Final expense insurance, also known as burial insurance, is gradually becoming one of the most popular insurance policies today, and for a good reason. It is one of the least expensive policies because of its lower premium fees and a great alternative to life insurance. This makes final expense insurance a great option.
Burial insurance like John Hancock final expense insurance is designed to cover expenses that need to be settled after your death. These bills may include funeral expenses and hospital bills. However, despite the advantages and benefits of this insurance policy, there are still individuals who are not aware of its purpose. Here is what you need to know about burial insurance.
What Exactly is Final Expense Insurance?
According to an article by Investopedia, final expense insurance functions the same way and has some similarities with traditional permanent life insurance. When you purchase a life expense insurance, it will remain in effect for the entirety of your life as long as you continue paying the premiums or depart because of untimely death.
Doug Thompson of Burial Insurance Pro states ” simply put, final expense insurance is a marketing term given to smaller amounts of whole life insurance. People who are only worried about having enough life insurance to cover funeral costs and final expenses will want to work with specific life insurance providers who offer these types of policies. Many popular life insurance providers such as Gerber Life, Lincoln Heritage, and Mutual of Omaha offer final expense policies to the senior community.”
Although final expense insurance is designed to pay for funeral-related expenses—such as memorial services, burial, cremation, caskets, and urns—it can also be used for other expenses. These may include hospital bills, unpaid mortgages, and unpaid credit card debts. Also, your beneficiaries can spend the proceeds as they see fit.
Do You Need Final Expense Insurance?
The answer to this question differs from individual to individual; every person has a unique financial standing. For instance, elderly individuals who don’t have enough money to pay for their unpaid debts and funeral services (after their death) should undoubtedly purchase final expense insurance. This avoids placing a financial burden on their families.
How Many Proceeds Will My Beneficiaries Get?
A burial life insurance like John Hancock final expense insurance has no exact benefit amount because it will depend on your planned face value, affecting the premium fees. One way to decide on a benefit amount—that you would want to have—is to plan whether you want a modest and simple funeral service or a large and grand burial service.
Typically, funeral services may cost around $5,000 to $10,000, making this range an ideal benefit amount that you should choose. However, you can always choose final expense insurance policies with more than $20,000 benefits if you plan to use the proceeds to pay for other expenses aside from funeral services.
How Much Will I Pay for Final Expense Insurance?
Your burial insurance’s exact cost will greatly depend on two things, your age and your preferred benefit amount (face value). Unfortunately, the higher your age, the larger the premiums that you would need to pay. This is because insurers take on more risks when they insure individuals that belong in the late adulthood stage.
Assuming that a face amount is $10,000, an individual at age 50 will pay a lesser premium fee than an individual who is 65. If you happen to be more than 60 years old, you don’t have to worry about premiums; this is because final expense insurance is one of the most affordable insurance policies in the market today.
What are the Types of Final Expense Insurance?
There are currently two main types of final expense insurance: simplified issue life insurance and guaranteed issue life insurance. The following is a comparison of the two:
Guaranteed Issue Life Insurance
The main difference between the guaranteed issue to a simplified issue is that the former typically asks health or medical questions to ensure that an individual does not have a terminal illness. The guaranteed issue also covers high-risk individuals. A guaranteed issue typically is more expensive and offers a lower maximum coverage amount because of its features.
Simplified Issue Life Insurance
Simplified issue life insurance is the policy of choice of individuals who may have not qualified for traditional life insurance policies that are fully underwritten. This is because physical and medical examinations are not required; individuals only need to answer a medical questionnaire.
Simplified issues are not required to be purchased in person, which means you can pick up the phone, talk to an agent or even buy one online. If you aim for an affordable life insurance policy, this type of insurance should be your priority.
Having a final expense life insurance ensures that you won’t leave a financial burden on your family after your death. This means you will be doing your loved ones a huge favor. It would be best that you take the time to consider final expense insurance to secure your family’s financial future after you depart from this life.