Final expense life insurance policies cover the cost of funeral expenses – and more

What is “final expense” insurance?  Basically – it’s a policy that only covers the costs of care in the final stages of life.  For many, that’s simply the funeral costs.  And funeral costs these days can be $10,000 or more!

Final expense, can be utilized for funeral expenses, hospital/medicare and care facility bills that may otherwise become the obligation of other relatives, estate liquidity, (gives executors money to pay taxes, insurance and other expenses on real estate and other property, while settling the estate of deceased) as well as other costs associated with the insured person’s passing.

Be Careful – Heavily-marketed final expense policies may have hidden costs

Final expense insurance is best and most properly addressed with a permanent life insurance policy.  While there are companies that issue small policies through the mail, you must be very careful and understand that many of these policies are age banded, and when the insured reaches the next age band, their premium will increase if they wish to maintain the same amount of coverage.

Some final-expense life insurance policies are “graded”

Some of these policies may be also be graded.   Grading means that there will be a period of time when the insurance isn’t in effect, and all the deceased’s beneficiaries will get back are the premiums paid and interest.

What’s also important to know is that since final expense is meant to be available for the entire life of the insured, it is very important to speak with an experienced, knowledgeable professional, even if a policy with a small death benefit is needed or desired.

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