Final Expense Insurance

Why Do You Need Final Expense Insurance?

Final expense insurance means financial security for your family, with benefits that can be accessed quickly. According to the 2013 General Price List Survey by the National Funeral Directors Association, the average cost of a traditional funeral is more than $7,045, not including cemetery costs. Factoring in cemetery costs, a traditional funeral can easily cost $10,000 or more. Covering funeral costs is a heavy financial burden for most people, especially with an unexpected death. Having a final expense insurance policy in place protects your family against financial hardship, which can be especially difficult when one is also grieving a loss.

What Are the Differences Between Final Expense Insurance and Life Insurance?

Life insurance is an excellent means of providing financial security for your survivors. If your family depends on your income, life insurance can partially replace the income lost due to your death. Life insurance also provides an inheritance for your heirs even if you do not have assets. To meet these objectives, most life insurance policies have a minimum purchase of $25,000 or more, more than needed for most funerals.

Final expense insurance, on the other hand:

  • Can be purchased in amounts less than $25,000, unlike most life insurance policies.
  • Pays claims quickly, often within a few days.
  • Offers much needed flexibility. It is not linked to a specific funeral home, cremation service provider or other funeral service provider, so you and your survivors are free to choose and change funeral service providers at any time.
  • Can cover additional anticipated family expenses. Such as airline transportation, mortgage payments, utilities and credit card debt.
  • Often has lower premium payments than alternative funeral insurance policies.
  • Requires fewer health requirements to qualify.

Final expense insurance is whole life insurance that accumulates cash value as premiums are paid. Payment plans may be made over a lifetime, in a single lump sum or in installment plans over 10 or 20 years. Premium payments remain level and your death benefit never decreases.

Once you’ve qualified for a policy and as long as you continue to make your premiums payments on time, the policy remains in force throughout your life.

Remember that because a final expense policy is not tied to a funeral home contract, there is no price guarantee at time of need. The policy will pay the death benefit to your designated beneficiary, who will use it to pay funeral costs and any other final expenses. But be sure to purchase sufficient final expense insurance to cover future price inflation.

Contact your advisor today for an in depth explanation of your options and to receive a personalized payment quote.