Final Expense Life Insurance policies are specifically designed for people that are looking to make sure they leave money to loved ones so that they aren't stuck with paying bills when they die. The policies are typically whole life policies that last for your entire life and people buy them for a variety of reasons. Perhaps they have debt that beneficiaries will need to pay off, or they simply don't want to burden loved ones with the cost of burial and funeral expenses. Final expense life insurance is pretty much the same as any other life insurance, however you can typically get policies with small death benefits starting at $5,000 going up to $50,000 of coverage. You can get coverage even if you aren't in perfect health and have pre-existing health conditions.
When I buy a final expense policy is their a waiting period before the death benefit is in effect?
The answer is yes and no. There are various types of final expense policies. If you are in fairly good health, you can get a policy that does not have a waiting period and the death benefit is immediately available. However if you do have pre-existing health conditions you may only qualify for a policy that has a waiting period. Depending on the insurance company there might be a two or three year waiting period before 100% of the death benefit is in effect.
Does my family have to use the death benefit proceeds for funeral expenses?
The death benefit for a final expense policy is just like any other life insurance policy death benefit. Beneficiaries can use the funds in any way that they choose.
Will premium payments stay the same or will they increase sometime in the future?
Premiums for final expense policies will stay the same for the life of the policy. Since the policy never expires the premium doesn't change and stays level for the life of the insured.
Is their cash value build up in whole life final expense policies?
It is possible to build up cash value in a final expense policy. However I wouldn't count on using cash value to pay premiums in the future, or use these policies as investments. It takes years to build up a decent amount of cash value and since most people buy final expense policies in their 50s,60s or 70s you likely won't see enough cash value to stop paying for the policy. So while you may have some cash value, I wouldn't count on it in the same way as with a regular whole life policy.
What do final expenses policies cost?
Final expense policies can range in cost from $20 for a younger healthier person in their 50s to several hundred dollars per month for someone in their 70s who may have a pre-existing health condition.
When it comes to final expense life insurance pricing can vary greatly and you really need to get a customized quote that is based on your age, coverage amount, and overall health status. If you are looking for this type of insurance for your mom, dad or spouse, the more information you have about their health, the easier it will be for us to provide you with an accurate quote.