How to Help Loved Ones Pay for Final Expenses without Breaking the Bank

Most people don't want to burden their family with the cost of a funeral and other end-of-life expenses after they pass.

Loved ones will already be dealing with the grief of losing a parent and adding the stress of paying their final expenses can be overwhelming.

The average cost of a funeral in the U.S. ranges from $6,971 to $7,848, according to the National Funeral Directors Association. Those costs, however, do not include the cost of the burial itself or a headstone, which can add thousands of dollars to the tab.

These are often unavoidable costs, so many people choose to purchase a life insurance policy that will cover those final expenses.

While some opt for more robust policies with large death benefits, a certain type of life insurance — final expense insurance — can be ideal for someone who only needs a small death benefit to cover their final expenses when they pass.

Final expense insurance is a permanent whole life insurance policy designed to cover the cost of your funeral and other end-of-life expenses, such as medical bills, legal fees, housing costs and any other remaining bills.

Term life insurance policies are not true final expense policies because they terminate at a certain point in time— i.e, either at a specific age or after a specific number of years.

On the other hand, a final expense permanent whole life policy will be available until the insured dies or at policy maturity, provided the premiums are paid in full. These policies are ideal for seniors whose children are all grown up and have established careers, and who don't need life insurance anymore.

Typical characteristics of final expense policies include:

• Face amounts of between $5,000 to $35,000 with reasonable monthly or annual premiums.
• Premiums are fixed for the life of the policy.
• Most policies do not require a medical exam and some have guaranteed acceptance.
• It may be possible to purchase coverage until age 80.
• Depending on the insurance company and policy type, the policy may earn dividends and accumulate some cash value.
• Not linked to a prearranged funeral contract.

 Final expense life insurance can be used to cover nearly anything related to a burial or funeral costs, including:

• Funeral services
• Burial or cremation services
• Post-funeral gatherings
• Flowers, music, obituary, etc.
• Medical bills
• Nursing home or other residential care.
• Gift / legact for the family
• Eliminate Debts 

Considerations

Costs for final expense insurance are reasonable but, depending on when you secure coverage, the premiums will vary. The older you are and the worse your health is, the higher your premium will be.

The average policy costs $56 a month for $10,000 in coverage, but for people aged 65 and older, but the cost can be higher or lower. Also, the premium will increase if you want more coverage.

But if you purchase a policy in your 30s, for example, the premium could be as low as $15 a month.

While most policies don't require you to pass a medical exam to qualify, if you are in good health and would pass an examination, and you are young, you could do better by shopping around for a term life insurance policy and comparing the cost to final expense coverage

Some policies include a waiting period, meaning the coverage won't be in force until the premium is paid for a certain period of time, such as six months to two years. However, these "graded" policies normally would return (pay the beneficiary) all the premiums paid to date plus good interest tax-free. (Better than trying to save it in a bank)

Final expense life insurance isn't right for everyone, but coverage does offer peace of mind for seniors who don't want their death to place a financial burden on their loved ones after they pass.

Give us a call and we can discuss your life circumstances, your needs and help you decide if a final expense insurance policy is right for you.