End-of-career expense life insurance: is it for you?

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While death is certainly guaranteed for all of us, the cost of death is not necessarily cheap. Statistics of the National Association of Funeral Directors (NFDA) show that families paid an average of $7,848 for funerals with burial in 2021. However, this figure does not include the cost of a burial vault, opening or closing the ground, or the cost of a tombstone, which can easily tack thousands more on your bill.

And, if you were hoping to escape those costs by opting for a cremation, it may not save you much. NFDA numbers show that even the cost of a funeral with cremation was $6,971 at last count.

Because a person’s final expense bill is unavoidable, many people choose to have a life insurance policy. While some opt for more robust policies with large death benefits, a certain type of life insurance – final expense insurance – may be ideal for someone who only needs a small benefit. of death to cover his final expenses upon his death.

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Final expense insurance is life insurance designed to cover the costs of your final disposition as well as any funeral or celebratory services that take place. These policies may also be referred to as funeral insurance or funeral insurance and are generally offered for lower amounts than traditional life insurance policies.

Other interesting factors to note regarding final expense life insurance include:

  • You won’t need a medical exam, so anyone can qualify, regardless of their medical condition.
  • Since coverage amounts tend to be low (ie, $5,000 to $35,000 per policy), monthly premiums can be very affordable.
  • It is possible to take out this coverage up to the age of 80.
  • You can usually pay your premiums once a year or once a month.
  • Your beneficiaries will receive a cash payout that they can use to cover your final expenses.
  • Your policy may pay dividends depending on the issuer.
  • You will pay a fixed premium for the duration of your policy.

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Because final expenses life insurance is offered in low amounts and without a medical exam, this type of insurance coverage is intended for seniors who no longer need life insurance to replace their income.

Since final expense life insurance can remain in effect until age 100 or even beyond, this type of insurance can be a good option for seniors and provide peace of mind. much-needed spirit for anyone who wants coverage their family can rely on. . However, you should make sure to shop around and compare offers from at least three providers before choosing one.

In addition, in some cases, waiting periods apply to final expense life insurance policies. When a policy has a waiting period, your coverage will not be in effect until you have paid premiums for a specified period, which can be up to two years. So when considering options, find out about waiting periods and make sure you get a policy that meets your needs.

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According to progressive, final expense life insurance starts at around $53 per month, although rates vary depending on your age and the death benefit your policy offers. If you want the best value in terms of final expense life insurance, your best bet is to shop around until you find a policy from a reputable company with the lowest monthly or annual cost. possible low.

To provide examples to use as a basis for comparison, we have taken advantage of Fidelity Life Final Expense Life Insurance Website to get quotes online, and found that a typical 65-year-old retired woman in excellent health could get $10,000 in final expense insurance for about $56 a month.

Meanwhile, a 75-year-old woman would pay just over $86 per month and a 55-year-old woman would pay just over $40 per month.

While terminal expense insurance is intended for seniors who cannot be approved for other types of life insurance coverage, our research has shown that a 30-year-old woman in excellent health could get 50,000 $ insurance for as little as $15 a month because at a young age she has a significantly longer life expectancy.

In many cases, final expense insurance is issued as a guaranteed acceptance life insurance policy, so you don’t have to pass a medical exam to qualify if you have serious health issues. health. However, if you can pass a health exam, you should also shop around for term life insurance and compare the cost to your final expense life insurance options. Both types of policies can help you leave money for your heirs to cover your final expenses, but term life insurance is often a cheaper option for those who are medically eligible.

Find out what a term life insurance policy will cost at Policygenius.

Like other types of life insurance, end-of-career expense insurance pays a death benefit to your beneficiaries, which they receive in the form of capital. This means that your beneficiaries have the freedom to use the proceeds of your policy as they wish.

That being said, final expense life insurance is meant to cover – you guessed it – your final expenses. This can include the cost of your funeral and burial or cremation, the cost of disposing of your assets, living expenses incurred at the end of your life and more.

Families also use final expense insurance to cover expenses you might not even think about in advance — things like flowers, newspaper obituaries, and even unpaid medical or credit card bills.

It’s even possible to assign a final expense life insurance policy directly to a funeral home, although your heirs can also pay cash for services and wait for reimbursement from the final expense policy. If your heirs choose to use the life insurance policy to pay a funeral home directly, they must request an itemized bill for all goods and services they request, which is their right under the Federal Trade Commission Funeral Rule.

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Since final expense coverage can be expensive for what you get, you’ll want to first see if you can qualify for cheaper term life insurance coverage, which may offer a similar benefit. But if you can’t get term life insurance and you’re worried your heirs will have enough money to pay for your end-of-life expenses, then end-of-life expense life insurance might be a good choice, especially if you can get a policy with no waiting time.

End-expense life insurance isn’t right for everyone, but seniors who want to live out the rest of their lives knowing that their end-expenses will be covered and loved ones won’t have to struggle to pay the costs. grieving funeral should explore whether final expense life insurance is right for them.

Learn more about final expense life insurance at Policygenius.

Want more life insurance options? Read CNN Underscored’s guide to the different types of life insurance.

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