These plans are usually in amounts just enough to cover funeral, burial, ceremony, cremation, and whatever other final expenses may remain so that this cost is not passed on to surviving loved ones.
What you need to know…
People often ask me, “What do these plans cover?” “What’s included?” “How does it work?”
This tells me that Final Expense is greatly misunderstood or these types of questions wouldn’t arise. Final Expense is just life insurance. Plain and simple. You purchase a policy of $20,000, for example. When you pass away your beneficiary receives a check for $20,000. As I said, “It’s life insurance. It is simply a sum of money paid upon your death.
Now what you choose to do with the money is another conversation. More accurately, what your beneficiary chooses to do. You will name whatever party is going to be responsible for paying your funeral costs as your beneficiary. They will then pay the funeral home and take care of other matters related to your death. There are a lot of “little fees” that come together to add up to a lot of money.
For most people, $10,000 covers this pretty well, even if minimally. If you plan to have a more elaborate or expensive funeral, you might want a slightly larger policy.
If you want to use part of these proceeds to leave a little bit of cash to a loved one, you simply add that into the size of the policy you buy.
Below I go into specifics about these types of policies.
Final Expense Policies are Whole Life
This means they last your whole life. They should never be “term insurance”, which lasts only a designated amount of years, such as 10 or 20. For Final Expense, you want to be guaranteed that the policy will be in force when you die, and you never know how long you might live, so it needs to be Whole Life, nothing else.
The Premiums Never Increase
Whatever age you are when you first purchase the policy, that determines what monthly premium you will pay, and that stays consistent year after year. They are contractually guaranteed to never increase in price, even if your condition of health worsens.
You Cannot Be Cancelled for Any Reason
Any reason is other than the failure to pay for the policy. As long you keep your premium payments up, the policy will be non-cancellable by the insurance company, so you never have to worry.
These policies also build cash value, so you can select to automatically borrow from that cash value to pay for your premiums in the event you should forget to pay
Policies are EASY to Qualify For
No matter what your health condition: high blood pressure, high cholesterol, diabetes… even more, severe conditions such as COPD or congestive heart failure, chances are very good that I can find you a policy you can qualify for. For severe conditions, companies have a 2 or 3 year waiting period for death by natural causes. You will not select this type of policy unless you cannot qualify for any other type. It is used as a last resort so that you don’t have to go without coverage.