Is Final Expense Insurance, Really Final?
How to Use Your Burial Insurance Benefits
Final Expense Insurance or Funeral Insurance is typically purchased by the policyholder to make certain that final expenses are paid for in the event of their death. Although these policies are referred to as Final Expense Insurance or Burial insurance, the life insurance policy used to fund the plan is a simple Whole Life Insurance policy.
Whole Life is the preferred policy type because it is available with smaller death benefits, it is guaranteed for the life of the policyholder, the premium never changes, and the underwriting involved with the purchase is less intensive. In fact, some insurers offer policies that are considered “guaranteed issue” and there is little to no medical information required.
These policies are typically purchased by people who are between age 50 and age 80 who either have no life insurance or want to have a policy designated specifically for the final expenses (funeral and burial) when they pass away. Purchasing a Final Expense Insurance policy is considered to be an act of love because the policyholder is making arrangements in advance of their death and not leaving funeral arrangements and expenses to their surviving loved ones.
Your Last Wishes
Most insurance companies that offer final expense or burial insurance will also provide a booklet for the policyholder to use to provide their last wishes for the funeral arrangements and how the death benefit should be used.
There may be other final expenses that will need to be paid as well. Many seniors that pass away may have spent time in a nursing home or assisted living facility, so there could be a balances due to these facilities. As for other debts, unless there is sufficient death benefit to cover them, the debts will be satisfied by liquidating assets of the estate.
Leaving behind directions for your last wishes is the perfect way to take care of decisions concerning debts and funeral directions for your surviving loved ones. By planning in advance by purchasing final expense insurance or burial insurance, you help relieve the weight of decision making from the shoulders of your surviving loved ones who are grieving for you.
Does the Death Benefit Have to be Used For Funeral Expenses?
Unless the policyholder has assigned all or part of the death benefit to a funeral home or other institution, the beneficiary can use the death benefit in any way they choose. The insurance company’s only responsibility is to pay the death benefit to the person or persons listed as beneficiaries on the insurance policy. If the beneficiary does not survive the policyholder, the death benefit will be paid to the contingent beneficiary or to the estate if no contingent beneficiary is listed or alive at the time.
The best way to make sure that your last wishes are carried out is by speaking with the loved one in advance and let them know that you would like them to handle your funeral arrangements and that you have completed a “last wishes directive” to help relieve them of the decisions that will have to be made concerning the funeral.
Funeral Expenses
Unless the policyholder has made some arrangements in advance, the beneficiary can expect to pay between $8,000 and $9,000 for a moderately priced funeral. There are however, other expenses that can be associated with the funeral service such as a headstone instead of a marker and helping relatives with transportation and lodging expenses. Unfortunately funeral expenses are climbing and unless they are planned in advance, your loved ones might get taken advantage of because most people are unwilling to negotiate while grieving the loss of a loved one.
Where to Purchase Final Expense Insurance
The most affordable Final Expense Insurance can be purchased through an independent insurance agent who represents many different insurers and can do the shopping for you. Independent agents put their client’s needs before the needs of their carriers and will always look for the best value for their clients. BurialInsurance.org is one of these agencies, and shop around for the best rate for you.
Independent agents who specialize in insurance products for seniors are typically more knowledgeable about Final Expense and Burial Insurance and can accomodate your needs with coverage that will best fit within your budget. If you have health issues that preclude you from being approved for a standard policy, an independent agent will typically have access to multiple insurers that offer “guaranteed issue” or “no medical exam” policies as well.
