I know when the time came to bury my in-laws and they had pre-need funeral insurance it certainly helped make life easier at an already difficult time. This may be something for you to take care of before your time is up, to make it easier for your love ones!
What Has to Happen?
When a loved one passes away, you have to make all of the arrangements for their final resting place or cremation. Hopefully you will have spoken with them about what they want and you will know their wishes. But then the question is who is going to pay for this?
Do you know the average cost of a funeral in the US is over $7000? That's a shocking amount of money to many people. And you would have to have it NOW! There's no waiting. Did your love one leave money for this? Can you afford it? Are there family members who will chip in?
But you can save your family the anguish of finding money for your funeral by doing some final expense insurance planning.
Where Do I Start?
- The first thing you want to do is decide if you want to be buried or cremated.
- Next, will you leave any debts behind?
- Do you want to leave any extra money to family members?
The next step is to find an independent life insurance agent who specializes in working with seniors. They will have multiple options for you to consider.
What Kind of Policy Should I Look at?
You should consider a permanent policy for final expense planning.
- You want a policy that will be with you for your entire lifetime and not end a year or two before you need it.
- You want a policy that will have the same premium and face amount for the entire life of the policy.
- You are looking for a universal life insurance policy or a whole life insurance policy.
- You are not looking for a term policy, because once the term is up and you have to apply again, the price will be significantly higher, and you may be too old to get any more coverage.
The policy you choose will mainly be determined by 2 things. The amount of coverage you want and your health.
- If you want $25,000 or more coverage, the least expensive choice will be a universal life policy. You will have to take a medical exam where they will take blood and urine samples, and the insurance company will review your doctor records. This type of insurance is fully underwritten, meaning the insurance carrier will look at your health, health history, family health history and more. To qualify for this policy you must give the most health information to the insurance company.
- If you want to skip the exam and apply for a simplified issue (less stringent underwriting criteria) policy you are looking for a whole life policy. You have to be in fairly good health to qualify for this coverage. However, there is no exam, and they do not review your medical records. The insurance carrier will check several databases and your application must agree with those results. These policies will insure you from $2,000 up to $40,000 of coverage.
- If you can't qualify for either of the above policies there is another option. It's a guaranteed issue policy. As there are no medical requirement, anyone can qualify. The death benefit is only paid out after a 2 year waiting period. Before that the premium is returned with interest. You can purchase $2,000 up to $25,000 of coverage.
You may not know which of these policies would be best for you, but your agent will. Also, there are some minor underwriting differences from one company to another. By having an agent help they can steer you to the company that will accept your application rather than declining you coverage.
The Bottom Line
The best thing you can do when looking to buy pre need funeral insurance (also called final expense insurance) is to speak with an independent life insurance agent. They will help you find the best policy for your needs. They have access to many different carriers, and can find you the one that will insure you for the least cost.
If you have any questions, you know we are here to help!