What is Final Expense Life Insurance?
Purpose: The primary purpose of final expense insurance is to provide funds to cover funeral expenses, as well as any outstanding debts or medical bills you may have accumulated towards the end of your life. It ensures that your loved ones do not have to dip into their savings or struggle to cover these costs during an already difficult time.
Different Approaches to Final Expense Planning
At Cole Insurance and Senior Solutions, we are here to assist you in planning and discussing various options to ensure you have adequate life insurance coverage to handle burial expenses, debts, medical bills, and taxes.
Before determining the appropriate life insurance coverage, there are many factors to take into account before determining the right life insurance amount to ensure that our plan effectively meets your family’s needs.
We can provide information on estate planning tools to help your estate avoid probate and minimize taxes for example. Additionally, prepaid burial plans are available to ensure that your future funeral expenses, even decades from now, won’t exceed your life insurance coverage due to inflation.
At Cole Insurance and Senior Solutions, we want to understand your life goals and what truly matters to you. Our mission is to empower you and ensure your peace of mind, going beyond offering life insurance.
Types of Final Expense Life Insurance
- Guaranteed life Insurance, also known as guaranteed-acceptance life insurance, is typically designed for individuals aged 50-85. These policies typically involve minimal health-related questions, primarily screening for terminal illnesses, and are available to individuals with significant health issues. The coverage typically ranges from $5,000 to $25,000, and it comes with a level premium and death benefit.
- Simplified life insurance policies are generally intended for individuals ages 45-85. These policies are suitable for those who may not meet the criteria for a fully underwritten life insurance policy but are considered to have moderate health risks. Applicants answer a detailed medical questionnaire but do not need medical exams to qualify. Coverage amounts can range from $5,000 to over $100,000 and it comes with a level premium and death benefit.
- Traditional whole life insurance can serve as “final expense life insurance.” With this type of policy, you’ll go through standard underwriting, which includes health assessments, questions about your medical history, and possibly a medical examination. Typically, you’ll pay significantly lower premiums compared to guaranteed life insurance and simplified issue life insurance. This option can certainly be worthwhile if you’re in reasonably good health.
- Guaranteed term life insurance or regular term insurance are policies we at Cole Insurance and Senior Solutions typically do not recommend to our older customers, and there are several reasons behind this recommendation.
Term life insurance is a life policy that provides coverage for a limited number of years. For example, a 10 or 20-year term life insurance plan offers protection for just that duration. Once the term expires, the coverage also ends.
Combining Term and Whole Life Insurance works best when you start these policies at a younger age. This is especially beneficial when you have both short-term financial obligations (e.g., a mortgage) and long-term insurance needs. This strategy provides financial security with term insurance during your working years, all the while building cash value and securing permanent coverage with whole life insurance.