What is Final Expense Life Insurance, Also known as Burial Insurance and what are the Benefits?
Let’s start with the first part of the question, what is Final Expense insurance and is this something that I need? The policy holder is known as the insured and the insurance company is known as the insurer. Final Expense Insurance is a life policy that is usually a whole life policy that will cover the insured for long as they continue to make the premium payments in a timely manner. They also will accumulate cash value over time, that can be borrowed against for emergencies. These types of policies are sometimes referred to as Burial Insurance, because it is sometimes used to pay for funeral services. The policy amounts will range anywhere from $2,000 to $50,000. They are designed for individuals with health issues, that may not otherwise be able to become insured. Younger, healthier people most of the time will able to get policies that are less expensive with better benefits, because they are less likely to file claims. The pricing on the policies are determined by the age and health of the potential policy holder. The better the health, the lower the price of the policy. There are also Graded policies where the face value would be limited, due to health issues. What that means is that for the first two years the insurance company won’t pay the full face amount of the policy, they will only pay the premiums that have been paid, plus a pre-determined amount of interest on those premiums. It should still be affordable for the client, because if it isn’t it won’t help anyone if the policy lapses soon after being purchased due to the premiums not getting paid.
Should I apply?
Now if are interested in getting insured, but have health issues, this might be a viable policy for you. If you have been turned down for insurance, because the insurance company decided that you didn’t qualify for the policy that you applied for, then this is probably a good choice for you. Most of the time you will be able to qualify for a policy. There are policies available that don’t require you to take a physical, you would just need to answer a few simple questions so that the insurance company knows that you are in stable health. They will take people with health issues because if your condition warrants it, then they will only reimburse the premiums that are paid, plus a small interest amount. There are a few companies that offer this, so your agent should be able to get you insured with a highly-rated company.
How to purchase Final Expense Insurance
Well here is the insider's guide to buying Final Expense Insurance. There are two routes to take, Physical and Non Physical. There are different reasons for both and they will both get you different results. If you choose to not have an exam this will be more convenient and you won't have to worry about having a person come to your home and draw blood with a needle from your arm. This is also the fastest way to get approved. The price of insurance goes up as you get older and this is also the easiest way to get insured, However, it is more expensive than having a physical.
Now a physical exam with a life insurance policy is less expensive because the Life Insurance company won't have to take the word or your physician as to your health condition. They will have your blood pressure and urinalysis first hand. This will also take a little longer to get you approved and you will have to schedule and go through a physical. My advice, take the physical if you don't pass out when you see blood.
Let’s talk about some of the benefits. As I mentioned earlier the Whole Life Final Expense policies have cash values that build up over time. More importantly, they will leave the insureds family with a means to cover the final expenses. These include funeral expenses, which can run as much as $10, 000 plus. They can be used to pay for tax expenses that would come from probate. They can be used to pay tax expenses that the insured had, because if there was a debt, the taxes would have to come out of the estate that could put the ones left behind in a difficult situation that they might not have planned for. This can also be used to pay off medical or credit card bills, which could cause an additional financial burden on the family. The policy is set at a price and once it is established it can’t go up.
So this is Final Expense or Burial Insurance in a nutshell. This can be purchased online or through an agent that you might be acquainted with.
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