Final Expense Policy
A Final Expense policy is simply a life insurance policy generally
designed to help families handle all the expenses they will be
responsible for in handling their loved one’s wishes when they die. They
are generally permanent policies that do not expire as opposed to Term
insurance plans that are temporary and expire at a specific age or
length of time. Most companies offer these plans to individuals in the
50-85 age bracket. The death benefit is paid directly to the beneficiary
the insured selects, tax free. Policy face amounts can range anywhere
from $1000 to $40,000 or more depending on the life insurance carrier.
Rates are usually based on age, gender, whether you use tobacco or not,
and your health history. With funeral costs averaging $10,000 or higher,
it’s important that families are aware of what their loved one’s wishes
are regarding final arrangements so they can select the correct death
benefit.
Most companies that write this type of life insurance coverage offer
some form of permanent plan that will be guaranteed renewable for your
lifetime---you can’t out live it. Generally, this is a whole life policy
as opposed to a form of term insurance which has a life span of its’
own. The last thing you need to find out is that you have just
“out-lived” your term insurance and may not be eligible for a new
policy.
There are companies offering policies with no health questions
asked and no medical exams or blood and urine testing required. You may
have seen TV commercials or received offers in the mail advertising
these plans. Be careful, these guaranteed issue (you can’t be turned
down) plans are usually more costly because the insurer is accepting
risks with no questions asked and must charge a higher rate to everyone
in order cover their risks. You may be better off purchasing a policy
where you are being asked about your health history. Some companies will
offer you plan options based on your answers to health history
questions. Three possible plan solutions could be:
A standard Whole Life Policy with a level death benefit from the first day of coverage
A Graded Policy which may pay a reduced death benefit during the
first few years of coverage then increasing to the full amount after
that time has elapsed.
A Modified Whole Life Policy that would pay a death benefit of
only the amount of premiums paid on the policy plus compounded interest
during the first few years of coverage then the full amount after that
time has elapsed.
Most plans would pay the full face amount of the policy if death
during the early years was due to an accident. Consider your options in
making these important decisions regarding your final expense life
insurance.
As Seniors/Boomers we do have choices regarding how we want to
protect our loved ones and ourselves when it comes to handling our final
expense wishes. I think our generation has adopted an attitude that we
are not going anywhere any time soon. So much for wishful thinking! Take
the time to plan for it before it’s too late and our loved ones are
burdened with the responsibility.
Compare Us . .. . .
WWW.ENSURITYGROUP.COM
No comments:
Post a Comment