What Makes the Best Final Expense Insurance Plan
Find the right final expense insurance for your needs
As you get older, the ways in which you take care of our loved ones will change. You’ll look for solutions to eliminate placing a financial burden on them in your final days and beyond. You’ll need something easy to obtain, yet permanent, that offers flexibility for your family. That’s when you’ll realize Final Expense insurance is a viable choice. The following information guide can help you find the best Final Expense insurance coverage to fit your circumstances.
What is Final Expense insurance?
Final Expense insurance is a form of permanent insurance that covers a wide range of expenses you leave behind. They can include your funeral, legal fees, medical bills, and more. Because it is permanent, the policy stays in place as long as you pay the premiums, eliminating the need to shop for insurance options again. You name one or more beneficiaries, and those people receive the death benefit after your passing. They can then use the money as you’ve advised or as they see fit.
Final expense insurance plans have slightly higher premiums and lower death benefits than term life insurance policies, which expire after a specified amount of time. But Final Expense plans are easier to qualify for and offer coverage without a medical exam. Policies generally range from $1,000 to $25,000 and carry cash value that builds over the life of the policy, similar to an investment. The amount is paid as part of the death benefit or can be cashed out for part of its value after a specified time period.
The differences among Final Expense insurance plans
To discover which plan is the best Final Expense insurance for you, it’s important to understand the differences between policies.
Types of death benefits
Most Final Expense insurance plans have two types of death benefits: level benefit and modified benefit. A level benefit keeps the death benefit the same — at its full amount — no matter when the insured person dies, whether it’s during the first or the last years of when the policy is active. The level benefit is usually less expensive than a benefit that increases over time, but it doesn’t account for inflation.
A modified benefit has a waiting period of two or more years before the full death benefit is available. If the insured passes during the restriction period, premiums paid will be returned, plus a percentage listed in the policy agreement.
Types of plans
Simplified issue final expense insurance
- Simplified underwriting; approval depends on your answers to a few questions related to your health
- Death benefits are a level benefit
Guaranteed issue final expense insurance
- No underwriting; approval is guaranteed
- Death benefits have a modified benefit
- Premiums are higher than a simplified issue plan
If you have no big health concerns, a simplified issue plan may meet your needs. However, if you have chronic or serious health conditions, a guaranteed issue plan could be the best Final Expense insurance for you.
The features of the best Final Expense insurance
If you’re on a tight budget and are simply looking to cover funeral costs and a few extra bills, Final Expense insurance could be enough to meet your needs. You’ll want to accurately estimate funeral costs though.
According to the National Funeral Directors Association, you should budget around $8,800 for traditional funeral services. If you’re currently under medical care, you may want to add extra coverage for pending bills.
When evaluating insurance providers and their policies, remember some offer more benefits and riders than others. For example, Great Western Insurance Company (GWIC) offers two Final Expense Whole Life insurance products: Guaranteed Assurance and Assurance Plus.
Guaranteed Assurance requires no underwriting or answering of health questions to purchase. Assurance Plus is designed for those in good health and gives the policyholder a 25% increase of the full death benefit upon answering three medical questions. Assurance Plus also includes an Accelerated Death Benefit rider at no additional charge. It gives you access to some of your policy benefit to cover medical expenses or supplement income if you are diagnosed with a chronic or terminal illness. Specific details can be found on the Final Expense insurance page.
This article may contain links to third party websites, but Great Western Insurance Company is neither responsible nor liable for their content, accuracy, or security. Review our Terms and Conditions to learn more.
Photo credit: iStock
* The Guaranteed Assurance plan is not available in the state of Washington.
** The Accelerated Death Benefit rider is not available in the state of California.
Your benefits and premium will vary depending on the plan selected. Plan availability may vary by state. This is a solicitation of insurance and an agent may contact you.
Policy forms: FE-FB-0515, FE-FB-0515 FL, FE-FB-0515 ND, FE-FB-0916 CA, ICC15-FE-FB-0215, FE-GB-0515, FE-GB-0515 FL, FE-GB-0515 ND, FE-GB-0916 CA, and ICC15-FE-GB-0215