What Are The Final Expense Advantages And Disadvantages?

What Are The Final Expense Advantages And Disadvantages?

Final expense insurance is amongst the few options for pre-planning and paying off compensations for a memorial or funeral. Even though there’s so much information available on the web regarding final expense insurance, it might still seem a bit confusing and overwhelming. If you are wondering if it is a good choice for you, I breakdown the fundamentals of this insurance plan, as well as outline the final expense advantages and disadvantages so you might be able to decide if it is ideal for you.

What Is Final Expense Insurance?

Before we get to the final expense advantages and disadvantages, let’s discuss first what really the final expense insurance, especially for those who don’t know yet is.

Final expense insurance is actually a kind of low face value life insurance that is designed in covering the expenses of the ‘final expenses’ of a certain individual. This includes funeral products and services, legacy planning necessities, loans, and some other unsettled bills.

There are two major kinds of coverage any individual can be eligible for based on a brief health interview.

• -Level Benefit. This is a kind of coverage, which will pay the whole life insurance benefit effective upon the approval.
• -Graded Benefit. It means that there were some issues regarding the short health interview on some pre-existing conditions. It usually offers a 2-year waiting period before the whole death benefit can be paid to the beneficiary. Remember, different companies may have various payout schedules, hence it is important to understand fully before purchasing any plans.

Both plans offer up to $25,000 final expense coverage. However, some companies or institutions have age restrictions, which may reduce the overall amount you may apply for. That’s why it’s important to have a thorough discussion with someone who is knowledgeable and professional in this field –just like me.

Final Expense Advantages and Disadvantages

Just like any insurance policies available, final expense insurance also has its own sets of advantages and disadvantages.

Advantages Of Final Expense

• -Final expense is commonly less expensive than the pre-paid funeral plan. It can easily cost between $100 and $300 a month or more.
• -You may use the insurance policy or money anywhere you are –it isn’t fixed to a certain cremation or funeral provider or packages of products and services. This is specifically beneficial if you have moved into a new place, for instance. This kind of insurance flexibility is amongst the strong points of using a final expense to finance your funeral since you have the full control and ownership of your own policy.
• -Most people may qualify for coverage and when the policy is under $25,000, there are no medical examinations necessary for approval, regardless of your health condition.
• -You and your trustee own the final expense insurance policies. This just means that the funeral home isn’t the beneficiary. This is necessary in case a funeral may have less cost than what’s in the original plan. In this case, the remaining benefit will remain with the family to utilize at their own discretion.
• -Final expense premiums are sure to never increase because of the changes in health status. And benefits will surely never drop as long as the premiums are being paid.

Disadvantages Of Final Expense

• -There might be a lag when you receive the money and when you file for the claim. If the cremation or funeral provider requires straight payment, you’ll need to cover the expenses until the insurance policy disburses.
• -If you choose to stop paying the premiums, there’s a possibility that it will not grow overtime. This mean it will lose value every year due to the decreasing purchasing power and that the money you put in may not be reimbursed.
• – Unlike prepaid funeral contracts, the funeral costs aren’t locked in or fixed and may vary as the time goes on.
• With final expense plans, you will need to pay monthly premiums for the rest of your life. This can cost more than what the insurance policy is worth. This is true if you are going to live a long life.

Final Say

Planning for death is something that most people don’t want to talk about and frequently put-off until it’s too late. It’s either because of discomfort in discussing death with family or they think the costs that come with it are way too big. Final expense insurance is one of the many ways to pay for a funeral.

In deciding whether or not you should purchase final expense insurance, you will need professional help. With over 30 years of experience in the insurance industry, I am certain, I can help you decide on what is the best final expense plan for you. Visit One Source Benefits or call me at 1-877-549-1212, and let’s talk about all your comments and questions about final expense insurance!