can be combined with another life insurance policy as a method of additional protection. It is a whole life policy, which means that it is valid for the life of the policyholder, although potential buyers are always advised to check that there are no age restrictions. Sentinel provides comprehensible underwriting to make the details of the policy easy to understand, so that you can make the right coverage decisions for your situation.
As is typical with final expense insurance plans, there is no medical examination required for coverage, which makes this policy a possibility for those who may have trouble obtaining coverage elsewhere due to age or pre-existing condition. A basic questionnaire can be answered via telephone to determine eligibility.
An interesting feature of the Sentinel Security Life policy is its 20-day "look period", which is a money-back guarantee. Customers who purchase their policy and realize that they are somehow unsatisfied within 20 days can receive a full premium refund. Since final expense insurance is all about providing peace of mind, this no-risk introduction period is a suitable inclusion to the policy.
Read our full Sentinel Life