Final Expense Life Insurance
Final Expense or burial insurance for seniors, is not a product but a name for how that insurance is normally used. Burial insurance is a smaller cash value policy, that is available for older people that tend to have some health issues. It can be issued 3 different ways, level coverage, graded (modified) coverage, or guaranteed issue. Here, we'll provide you with all the relevant information you need.
Learn how a final expense policy can help cover your loved ones from unexpected burial expenses and the pain that comes with them. Enter your information above to get pricing or call us at 844-528-8688 for a personalized quote.
Since we all know that when we die someone will typically be responsible for arranging or paying for our funeral, it makes sense that we attempt to take care of this in advance. No one wants to leave the burden and stress of arranging and paying for a funeral to their surviving loved ones.
If it’s important to you that your final expenses like burial costs will be covered by life insurance rather than your surviving loved ones, then keep reading to learn how simple and affordable it can be for you to take care of your final expenses before you pass away.
What is Final Expense Life Insurance?
Final expense insurance, which is also referred to as funeral insurance, cremation insurance or burial insurance, is a whole life policy that is designated to pay for the final expenses that are associated with dying.
Generally, these expenses include funeral and burial costs, unpaid medical expenses, and nursing home or hospice fees that are not covered by health insurance or Medicare.
To be clear, Final Expense Life Insurance is not a type of insurance but rather a purpose for a life insurance policy (normally a smaller whole life policy). In fact, after you purchase your policy and then receive your it from the insurance company, the term “final expense life insurance” is typically not stated on the policy.
There are three basic types of life insurance products but the one used for burial insurance is typically whole life insurance which makes a great foundation for your final expense insurance for three great reasons:
- Whole Life provides coverage for Life – Your policy will remain in force over your lifetime, unlike term insurance which most policyholders generally outlive. Your insurer cannot cancel your whole life insurance policy unless you do not pay the premiums.
- Level Premiums – Once your policy is issued, the insurer cannot increase your premiums for any reason. Even if you become terminally ill or need to live the rest of your life in a nursing home, your insurance premiums will remain the same.
- Builds Cash Value – Just like a traditional whole life policy, your final expense insurance policy will build cash value over time that you can access for any reason through policy loans, withdrawals, or by surrendering your policy. In fact, even if you take a policy loan, your cash value continues to build cash value and earn interest because the loan is made by the insurer and your cash value remains intact.
Why Should I Buy Burial Insurance?
Since funeral insurance was designed for the senior marketplace, the insurance companies allow liberal underwriting guidelines, lower face amounts, and typically never require a medical exam or blood/urine test. Burial Insurance for seniors policies are very easy to buy with minimal information needed, and in most cases, very affordable to the policyholder.
Final Expense Insurance should be considered even if you have other life insurance because the policy will always be available when needed so loved ones will not have to cover funeral and burial costs. Many seniors who are still working have group life insurance through their employers that typically will cancel once you leave your job. The good news is burial insurance for seniors is very affordable, especially if taken care of sooner rather than later and no medical exam is required.
At this point, finding affordable burial expense insurance or final expense policy could be very difficult because of the impact on pricing by health issues that may have developed over your years of working.
Seniors who are in the following categories should consider burial insurance for seniors as a means of covering their final expenses rather than passing them on to surviving loved ones:
- Seniors who have term insurance policies that will expire before age 70
- Seniors who may have surrendered their life insurance policies during the last recession in order to make ends meet.
- Seniors that have life insurance through work without any other individual life insurance coverage.
- Seniors who have not considered life insurance because they have serious health issues and assume they would not qualify.
How does Burial Insurance Work?
As we explained earlier, final expense or burial expense insurance is like any other life insurance but has a specific purpose: pay for your burial expenses when you pass away so your surviving loved ones won't have to.
Normally the applicant will name a trusted family member or friend to be their designated beneficiary and use the death benefit to pay for funeral expenses and other lingering expenses such as unpaid medical bills or nursing home expenses. The benefit available is well worth the cost.
It’s important to note that your beneficiary can use the death benefit in any manner they choose, so it’s important to designate someone you trust and speak to them about your final expense insurance and other final directions informaation either before or soon after you purchase it.
Most insurance companies will offer coverage from as low as $2,000 and up to $50,000 depending on your age and the company you select. Although you will not be bothered with a medical exam, there will be a number of health questions on the application that must be answered truthfully.
Do I Have to Medically Qualify for Final Expense Life Insurance?
To qualify for the most affordable rates, you will have to medically qualify for funeral insurance. This means that your answers to the medical questions on the application will determine if you qualify for affordable burial insurance costs, and there will be no medical exam. The good news is that most life insurance companies offer three types of insurance policies so that every senior (up to age 85) can qualify for a final expense policy.
- Level Benefit Plan – With the level benefit plan, your life insurance coverage starts the day your policy is approved and issued. There is no waiting period and your premium is going to be the lowest among the three types of plans.
- Graded Benefit Plan – The graded benefit plan is available for applicants who do not medically qualify for a level benefit plan. “Graded benefit” means the full death benefit is not available until after a waiting period of 2 or 3 years.
For example, Richard did not qualify for a level benefit plan and was offered a graded benefit plan with a $15,000 death benefit. If Richard should die in the first year, his beneficiary will receive 25% if the death benefit or $3,750. If Richard passes away in the second year, his beneficiary would receive 50% of the death benefit or $7,500. If Richard dies in the third year the beneficiary would get 75% of the death benefit or $11,250. If Richard dies in the fourth year of later, his beneficiary would receive 100% of the death benefit.
- Guaranteed Issue Plan – The guaranteed issue plan should be considered your last resort because it is more expensive than the level benefit and graded benefit plans and there is a two or three-year waiting period when the life insurance company will not pay the full death benefit if your death is due to natural causes. They will, however, pay the full death benefit if your death is the result of an accident.
During the waiting period, your death benefit will be equal to the amount of premium paid to the life insurance company plus an additional percentage of 5 or 10%. Although this plan has a waiting period and is somewhat pricey compared to the level benefit plan, you will not be denied coverage for any health issues as long as you are in the eligible age group.
How Do I know How Much Final Expense Life Insurance to Buy?
The majority of your final expense costs after you pass away is going to be your funeral service and burial expenses. Although we cannot determine how much if any, your medical or nursing home expenses will be, we can get very close on the death benefit you will need to cover your funeral expenses.
There are several really good resources on the internet that will help you estimate your funeral costs based on the area you live in. One of the resources that we recommend is Parting.com because they offer substantial information about funeral planning and the costs involved. Here is what an average funeral and burial service will cost and the services involved according to Parting.Com:
“Today, the average North American traditional funeral costs between $7,000 and $10,000. This price range includes the services at the funeral home, burial in a cemetery, and the installation of a headstone. While cremation is gaining in popularity, the traditional funeral is still the most popular manner for disposing of the deceased.
Here is a reasonable "ballpark" estimate of the main funeral costs.
It's important to notes that funeral prices vary considerably between funeral homes and geographic areas of the country,
- fee for the funeral director's services: $1,500
- cost for a casket: $2,300
- embalming: $500
- cost for using the funeral home for the actual funeral service: $500
- cost of a grave site: $1,000
- cost to dig the grave: $600
- cost of a grave liner or outer burial container: $1,000
- cost of a headstone: $1,500
In the above example, total costs would approximate $9,000....and that's just for the "main" items. There could be additional charges for things like placing the obituary in the newspaper and buying flowers.” Read the Article
This provides you with an average cost so you can get an idea of your starting point. Your cost will be impacted by the area you live in and any additional services you would like to add to your service. It’s important to note that arranging a funeral service is like buying a wedding dress and the seller always has the advantage. If you plan ahead and leave your “last wishes” with your beneficiary, they will be less likely to be taken advantage of.
Funeral Insurance Companies
There is no "one size fits all" when it comes to funeral insurance. What final expense insurance company and plan fits you the best will depend on your location, health (no medical exam), and budget. For this reason we carry several of the top rated final expense insurance companies, this ensures that we find the right plan at the right price to fit your needs. See the review page of our best final expense insurance companies, to help you choose what insurance company might be right for you.
What Should I Expect to Pay for Burial Insurance for Seniors?
The cost of your final expense Insurance will depend on your age, your health, your death benefit, and the life insurance company. We can however offer actual quotes for a level benefit policy.
These rates are based on a $20,000 death benefit for a male and female non-smoker living in Wisconsin:
Age of Applicant
50 years old
55 years old
60 years old
65 years old
70 years old
75 years old
80 years old
As you will notice, the life insurance costs for men are higher than the costs for women. This is because women typically live longer than men and therefore the insurer will have more opportunities to collect premiums. Also, the rates get higher as you get older so the rates will never be lower than they are today. This will be the case with all final expense insurance companies.
How Will I know Which Final Expense Plan is Right for Me?
The best Final Expense plan will be one that is provided by an insurance company that is highly rated, delivers outstanding customer service, pays claims as quickly as possible, requires no medical exam, and offers rates that you can afford.
Here is when LJM Life Insurance can advocate for you. We are independent agents who specialize in “senior products” will typically represent at least six of the most competitive final expense life insurance companies and will also offer level benefit, graded benefit, and guaranteed issue plans.
Since we are independent insurance professionals we represent multiple final expense companies, and are not “captured” by any one company that only accepts “cookie-cutter” applicants. In other words, we are happy to work on unusual cases that might be tough to issue, to find the most affordable burial and funeral insurance for seniors on the market today.
Your independent LJM Life Insurance agent will shop your application with all of the companies they represent and then deliver the best final expense insurance solution for your circumstances and monthly budget.
Your LJM Life Insurance agent will usually know in advance which insurance company will have an appetite for your particular health issues, they will walk you through the application process, and they will do everything possible to get your policy issued. Remember, your agent is paid by the insurance company and they are only paid after a policy is issued and a down payment is collected. Call 844-528-8688 today for a free, unbiased final expense life insurance consultation.