Final Expense Insurance ? Final Expense Insurance Details
Final expense insurance is a low value life insurance policy that is specifically designed to pay for funeral expenses and other limited end of life expenses. They are basically life insurance policies that have been modified for more narrow purposes. They generally cover very basic costs and are issued for no more than about ,000. They function in much the same way as life insurance policies. They are either term or whole life and require a beneficiary. There are usually age limits on when applicants can ask for final expense policies. Sometimes a health examination will be required as well.
Life insurance and final expense insurance basically fit into two areas, term and whole life. Term insurance has an expiration date and whole life does not. Term insurance can be purchased to last for a given amount of years of until the policy holder reaches a certain age. Whole life insurance is purchased for the policy holder’s lifetime and will pay out a benefit at some point. Simplified issue policies require some medical examination or will ask medical question on their applications. Insurance companies want to know their risk before agreeing to insure the applicant. Other policies are guaranteed issue. These do not require any medical questioning or examination before agreeing to provide insurance.
The benefit of one type of final expense insurance over the other is that if the applicant is older but in good health, a simplified issue policy might be more easily obtained than one that is guaranteed issue and would reject the applicant simply because of age. Some simplified issue insurance companies will consider applications from clients as old as 75 years of age. Applicants with poor health may benefit from seeking a guaranteed issue policy. Poor health can drive up premiums on final expense insurance. Or those with poor health may be rejected altogether.
Some final expense insurance is based on a graded death benefit. This means that those with poor health can get a better death benefit each year they survive. This is an option offered to those who have poor health or are at an advanced age. Any life insurance policy may function on the above ideas, but final expenses are a special type of insurance that is specifically designed to take care of funeral expenses. Broader life insurance policies can address issues of benefits for dependents and other considerations.
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