Final Expense Life Insurance: The Ultimate Guide
Posted in Final Expense last updated on March 16, 2021
Funeral services, burial plots, end of life care, and even time off work for grieving loved ones. These are all expenses that you will leave behind. But don’t worry, Final Expense Life Insurance can help.
Have you thought about who will pay for your final expenses when you die?
Sadly, a growing number of people are relying on savings and crowdfunding sites like GoFundMe.
In fact, a recent search for “funeral expenses” on GoFundMe found 1,132,578 fundraisers!
Only 59% of people own life insurance but of course 100% of people will eventually need it.
We should all be more prepared.
What is Final Expense Life Insurance?
Final Expense Life Insurance, also known as Burial Insurance or Funeral Insurance, is life insurance designed to pay for the bills that your loved ones are left with when you pass away.
Unlike traditional term life insurance, Final Expense Life Insurance is permanent, meaning the insurance will last your entire lifetime as long as you continue paying the premiums.
The monthly premiums will never go and and the death benefit will never go down.
These polices can be purchased over the phone, often times in under 20 minutes.
There is no medical exam. No one will come to your home.
How Much Coverage Can I Get?
Remember that Final Expense Life Insurance is designed to pay for the cost of your funeral and similar end of life expenses.
Therefore, the amount of coverage is limited, by design.
Typically, most insurance companies offer coverage from $1,000 to $50,000.
The most popular amounts are $10,000, $15,000, and $25,000.
With today’s average funeral costs running between $7,000 to $10,000, Final Expense Life Insurance has you covered.
Will I be Approved for Final Expense Life Insurance?
Unlike traditional term life insurance that has 12 or 16 different rate classes, Final Expense Life Insurance companies will normally offer one of three options:
Level Benefit Plan
A level benefit plan is the best offer you can get. Level benefit plans offer the full death benefit coverage the day your policy is put in force. There is no waiting period and you will pay the lowest price the company offers.
If you are able to honestly answer “No” to all of the health questions on the application, you will typically be offered a level benefit plan.
Graded Benefit Plan
A graded benefit plan has limits to it. Most graded plans will only pay out 30% of the death benefit the first year and 70% of the death benefit the second year. The full death benefit is paid out starting in year 3 going forward.
Graded benefit plans will cost 40 – 50% more than level benefit plans.
Insurance companies have a separate set of health questions to identify people who will be offered graded benefits. If you answer “Yes” to any of these questions, you will likely find yourself with a graded benefit offer.
Modified Plan
A modified plan is offered when you are considered a high risk to the insurance company. Modified plans typically don’t offer any coverage at all during the first two to three years of the policy. Instead, if you were to pass away during those first two year, your beneficiaries would receive all the premiums you paid in to the policy plus some interest.
Once again, you’ll find a separate set of health questions to identify modified plan recipients. Answering “Yes” to any of these questions will land you a modified plan offer.
Most times there is no reason to accept a modified plan offer from an insurance company. Guaranteed Issue life insurance policies are a much better and less expensive option.
Who Can Get a Policy?
The short answer is anyone age 0-85.
Most Final Expense Life Insurance policies are designed for people age 50-85 and not all policies are available to all people but chances are we can find a policy for you.
People commonly think about insuring themselves after age 50 but another popular option is to buy insurance for your parents.
As our parents get older, we begin thinking about their final expenses and how we may be responsible for them. We can find policies for parents as long as they participate in the application process with you.
Do the Benefits Have to go Towards my Funeral Expenses?
While the main purpose of Final Expense Life Insurance is to pay for funeral or burial expenses, the benefit amount can actually be used for anything, even if you’re still alive.
Unlike a prepaid funeral plan, life insurance benefits are paid tax-free directly to the beneficiary, leaving them to use the money however they see fit.
In addition to the funeral, they may pay for end of life medical expenses, leftover debt, or even taking time off work to grieve.
The point of life insurance is to relieve the financial burden that can sometimes accompany death.
Final Expense Life Insurance does exactly that, whatever that may mean to you.
Pros & Cons of Final Expense Life Insurance
Pros
No Exam. Apply over the phone typically in 20 minutes. Nobody will visit your home or perform a medical exam.
Lenient Underwriting. Typical term and whole life insurance policies dig deep into your medical and personal history and can be strict when it comes to underwriting. Final Expense Life Insurance is much more lenient with their underwriting.
A Plan for Everyone. With Level, Graded, Modified, or Guaranteed Issue plans, we truly can find a plan for everyone.
Permanent Coverage. Your policy will last your entire lifetime. As long as you continue to make your monthly payments, your coverage will be available for your loved ones.
Cons
Limited Coverage Amounts. With coverage amounts normally capped at $50,000, Final Expense Life Insurance is not for everyone. It’s designed for a specific purpose, covering funeral expenses. If you’re looking for more coverage, consider a term or whole life policy.
Age Limits. While we can find a plan for anyone 0-85, most Final Expense Life Insurance policies are designed for those 50-85. If you’re younger than 50, ask us about other options.
Graded and Modified Plans. If you are approved for a Level plan, fantastic. Graded plans can be a great option too if you’ve got some challenging prescriptions and medical history But Modified plans are often a waste of money. Consider Guaranteed Issue plans instead.
How Much Does Final Expense Life Insurance Cost?
Here are some sample Final Expense Life Insurance policy quotes for men and women of different age groups*.
| Age & Sex | $5,000 | $10,000 | $15,000 | $25,000 |
|---|---|---|---|---|
| 50 year old male | $15.37 | $27.73 | $40.08 | $64.80 |
| 50 year old female | $13.03 | $23.06 | $33.08 | $53.13 |
| 60 year old male | $22.72 | $42.42 | $62.13 | $101.54 |
| 60 year old female | $18.04 | $32.87 | $47.70 | $77.36 |
| 70 year old male | $36.47 | $69.93 | $103.38 | $170.30 |
| 70 year old female | $28.07 | $53.12 | $78.18 | $128.29 |
*Premiums shown are sample rates from various final expense life insurance companies. Rates are for a Level Benefits for non-smokers and are intended to be an example of what premiums may be. These sample rates should not be considered a quote for your particular case as each case is underwritten individually.
What is the Application Process Like?
This may sound strange but we live in exciting times when it comes to life insurance. I know, life insurance and exciting don’t exactly go together. But it’s true.
Gone are the days when a stranger comes to your house, sits down at your kitchen table, and spreads out life expectancy charts and life insurance brochures.
Final Expense Life Insurance can be purchased right over the phone. In fact, that’s the only way we do it.
It’s part of our Life Guide Guarantee:
1. No home sales visits
2. No pressure
3. No obligation (even after applying)
4. Only the policy that fits you best
When you’re ready to apply, we’ll ask you some basic questions about you and your health. Then the insurance company will verify your prescription history electronically. That’s it!
In most cases, we’ll get a decision back from the insurance company within 30 minutes with some taking a day or two.
Get started with an online quote today.
About Castaline Life Insurance
Castaline Life Insurance Agency is led by Jeff Smith, a devoted husband and father of 4.
As family providers ourselves, we understand the burden you feel to protect the ones you love.
Our Life Guides help anxious, worried, and uncertain people find peace of mind through Final Expense Life Insurance.
We offer a simple 3 Step process:
- Determine how much life insurance you need.
- Provide instant quotes.
- Review your quote and help you apply.
When it’s all done, you’ll feel calm, relaxed, and confident knowing you’re now a Family Protection Hero.
