Final Expense Insurance 101: What You Need To Know
The average American household spends $900 on auto insurance, $1,083 on homeowners insurance, and $3,1600 on health care insurance. With all of these outgoings, it’s easy to see why people think that final expense insurance is an unnecessary expense. Many people just can’t afford it; others don’t even know what it is.
The truth is, final expense insurance could be one of the best investments you make in your lifetime. Plus, it’s cheaper than you think. Final expense life insurance covers the cost of your medical bills and funeral expenses, so your loved ones don’t have to foot the bill.
What is Final Expense Insurance?
Many people confuse final expense insurance with life insurance. However, these two policies are different. Final expense insurance, also known as burial insurance, covers many of the costs that your loved ones might have to pay after you pass away. These costs might include funeral expenses and medical bills.
Here’s an example:
Say you are ill before you die and you incur thousands of dollars of medical bills. If you pass away, your family might have to foot the bill, which can leave them in a compromising financial situation. Final expense insurance provides you with the peace of mind you need. This policy covers the cost of medical bills, which lightens the load for your family members.
Here’s another example:
Say you pass away but your family can’t afford to pay for your funeral. Final expense insurance will provide them with the funds they need so they can purchase a casket and pay for your burial and other expenses.
How Does it Work?
Final expense insurance is a type of whole life policy that covers end-of-life costs. As a result, insurers won’t pay out hundreds of thousands of dollars to your loved ones when you pass away (like they might do on a life insurance policy).
Instead, a final expense insurance provider will usually pay out around $20,000 to family members after you die. This will be enough to cover your funeral and any other expenses you incurred before you died. However, this depends on various factors.
The good news is that the monthly premiums are relatively low when compared with other types of insurance. You can also bundle this insurance with a life insurance policy, which might save you more money in the long run. Remember, though, your coverage will stop if you cease paying premiums.
How to Apply for Final Expense Insurance
Unlike some life insurance policies, applying for final expense insurance is relatively easy. There is no medical examination to pass, and your premiums won’t increase if you smoke or are overweight.
Providers might ask you a few health-related questions during your application, but these questions shouldn’t be intrusive. As you won’t have to provide medical evidence to support your application, you can apply for final expense insurance in as little as a day (depending on the provider).
Like any other type of insurance, you can apply for final expense insurance online or over the phone. You’ll often receive an instant decision about your application. If accepted for this insurance, you’ll receive all of your important insurance documents in the mail or via email.
The Benefits of Final Expense Insurance
Did you know that the average cost of a funeral in the United States is a massive $8,000? This fee includes transportation, viewing, embalming, and burial, but doesn’t cover flowers or all the other costs associated with a funeral.
And that’s just the tip of the iceberg.
Imagine if you incurred thousands of dollars of medical bills before you died.
Who is going to pay them?
Thankfully, there’s a solution. Final expense insurance provides you with a financial safeguard in the event of your death. Your loved ones will receive end-of-life costs to help cover funeral fees and medical bills.
How to Choose a Final Expense Insurance Provider
There are loads of different final expense insurance providers on the market, and it can be difficult to know which one to choose. From nationwide banks to small, independent companies in your local area, these companies differ when it comes to premiums and policy cover.
So, how do you know which company to choose?
Start by asking friends and family members for recommendations. They might know an insurance company that offers this type of policy and provides excellent customer service.
Then, use a comparison website like PolicyGenius, where you can compare various final expense life insurance providers in one place and choose the best one based on your personal circumstances. It’s so much easier than searching the internet.
Once you have narrowed down your search to two or three companies, contact each one and ask them lots of questions about your final expense life insurance cover. Do all of this before signing up to any policy.
You might not like thinking about the end of your life.
Or talking about it with your loved ones. Making preparations for your death,
however, will lighten the load for family members who might have to foot the
bill for expensive medical bills and funeral costs. Funeral expense insurance
might sound like an unnecessary expense, especially when you have to pay other
insurance premiums, but it can provide your family with the end-of-life costs