Young adults can no longer cruise through life like folks back in the 1970s. Gone are the days of reasonably priced healthcare and housing. It’s time to buckle up and secure yourself and your family financially, no matter the circumstance.
Final expense insurance covers nearly all funeral and post-death costs for the policyholder. Although widely known as “final expense”, your family can leverage it for any purpose besides that. It’s rather inexpensive and easy to get approved. It comes as a helpful added benefit to regular whole life insurance, only with lower premium rates that work in your favor. The usual final expense insurance amount ranges from $2000 all the way up to $50,000.
30% of all life insurance holders buy it to cover funeral expenses. The final expense has the same if not more perks than regular life insurance at much lower premiums- which justifies its popularity with insurance seekers of all ages. It cuts you a better deal and churns out a higher surplus at the end of the term.
But why get insurance for post-death expenses in the first place? As disheartening as this may sound, holding a funeral can be pretty expensive, and it’s not getting any better. Average funeral costs in the US jumped to a whopping $9.1k in 2020, according to the National Funeral Directors’ Association (NFDA).
Final expense insurance protects the grieving family members from the financial burden of holding a funeral. It covers the entirety of burial, funeral, and medical examination costs.
Besides, even if your family has the means to cover those costs, the insurance amount can help with their home’s stacking mortgage or the kids’ college tuition. Your family can use that final expense coverage for any purpose they want.
How Does Final Expense Insurance Work?
Final expense insurance helps people get maximum benefit at premium prices lower than the market standard. Let’s break this down with an example:
You feel the need to secure your family’s financial future in today’s uncertain economy, especially with certain health problems you have right now. Getting a decent whole life insurance seems pretty logical.
Any insurance firm you approach will make you go through extensive medical checkups. You’ll end up with higher premiums than you anticipated, and it just doesn’t look like a good deal anymore.
A final expense insurance rules out the medical checkups and high premiums- all the while giving you every benefit of a whole life insurance. It’s the best of both worlds. Plus, the amount your family gets from this insurance is tax-free.
Pros
- You don’t have to reveal medical records to the insurance company
- Your family can leverage the insurance amount for anything they want
- Unlike other health and life insurance, final expense coverage is easily accessible to applicants with poor health
- The benefit your family gets is not taxable
- Getting a benefit of up to $50,000 at lower than normal premiums is not uncommon with final expense insurance
Cons
- If you are a healthy young adult, you may end up paying more in premiums than your family receives after your death
- Final expense insurers are notorious for false advertising- review the terms well
- Some insurers may pressure applicants with health issues to go for a high-coverage plan to churn more out of them monthly
Do I Need a Final Expense Insurance?
Final expense premiums are lower for young people but provide the same benefits, much like a regular life insurance policy. It makes sense to pay a small monthly fee to cover an expense that can come up without notice. If you like to keep things predictable and want to safeguard your family end-to-end, getting a final expense insurance makes sense.
You are suffering from a pre-existing health condition
If you have a fatal pre-existing health condition, death itself becomes uncertain. You may not know, but you may be alive today and dead tomorrow. If you are suffering from any such condition, you should get the final expense insurance.
Many companies will provide you the final expense insurance without the need to complete a medical exam. You won’t have to worry about qualifying because they’re super-easy. However, it would help if you kept paying the premium on time to avoid uncertainty and policy termination.
You have a big family
Being in your late 20s or 30s with a growing family is reason enough for you to safeguard them financially. Although they may not depend on you for money later in life, it’s better to not make a rough guess and contact a policy issuer.
You want a better, more affordable life insurance option
You can burn through a lot of cash and even end up paying more than you get from life insurance, and that’s why 52% of Americans consider insurance not worth it. Compared to other policies out there, final expense insurance can be pretty affordable. The premiums tend to stay constant for a certain period. While the death benefit is smaller than a traditional life insurance policy, the mid-sized plans get you a better deal if chosen wisely.
Your funeral would be what you want it to be
Many people want their final ceremonies to be conducted in a certain way. Getting the final expense insurance will rid you of the inevitable financial worries of death.
When you go over your final expense insurance options, specify your requirements regarding your funeral. The insurer or your trusted beneficiary will reveal it only in the end to the mentioned individual. Your funeral service should be a representation of who you are and what you want. If you prepare for it from the beginning, it will help ease out the pain for your friends and family.
It puts your family and friends at ease
Your families, like many others, may spend more than necessary at the funeral out of love and respect for you. While this gesture goes to show their love and adoration, it can pile up final rites’ costs quickly. Getting insured for those costs rids your family of a heavy burden.
Leave Behind Memories and Love, Not Bills
There’s no harm in covering your family if it doesn’t cost as much as regular life insurance. Being younger works in your favor because it becomes grounds for lower premiums with the same benefits.
Final expenses can get cumbersome for families with lower resources. They add tension to the already sorrowful situation. Make sure to carefully review your options and go with a company that has an unmatched track record of treating its policyholders well.
