Burial Insurance aka Final Expense Insurance
Final Expense Insurance is a type of life insurance that is specifically designed to cover the costs associated with a person’s final expenses, such as burial costs. These insurance plans typically offer coverage ranging from $2,500 to $40,000, and can be used for various expenses including burial costs, bill payments, mortgage payments, and other needs.
One of the main advantages of Final Expense Insurance is that it pays out immediately upon the policyholder’s death, unlike standard Life Insurance which can take months to pay out to the beneficiary.
When planning for the end of life, there are generally three options to consider: doing nothing and letting someone else take care of it, purchasing a pre-arranged burial plan from a funeral home or purchasing some form of life insurance. Option 1 is not a good choice for most people, so options 2 and 3 are often the better options. Option 2 involves purchasing a funeral and burial package in advance from a funeral home, which can be costly, often costing more than $10,000. If the payment is not made upfront, the funeral home may allow for payments to be made, but the policyholder’s loved ones may still be responsible for paying off any remaining balance if the policyholder passes away shortly after purchasing the plan.
Option 3, purchasing a Final Expense Insurance policy, allows the policyholder to have their funeral and burial at the funeral home of their choice, with the costs remaining the same. However, with this option, the policyholder can make small, scheduled payments while they are still alive, potentially saving thousands of dollars in the event of an untimely death. Final Expense Insurance is relatively simple, as it only guarantees that the policyholder’s family will not be burdened with funeral and burial expenses upon their death. It does not offer the same level of coverage as a permanent or term life insurance policy.
Most insurance companies only require policyholders to meet a certain age and pay a certain amount in premiums to be covered at the time of their death, and do not require a medical examination or perfect health. This is because the insurance company is not taking on the risk of insuring the policyholder for a specific period of time, but rather collecting premiums to cover the policyholder’s final expenses.
Final Expense Insurance can be a useful option for people who are planning for their end-of-life expenses and want to ensure that their loved ones are not left with financial burdens after they pass away. It can provide coverage for funeral and burial costs, as well as other expenses that may arise. It is important to carefully consider all options and choose the one that best meets your needs and financial situation. It may also be helpful to consult with a financial advisor or insurance professional to determine the best plan for you.