Final expense insurance
Final expense is a whole life policy, there is no medical examination, and application takes less than 10 minutes. Know if it’s the right one for you!
8 life insurance final expense life insurance for seniors policy features
- Amount of Coverage from $2,500 up to $50,000
The burial and final expense coverage are meant to give families a helping hand facing a family member’s death. It offers money to the beneficiary to ease the burden of paying for funeral costs and other expenses concerning the end of life. - Without Medical Examination
It is similar to a guaranteed issue that is without medical examination to qualify for life insurance. - Easy Approval Process
The application form is easier to fill out, like one to three pages. All your answers to the application will determine the type of policy you are qualified for. - 50 Years and Above
It is a type of policy for a specific target market, those above 50 years old. Final expense provides a straightforward procedure without a medical exam. - Guaranteed Acceptance
In case you have pre-existing conditions and do not qualify for the graded policy, you can consider getting modified guarantee issue insurance without health questions. However, there is a two-year waiting time with the revised guarantee before releasing the death benefits. During the waiting time, half of the death benefit is released. The money that the beneficiary will receive comes from the return of premium plus 10%. - Cash Value
Like the whole life, the final expense may also grow cash value over time. It is a fund that one can withdraw in case the need arises. - Guaranteed Premium
Another good thing about the final expense is that premiums do not change throughout the policy. However, there is an exemption. If it is a group life policy, the premium stays the same, but coverage will decrease after reaching a certain age. - Beneficiaries Have Freedom To Spend Benefits
The final expense policyholder will name all the beneficiaries who will receive the death benefit after passing. These beneficiaries can spend the money for whatever purposes. In comparison with funeral insurance policy, the beneficiary may only pay it for funeral expenses.
Getting the best final expense life insurance rates
1. Health Questions on application
Every insurer may have a different set of health questions for you to answer upon application. Mostly, insurers ask simple questions, and they do not give a lot of attention to health. The tricky part is finding the lowest premium without sacrificing the quality of the coverage.
For instance, a person with cancer and was treated two years ago may qualify for level policy from Royal Neighbors with full coverage. However, suppose the same person will try to apply to Mutual of Omaha. In that case, he or she may only qualify for a graded policy that has a two-year waiting time right before getting the full benefits of the coverage.
At Coach B, we are trying to talk to our clients and suggest the best policy that suits their health status and financial standing. Some do not want to answer hard health questions because they think that they will not qualify. However, with our licensed insurance agent’s help, we can help you answer tricky questions and get better policies with better pricing.
The following are a sample of questions that insurers might ask you. If you answer “no” to most of these questions, it means that you can qualify for a better policy and rates.
- Are you currently in hospital care or receiving hospice care?
- Are you using oxygen support for a respiratory illness?
- Are you diagnosed with an aneurysm and does not undergone surgery?
- Are you diagnosed with any condition that requires a bone marrow, organ, or stem cell transplant?
- Are you diagnosed with a kidney illness that needs dialysis?
- Do you have any mental disorders like dementia or Alzheimer’s?
- Are you suffering from Lou Gehrig’s disease?
- Are you suffering from a terminal condition and only have 12 months to live?
People who want better policy and coverage should answer all of these questions in total honesty. Insurers will know the truth by getting various public reports from:
- Pharmacy report- It gives them the record of individuals regarding their medications for the past ten years.
- MIB report- It is a record of the past life insurance applications of the client.
- DMV report- It is a record of your driving history.
- In case any of this information does not match your answers, then the insurer has the right to decline your application. An insurer may choose to push thru with the application by asking for additional information and documentation from you.
2. Financial Ratings
As you look for the best insurance provider, it is good to narrow down your choices by choosing those with A ratings. It will ensure that the insurer will meet the demand of all its ongoing insurance obligations. Also, insurers with A ratings have lower vulnerability when it comes to economic changes.
The AM Best financial ratings explained
3. Costs of Premium
The right final expense insurance companies may give you 20 to 30 percent savings in premium for similar benefits. For example, Colonial Penn’s burial coverage without questions is more than 20% higher than without health questions policy being offered by AIG or the American Insurance Group.
These two companies received an A rating. The AIG provides $25,000 coverage that is double the amount from Colonial Penn. Also, both policies are modified with a two-year waiting time to get the full benefits. Additionally, both can offer their clients accelerated death benefits rider and builds cash value over time.
The most significant dissimilarity between the insurer Colonial Penn and AIG is the cost of the policy.
4. Types of Policies
It is essential to consider that final expense life insurance has six different policy types. Every type has a different structure and cost. The rule is the healthier the client is, the more benefits they will get from the policy, and the cheaper it gets.
Do not be confused because we will discuss each type in detail to help you choose the right one for you.
1. Level Benefit (Whole Life Policy)
The whole life level policy is the simplest among the six types of the final expense policy. Applicants who are in good health condition may apply to a level policy. Those with some health issues but have been well controlled for more than three years are qualified for the procedure. On the day of its approval, the policy is already in effect. Therefore, when the policyholder dies, all beneficiaries will get the full death benefit immediately.
Specifications:
- Full Coverage on Day 1
It is not like the graded and modified benefit policy, as the death benefit is given 100% immediately right after the policyholder’s death.
- Most Affordable Option
Among the six types, it is the best option for those searching for affordable yet offering comprehensive benefits.
- High Coverage Amount
Depending on the insurer, one can purchase a level benefit whole life final expense policy from $2,500 up to $100,000.
Qualifications for Level Whole Life Policy
- One can qualify for level benefit if he/she has not been diagnosed or receiving treatment for severe cases for the past three years, including cancer, diabetes after age 40, heart illness, stroke, COPD, cerebral palsy, Crohn’s disease, and MS.
- A person without a history of amputation, paralysis, heart failure, Parkinson’s disease, dialysis, HIV, AIDS, and Alzheimer’s or currently hospitalized.
- Applicants with controlled and maintain medical conditions are encouraged to apply.
Best final expense life insurance companies for level benefit policies
Eagle Premier Level
Living Promise Level
Express Issue Deluxe
Remembrance Life
Level Benefit Plan
2. Graded Benefit
A person may apply for a graded benefit if they do not have any severe illness for the past two years. However, this timeframe still depends on the insurance provider.
For instance, it may be the best plan for people who have Parkinson’s disease and other manageable illnesses. However, if death occurs because of health reasons within two years, the insurer will only part from a portion of the total death benefit. In case of death after two years, then the full death benefit is given to the beneficiaries.
Specifications:
- Graded Death Benefit
A certain percentage is given with graded death benefit if the insured died within the policy’s first two years. For the first year, some insurers may only give 30% of the death benefit, and in the second year, it may increase to 70%. However, this percentage varies according to the insurance provider. During the third year, the insurer will start to pay for a 100% death benefit.
- Accidental Rider
Some choose to acquire the accidental rider as part of the final expense policy to get a 100% death benefit in unintentional death. The death benefit will be available for the beneficiaries immediately right after the end of the policyholder.
- Return of Premium Plus 10% for Suicide
In case the policyholder’s cause of death is a suicide, then beneficiaries will receive all premiums paid with an additional 10% from the total compensation paid.
Qualifications for Graded Whole Life Policy
- One can qualify for graded benefit if he/she has not been diagnosed or receiving treatment for severe cases for the past three years, including cancer, diabetes after age 40, heart illness, stroke, COPD, cerebral palsy, Crohn’s disease, and MS.
- A person without a history of dialysis, ALS, HIV, AIDS, and Alzheimer’s or currently hospitalized.
- Applicants with controlled and maintain medical conditions are encouraged to apply.
3. Modified Benefit
This policy is likely the same as graded. However, the difference is that it includes a more serious illness like cancer than just manageable diseases. The only problem is that it has a two-year waiting period to release the full death benefit.
In case of non-accidental death right before the two-year waiting period, the policy may only give the return of premium paid and a percentage from the total death benefit. On the first day of the third year, the carrier will pay the full death benefit given to the beneficiaries.
Specifications:
- Death Benefit
There is a certain percentage given if the insured died within the first two years of the policy with modified benefit. Insurers may give back all paid premiums plus 10% from the total death benefit. However, this percentage may differ according to the insurance provider. During the third year, the insurer will start to pay for a 100% death benefit.
- Accidental Rider
The 100% death benefit will be available for the beneficiaries immediately if the cause of the insured’s demise is an accident.
- Return of Premium Plus 10% for Suicide
In case the policyholder’s cause of death is a suicide, then beneficiaries will receive all premiums paid with an additional 10% from the total compensation paid.
Qualifications for Modified Whole Life Policy
- One can qualify for level benefit if he/she has not been diagnosed or receiving treatment for severe cases for the past three years, including cancer, diabetes after age 40, heart illness, stroke, COPD, cerebral palsy, Crohn’s disease, and MS.
- A person without a history of dialysis, ALS, HIV, AIDS, and Alzheimer’s or currently hospitalized.
- Applicants with controlled and maintain medical conditions are encouraged to apply.
Best companies for graded and modified benefit policies
Living Promise Graded Benefit
Modified Benefit Plan
4. Guaranteed Acceptance
This policy, just like its name implies, is guaranteed. Therefore, one does not need to answer questions about health or medical history. However, like others, there is a two-year waiting period right before the beneficiary gets the full death benefit.
Moreover, during the first and second year, the beneficiary may only get all paid premiums plus 10% of the total death benefit. It serves as the insurer’s protection if the insured already has a terminal illness. If accidental death occurs, a total death benefit will be paid after 1 to 2 years. Beneficiaries will receive all death benefits in the third year.
Specifications:
- Death Benefit
A specific percentage that beneficiaries will get if the insured died within the first two years of the policy. Insurers may give back all paid premiums plus 10% from the total death benefit. However, this percentage may differ according to the insurance provider. During the third year, the insurer will start to pay for a 100% death benefit.
- Accidental Rider
The 100% death benefit will be available for the beneficiaries immediately if the cause of the insured’s demise is an accident.
- Return of Premium Plus 10% for Suicide
In case the policyholder’s cause of death is Suicide, then beneficiaries will receive all premiums.
- The amount of coverage may range from $1,000 up to $40,000
Qualifications for Guaranteed Acceptance Whole Life Policy
- The best thing about this type is the fact that there is no qualification because it guarantees acceptance.
Best companies for guaranteed acceptance policies
5. Funeral Insurance
There is a final expense funeral policy that one can purchase directly from a funeral home. However, the funeral home is the beneficiary. The primary purpose of this policy is to pay for the entire funeral expenses in advance. The whole policy covers the funeral services, memorial service, and burial costs.
The downside of getting a final expense funeral policy is that it is somewhat like a layaway plan. Hence, it is offered as a single-pay, 1, 5, or 10 years payment scheme. Therefore, once you purchase this policy, it is locked in, and changes are not possible.
The advantage of getting a final expense funeral policy is that once it is purchased, there is nothing to worry about your family if something terrible happens to you. Also, prices are set and will never change.
Specifications:
- Death Benefit
If the insured dies at the first two years of the policy, beneficiaries will receive paid premiums and 6%. On the third year of the policy, beneficiaries will get the full death benefit on day 1.
- Accidental Death
In case of accidental death, then the funeral home will receive 100% of the death benefit on day 1.
- Return of Premium Plus 6% for Suicide
In case the policyholder cause of death is a suicide, then beneficiaries will receive all premiums
- The coverage amount is $1,000 up to $20,000, and the funeral home will be the beneficiary.
Qualifications for Funeral Insurance Policy
This type of policy has no qualifications because it is guaranteed, and health is not an issue.
6. Group Life Policy
It is a type of final expense policy that one can get from their employer or associations where they belong. Each group provides its own set of qualifications. Also, each group policy has various products from an final expense insurance provider. The master policyholder is the group, company, or association. Therefore, you will not get an individual policy but a certificate as proof of your membership.
Moreover, the service for the policy is not provided by the insurer. Instead, there is a plan administrator directly from the company or association. Also, a group policy is available for all regardless of age and health status. There may be few health questions, but it will not matter.
The coverage amount for this type of final expense policy may start from $10,000. It may increase depending on the type of policy and coverage that the company or association acquires. Both term and whole life policies are available for group life policy, depending on the group or company’s choice.
There is another option aside from the six types mentioned above. One can get it from various final expense insurance providers, but not all offer it. It is burial insurance, a kind of life policy that one can use to pay for the funeral service and other expenses after death. Unlike funeral insurance, burial insurance is not only for funeral purposes.
Advantages of Getting a Burial Insurance
- It is effortless to acquire through phone calls or online applications.
- The policy does not need a medical examination to qualify.
- Most of the burial policies available in the market are guaranteed.
- It offers coverage age of up to 100 years old.
- One can purchase it at a very minimal amount starting from $5,000 up to $10,000.
- It is a cash policy that means it also earns cash value over time.
Moreover, the insurer may ask you a few questions about your age, severe health conditions, and smoking history. Also, some may have a two-year waiting period or less, depending on the insurer.
Another good thing about it is the fact that its premiums do not change and coverage is permanent. Some of the expenses that it may cover are casket, cemetery plot, funeral service, funeral procession, and other fees associated with death.
Final Expense Insurance Company Comparison Chart
How much does final expense insurance cost
Final Expense Insurance Reviews
FAQ’s
