Final Expense Life Insurance
Insurance is an agreement that is represented by a policy whereby an entity or an individual receives protection from financial loss or unexpected tragedy and loss. An insurance policy is supposed to provide protection from uncertainty of the future. There are four primary types of insurance, i.e, life insurance, health insurance, disability insurance, and auto insurance. There are many more categories that fall under these four primary types. Final expense life insurance is a kind of insurance that falls under life insurance. It’s primary and main purpose is to cover the medical, bills, legal fees and all other funeral expenses of an individual when he/she dies. It is also referred to as burial or funeral insurance and is predominant among seniors and elders. This will ensure that there will be no financial deficits in the event of the individual’s death. Final expense life insurance has plenty of advantages to the individual and his/her family.
Categories of Final Expense Life Insurance
The application of a funeral expense life insurance has two categories. There is the simplified issue policies and guaranteed issue policies. The simplified issue policy doesn’t require the client to do any medical examinations. However, the client is required to answer certain medical questions. On the other hand, a guaranteed issue policy doesn’t require the client to answer any medical questions. Guaranteed issue policies are mostly limited to people whose age ranges from 40 – 60 years old and are regulated to a coverage $25,000. Furthermore, a guaranteed policy doesn’t bother to distinguish smokers and non smokers whereas a simplified policy is concerned. According to recent studies and research, approximately 90% of final expense life insurance policies were simplified issue policies. Final expense life insurance policies have some typical characteristics that distinguish them from other policies.
Categories of Final expense Life Insurance Policies
Final expense policies can also be categorized into two policies. These are the term policy and the permanent whole life policy. A term insurance policy has a contract that extends to 10, 15 or even 20 years. It terminates at the age of 70, 75 or 80 years. A permanent whole life policy is available for a lifetime until the person dies or until the agreement matures. Though the premiums must be fully payed. Other typical features of a final expense life insurance are that the amounts range from $1,000 to $50,000, the contract for the insured might be limited to 100 years old or more, it accumulate cash value, and the policy is not associated to any pre-arranged funeral plans. Furthermore, the insured person is also name a beneficiary of his/her final expense policy. There are legal requirements and considerations involved in the naming of a successor or trustee. When the insured person dies, the beneficiary is supposed to file a death benefit claim to the insurance company. The beneficiary needs to fill a form and provide an authentic death certificate for proof.
Pros and Cons of Final Expense Life Insurance
There are advantages and disadvantages associated with a final expense insurance policy. For example, the final expense policy ensures that there is preparedness in the part of the family. Funerals can be quite costly and this policy helps in the financial costs. This is very useful for the grieving family members. The final expense insurance policy is also quite affordable than other insurance policies. The premiums are reasonable and can be afforded by people of different social classes. There is also easy qualification for a final expense insurance policy. The requirements are not many nor are they strict. Hence, anyone can qualify for the insurance policy. The main disadvantage associated with the policy is that the face amount is quite low as compared to other insurance policies. The beneficiary can spend the insurance benefits in many different ways and not necessarily in the funeral costs. The pros outnumber the cons and this is why the final expense insurance policy is highly recommendable.