Life Insurance

5 Times Final Expense Insurance is Right for You

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Note: Ethos does not offer final expense-specific life insurance, although our term life plans or whole life plans for seniors ages 66-85 can be used for these costs. This information is shared to help our customers make an informed decision about their life insurance needs.

Final expense insurance is designed to cover burial costs and expenses associated with your funeral. It's also referred to as a burial insurance policy or funeral insurance.  A final expense life insurance plan is a whole life policy, meaning that if you continue to pay the premiums, your policy will never expire. 

Funeral insurance plans are generally affordable, and coverage is easy to get. Most policies provide a death benefit in the $5,000 to $20,000 range. Since the average cost of a funeral is between $7,000 and $10,000, the payout on funeral expense insurance is often sufficient to cover all of your burial costs. 

Here are five reasons why a funeral insurance policy may make sense for you.

1. Coverage is easy to get.

Most burial life insurance plans offer guaranteed acceptance with no medical examination. When you apply for coverage, you may have to answer some questions about your health, but it's unlikely that a life insurance examination will be required. 

In most cases, you'll be approved within a few minutes, and full coverage will begin immediately, even when buying burial insurance for seniors. Some policies do have a waiting period of up to two years before the total value of the death benefit will be paid. 

If you pass away during this period, your beneficiaries will receive a refund of all premiums paid instead of the final expense policy's face value. It's essential to closely review your burial life insurance policy terms to understand how payouts occur.

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2. Burial expense insurance is affordable.

Since coverage usually costs less than $20,000, monthly rates for final expense burial insurance can be less than $30. Actual rates are based on the applicant's age, so final expense insurance for seniors will cost more than coverage for a 50-year-old person. Most policies have level premiums, which means what you pay each month will never change.

3. Final expense life insurance for seniors never expires.

Final expense and burial insurance is permanent insurance. Unlike term life insurance, which expires at the end of a specific length of time, permanent insurance will remain in place for the remainder of your life. Coverage will never be interrupted, and your policy won't lapse unless you stop paying the premiums. 

4. Final expense insurance builds cash value.

One of the benefits of final expense insurance is that it builds cash value over time. You can borrow some or all of the accumulated cash with no credit checks or lengthy applications. Like a bank loan, the insurance company charges interest, but there are no structured repayment requirements. 

Loans can be repaid on your schedule, or you can choose to have the outstanding balance deducted from the payout made to your beneficiaries. It's usually a good idea to make interest payments since the interest compounds and can accumulate to reach the policy's total value.

5. Burial insurance is flexible. 

While other types of life insurance are designed to replace income and protect your family's financial stability, the intent of final expense and burial insurance is to cover the costs of your final arrangements. The payout, however, is unrestricted and can be used for other expenses like medical bills, credit card debt, or to pay off a mortgage. 

Some policies allow you to pre-pay funeral expenses, so the money will be sent directly to the funeral home you choose instead of your beneficiaries receiving the death benefit. This allows you to control how the money is used. There are risks, so be sure to closely review the terms if you consider a pre-paid policy like this.

Is burial insurance worth it?

The answer is very personal.  If you have significant savings, investments, or other insurance, your family may not need the payout from a final expense policy for your funeral. If you're concerned that burial expenses will be a burden, however, funeral insurance coverage may be worth considering. 

If you've been turned down for term or permanent life insurance, burial insurance offers an easy way to get some affordable coverage in place, usually with no medical examination. 

Ethos offers whole life plans with guaranteed coverage for seniors ages 66-85, which can serve the same purpose and may be more affordable. It's easy to calculate how much coverage you need and get a free quote to learn what the peace of mind of online life insurance coverage will cost.

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Please note that all prices quoted are subject to change, including due to underwriting.