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Final Expense
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2024 Complete Guide to Burial Insurance and Final Expense:
Our comprehensive guide to burial insurance and final expense starts by explaining burial insurance.
Burial insurance is a type of whole life insurance policy designed to cover expenses related to one’s passing, such as burial, funeral services, and other final expenses. This form of permanent life insurance does not expire.
Available for individuals aged 50 to 85, this policy accumulates cash value that can be borrowed against or surrendered for its cash value. The face amount, or death benefit, typically ranges from $1,000 to $25,000, with some insurers offering up to $50,000 of coverage.
Is burial insurance worth it? Let’s explore its key characteristics:
- Permanent Coverage: Coverage lasts your entire life. The insurer cannot cancel your policy due to age or health changes.
- Level Premiums: Premiums remain consistent throughout the policy. Your rates are locked in and guaranteed not to increase.
- Fixed Death Benefit: The death benefit does not decrease.
- Beneficiary: Your chosen beneficiary receives the death benefit. This can be a spouse, partner, child, family member, or another person responsible for your end-of-life plans.
- No Medical Exam: Simplified underwriting means no medical exam is required, just health questions. Guaranteed issue policies ask no health questions.
- Lower Coverage Amount: Coverage is typically capped at $25,000 to $50,000, as it is designed specifically for final expenses.
- Cash Value Accumulation: The policy builds cash value on a tax-free basis with each premium payment. This can be borrowed for emergencies or to pay premiums.
When applying for burial insurance, you have two basic options: Simplified Issue or Guaranteed Issue policies.
Simplified Issue Burial Insurance
- No medical exam required, just a few health questions.
- Immediate coverage with no waiting period.
- More affordable than guaranteed issue life insurance.
- Possible questions include smoking status, residence in a nursing home, and diagnosis of severe illnesses like cancer or HIV.
- Denial possible based on health or lifestyle.
Guaranteed Issue Burial Insurance
- No medical exam or health questions.
- Guaranteed approval regardless of medical history.
- Mandatory 2-3 year waiting period before the full death benefit for natural causes is paid.
- Full death benefit paid for accidental deaths during the waiting period.
- Higher premiums due to increased risk for the insurer.
Burial insurance provides an affordable way for your family to plan and pay for your funeral. Consider purchasing burial insurance if:
- You lack permanent life insurance.
- You haven’t pre-planned your funeral.
- You don’t expect to have funds to cover final expenses.
- You lack sufficient savings.
- Your family cannot afford your burial costs.
- You have debts.
- You wish to prevent your loved ones from bearing your final expenses.
Elderly individuals, especially those without traditional life insurance, can benefit from burial insurance. It’s available for people aged 50 to 85 without requiring a medical exam.
The cash death benefit from burial insurance can be used to cover:
- Funeral services
- Embalming
- Cremation
- Casket or urn
- Burial plot
- Headstone or grave marker
- Hearse
- Flowers
Additional expenses may include:
- Church or venue charges
- Travel expenses for family members
- Refreshments for funeral guests
- Probate lawyer fees
Eligibility and rates are determined by:
- Answers to health questions
- Prescription history
- Medical Information Bureau records
Rates are influenced by:
- Age
- Gender
- Tobacco use
- Health
- Lifestyle
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Premiums vary based on gender, age, tobacco use, policy type, and face amount. For example, a $20,000 policy for a 50-year-old male nonsmoker might cost $42.15 per month. Premiums increase with age and are higher for smokers.
No medical exam is required. You’ll need to provide information such as age, gender, height, weight, tobacco and alcohol usage, and lifestyle. Approval is usually quick.
Typically, the insured pays the premiums, but an adult child can purchase a policy for their parents.
Prepaid funeral plans are linked to a specific funeral home and pay for services in advance. Burial insurance provides a cash benefit to beneficiaries who can use it for final expenses and any other needs.
When shopping for a policy, consider:
- No medical exam
- Level premiums
- Fixed death benefit
- Top-rated insurance company
- Whole life policy with cash value
Compare benefits and premiums to find the best policy.
- What is burial insurance? A type of life insurance for covering final expenses.
- Who needs burial insurance? Those wanting to ensure final expenses are covered.
- Cost of burial insurance? Varies based on several factors, typically affordable.
- How to purchase burial insurance? Through a qualified insurance agent or broker.
For more detailed information and personalized quotes, consider consulting an independent final expense insurance specialist.
Understanding Pre-Existing Conditions
Understanding Pre-Existing Conditions
Have you heard that private insurance companies always deny coverage to applicants with pre-existing conditions? Perhaps you’ve faced such denial for health or life insurance. The good news is that some insurance companies do offer coverage to individuals with pre-existing conditions; you just need to know where to look.
Burial insurance is one option that generally accepts most applicants, regardless of their health conditions. Let’s explore how it works.
What Are Pre-Existing Conditions?
Pre-existing conditions are health problems that exist before you apply for coverage. These issues are often considered higher risk by insurance companies, leading to potential denial of coverage or higher premiums. Pre-existing conditions can be treatable, terminal, congenital, or newly diagnosed. Depending on the type of plan and the insurance carrier, your medical history can affect your eligibility and premiums. Conditions like AIDS, ALS, Alzheimer’s, asthma, cancer, epilepsy, heart conditions, high blood pressure, sleep apnea, stroke, and seizures are typically seen as pre-existing conditions by insurers.
What Is a Final Expense Insurance Plan?
If you have a pre-existing condition, consider a funeral or burial insurance plan, as these policies have relaxed underwriting. Coverage amounts range from $2,000 to $50,000, even with pre-existing conditions. These policies cover final expenses like funeral services, cremation, or burial and feature fixed monthly premiums that do not increase. Beneficiaries receive tax-free cash death benefits to use as needed.
There are two main types of burial insurance plans:
There are two main types of burial insurance plans:
Simplified Issue Policies
- Simplified issue policies require answering a few health questions but no medical exams.
- They offer immediate or modified coverage. Immediate coverage starts from day one, while modified coverage imposes a 2-3 year waiting period before the full death benefit is available.
- These policies are more affordable than guaranteed issue policies but may deny coverage based on health or lifestyle.
Guaranteed Issue Policies
- Guaranteed issue policies do not require health questions or medical exams.
- They are available to anyone within the eligible age range, regardless of health conditions.
- These policies usually have higher premiums and a waiting period of 2-3 years before the full death benefit is available.
How Medical Underwriting Works for Pre-Existing Conditions
Insurance companies covering pre-existing conditions have varying underwriting requirements. Some may ask health questions and review your prescription history. Common questions include inquiries about serious health conditions, use of supplemental oxygen, and history of heart disease or HIV. Honest disclosure is crucial, as insurers will verify information through your prescription history.
If a burial insurance company doesn’t ask about a specific pre-existing condition, they are likely to accept it and approve you for first-day coverage.
Benefits of Final Expense Insurance for Pre-Existing Conditions
- No Invasive Telephone Interview: Typically, no extensive medical questions.
- No Medical Exam: Eliminates the need for medical tests, beneficial for those with pre-existing conditions.
- Easy Application Process: Simplified and accessible.
- Level Premiums: Consistent premiums throughout the policy’s life.
- Fixed Death Benefit: The death benefit remains unchanged.
- Permanent Protection: Lifelong coverage as long as premiums are paid.
- Cash Value Growth: Policies build tax-deferred cash value.
- Tax-Free Death Benefit: Beneficiaries receive the payout without income tax implications.
Final Thoughts
If you’ve been denied life insurance due to a pre-existing condition, don’t lose hope. Different insurers have varying approval criteria, so initial denial doesn’t mean you’re uninsurable. Final Expense Direct specializes in finding suitable final expense life insurance policies for individuals with pre-existing conditions, working with top-rated insurance companies to connect you with the right coverage. Contact Final Expense Direct for assistance and secure peace of mind for you and your loved ones.