It’s never easy to prepare oneself to accept the inevitable or to contemplate the pain involved in losing a loved one. As a result, most people don’t find the process of purchasing a final expense policy enjoyable. Unfortunately, this can lead to people rushing through the process of shopping for a final expense insurance policy, leaving them ill-prepared when the time comes to use it.
But the truth is, that in many ways shopping for a final expense policy (when done right) can be therapeutic because, unlike many other types of complicated insurance products, most final expense insurance policies are easy to understand and provide an important answer to how a family will pay for a loved one’s burial when they pass.
So, instead of avoiding the topic, we’re going to address it head-on in this article and discuss 5 steps you can take to find the best final expense insurance policy for you and your family.
Understand the product
Final expense insurance is a type of life insurance that is designed to cover the costs associated with end-of-life expenses, such as funeral and burial expenses, outstanding medical bills, and other final expenses.
Simply put, it is a contract between a policyholder and an insurance company, whereby the policyholder agrees to pay a regular premium, and upon their death, the beneficiary receives a cash payout that can be used to cover the costs of the funeral and other end-of-life expenses.
Final expense insurance policies are typically smaller than traditional life insurance policies and are designed to be more affordable and easier to obtain, making them a popular option for those who want to ensure that their loved ones are not burdened with the financial costs of their passing.
Compare different types of final expense policies
Types of final expense insurance policies:
There are two main types of final expense insurance policies:
- Guaranteed Issue: This type of policy does not require a medical exam or health questionnaire. As long as the applicant meets the age requirements, they are approved for coverage. However, the premiums for guaranteed issue policies are generally higher than those for other types of insurance due to the increased risk to the insurer. Guaranteed issue final expense policies will contain a graded death benefit.
- Simplified Issue: This type of policy requires a medical questionnaire but typically does not require a medical exam. Simplified issue policies have lower premiums than guaranteed issue policies, but the applicant must meet certain health requirements to be approved for coverage. Simplified issue policies are a good option for those who are in relatively good health but may not qualify for traditional life insurance due to their age or health history.
Graded death benefit.
Graded death benefits are “clauses” written into all guaranteed issue life insurance policies which place either a two or three-year waiting period on the policy before it will begin to provide a death benefit for natural causes of death. For this reason, simplified issue life insurance policies are generally considered a much better option for those who can qualify.
Determine your needs
Preparing for the end of life can be a difficult task, but purchasing a final expense insurance policy can help ease the burden on your loved ones. However, before you begin shopping for a policy, it’s important to determine your needs. Here are some tips to help you get started:
- Calculate the coverage amount: The first step in determining your needs is to calculate how much coverage you need. Consider the cost of your funeral, any outstanding debts you may have, and any other end-of-life expenses. This will give you a good idea of how much coverage you need.
- Determine your budget: Once you know how much coverage you need, it’s important to determine how much you can afford to pay for a policy. Final expense insurance policies have premiums that can vary widely, so it’s important to shop around and find a policy that fits your budget.
- Consider your age and health: Your age and health can also play a role in determining your needs. If you’re younger and in good health, you may be able to get a lower premium by opting for a policy that requires a medical exam. If you’re older or have health issues, a guaranteed issue policy may be a better option.
- Look at the benefits: Final expense insurance policies can offer a range of benefits, such as accelerated death benefits, which allow you to access a portion of your death benefit early if you are diagnosed with a terminal illness. Look at the benefits offered by each policy and determine which ones are important to you.
- Consider your family’s needs: Finally, consider your family’s needs when determining your own. Will your loved ones be able to cover the cost of your funeral and other expenses without your help? If not, you may need to consider a higher coverage amount.
By taking the time to determine your needs, you can find the best final expense insurance policy for you and your loved ones. Remember to shop around and compare policies before making a decision. With the right policy in place, you can have peace of mind knowing that your loved ones will be taken care of when the time comes.
Research the market
Preparing for the inevitable can be a difficult task, but purchasing a final expense insurance policy can help ease the burden on your loved ones. However, with so many options available, shopping for a final expense policy can be overwhelming. The key to finding the right policy for you is to research the market and understand what each policy offers. Here are some tips to help you get started:
- Determine your needs: Before you begin shopping for a policy, it’s important to determine your needs. Consider how much coverage you need, your budget, and any other factors that are important to you.
- Research the insurance companies: There are many insurance companies that offer final expense insurance policies, and it’s important to research them to find the best one for you. Look for companies that have a strong financial rating and a good reputation in the industry.
- Compare policies: Once you’ve narrowed down your list of potential insurance companies, it’s time to compare policies. Look at the coverage amount, premiums, and any exclusions or limitations that may apply. Be sure to ask questions about anything you don’t understand.
- Consider the application process: Some final expense insurance policies require a medical exam, while others do not. Determine which application process is right for you and be prepared to answer questions about your health and medical history.
- Understand the fine print: Before signing on the dotted line, make sure you understand the fine print of the policy. Be aware of any restrictions, such as waiting periods or limitations on coverage.
By taking the time to research the market and understand your options, you can find the best final expense insurance policy for you and your loved ones. Remember to ask questions and read the fine print before making a decision. With the right policy in place, you can have peace of mind knowing that your loved ones will be taken care of when the time comes.
Ask a lot of questions
Any time you decide to purchase a life insurance policy, it’s always a good idea to ask a lot of questions. This way you can be sure of what you’re purchasing, but also, sometimes you might get an answer to a very simple question that you didn’t expect! Questions we always recommend our clients to ask would include:
What do I need to do to qualify? By asking this question you can usually determine what “kind” of final expense insurance policy is being offered to you.
Does the policy being offered to you contain a graded death benefit? If so, how long will you need to wait until this policy would offer complete coverage for both accidental causes of death and natural causes of death?
Will this policy ever end? Are you being offered a whole life final expense insurance policy or a term life insurance policy with a small death benefit?
Level death benefit? Does the insurance policy you’re being offered contain a level death benefit for the life of the insurance policy, or will the death benefit decrease over time?
Level premium? Will the price you pay for your insurance today, be the same price you will need to pay 5, 10, 15, 20 years from now? If not, what will the price change too?
Check the Company’s Reputation and Financial Stability
Lastly, one of the most important aspects of purchasing final expense insurance is ensuring that the company you choose is reputable and financially stable. Key factors to consider when checking a final expense insurance company’s reputation and financial stability.
- Company Ratings
One of the easiest ways to assess a final expense insurance company’s reputation and financial stability is to look at its ratings from independent rating agencies. These agencies, such as A.M. Best, Moody’s, and Standard & Poor’s, rate insurance companies based on their financial strength and claims-paying ability. Ratings range from A+ to F, with higher ratings indicating stronger financial stability and higher claims-paying ability. It’s important to note that not all agencies use the same rating scale, so be sure to research the different scales and what they mean.
- Company History
Another important factor to consider when checking a final expense insurance company’s reputation is its history. Research how long the company has been in business and whether it has had any major financial or legal problems in the past. A company with a long history of financial stability and positive customer experiences is generally a good indicator of a reputable and trustworthy provider.
- Customer Reviews
Customer reviews can provide valuable insight into a final expense insurance company’s reputation and customer service. Look for reviews on the company’s website, as well as third-party review sites. Pay attention to what customers are saying about the company’s claims process, customer service, and overall experience.
And there you have it, our top 5 ways to find the best final expense insurance policy. So now if you’re ready, our experienced team is here to help you navigate the process every step of the way!