Final Expense Insurance
Final expense insurance is life insurance designed to provide a modest death benefit to help with expenses after death.
The money can be used for funeral or cremation costs, medical bills, debts, travel expenses, or other needs. Your beneficiary generally decides how the proceeds are used.
Most final expense policies do not require a medical exam, but the type of coverage you qualify for can depend on your age and health.
Types of Final Expense Coverage
A level benefit policy generally provides the full death benefit from the day coverage begins.
These plans usually require health questions but not a medical exam. People who qualify for level coverage generally receive the most favorable combination of benefits and premium.
Level Benefit
Modified or graded policies may be available when certain health conditions prevent someone from qualifying for level coverage.
These policies usually limit the benefit for death from natural causes during an initial waiting period, commonly two years. During that time, the policy may return premiums paid plus interest or pay a portion of the death benefit.
After the waiting period, the full benefit is generally available.
Modified or Graded Benefit
Guaranteed Issue
Guaranteed issue policies typically have no health questions and no medical exam.
Applicants who meet the insurer's age and eligibility requirements generally cannot be declined because of health. However, these policies usually include a waiting period for natural death and may cost more than coverage available through health-based underwriting.
For that reason, guaranteed issue is often best considered after determining whether other coverage is available.
Do I Need a Medical Exam?
Usually not.
Most final expense insurance uses simplified underwriting, which means answering health questions rather than completing a physical exam. Insurance companies may also review prescription or other available health information.
Because underwriting guidelines vary between companies, health conditions do not necessarily prevent someone from qualifying for coverage.
Will My Premium Increase or My Coverage Expire?
Most final expense policies are whole life policies.
Premiums are generally designed to remain the same, and coverage can remain in force for life as long as required premiums are paid.
Always refer to the specific policy for its guarantees and provisions.
How Much Coverage Do I Need?
That depends on what you want the policy to accomplish.
Some people want enough to cover funeral or cremation expenses. Others want additional funds available for bills, debts, or other family expenses.
We can help you compare different coverage amounts and premiums so you can decide what fits your needs and budget.
Who Receives the Benefit?
You choose the beneficiary.
When the insured person dies, the beneficiary files a claim with the insurance company. Once approved, the death benefit is generally paid directly to the beneficiary, who normally decides how the money is used.
Let Us Help You Understand Your Options
At Senior Insurance & Retirement Advisors, we help consumers understand the different types of final expense coverage available and how health, age, benefits, and premiums can affect their options.
If you would like to explore final expense insurance, contact us and we will be happy to help.