Last Updated on September 3, 2020 by lifepolicyshopper
If you’ve ever been involved with arranging a funeral or helping to pay for one, you may have been startled at how involved they are and how expensive they’ve become. Funerals are expensive and the prices aren’t going down! Final expense insurance for seniors allows you to prepare and pay for final expenses in advance.
Because of constant advertising by many of the insurance carriers who offer final expense and burial insurance, seniors have started flocking to insurance agents to make certain they don’t leave a financial burden to their surviving loved ones. Certainly, you don’t want to do that to your family, do you? If not, take a few minutes to learn about final expense insurance for seniors
Fortunately, the competition among insurance carriers that offer final expense insurance has never been greater and as a result, seniors will benefit from this competition in the form of lower insurance rates
What is Final Expense Insurance for Seniors
Final expense insurance for seniors is a whole life insurance policy that is designated to pay the final expenses we leave behind after passing away. These policies are very easy to purchase because they have limited underwriting and do not require a medical exam or blood/urine tests. Insurance companies who are targeting seniors for life insurance are aware that their underwriting guidelines need to be more liberal than traditional life insurance but at the same time, the rates must be affordable.
To make the process even easier for seniors, most companies that offer final expense insurance provide two or three different types of plans so that almost anyone who is alive will qualify for life insurance. Here are the three types of plans that are available:
Level Benefit Final Expense Insurance
Level benefit final expense insurance is the preferred type of coverage to purchase. The term level means that the policy pays a level death benefit (full death benefit) whether the insured dies as a result of natural or accidental causes. Also, the level benefit policy provides “first-day” coverage so there is no waiting period to deal with. The level benefit final expense insurance is medically underwritten so if an applicant answers “yes” to certain health questions or multiple health questions, they’ll likely not qualify for coverage.
Graded Benefit Final Expense Insurance
The graded benefit plan was designed for applicants who do not qualify for a level benefit plan. This plan typically costs more than a level benefit plan and the death benefit is paid out in percentages of the full death benefit. If the insured dies in the first year, the company will pay 25% of the death benefit. If they die in the second year, the company will pay 50% of the death benefit. If they die in the third year, the company will pay 75% of the death benefit. Beginning in year four and thereafter, the full death benefit will be paid by the company.
Guaranteed Issue Final Expense Insurance
The guaranteed issue (guaranteed acceptance) plan was designed for applicants with either serious or multiple health issues and cannot qualify for the level benefit or graded benefit plans. This plan does not take the applicant’s health into consideration when underwriting the policy literally anyone can qualify for coverage as long as they meet the age qualifications.
A guaranteed issue final expense policy has a two or three-year waiting period where if death is the result of natural causes during the waiting period, the company will pay a death benefit equal to the sum of payments paid in plus an additional percentage like 5 or 10%.
Why use Whole Life Insurance when Term is Cheaper?
Most insurance companies that offer final expense insurance for seniors use whole life insurance because it contains the guarantees and benefits that seniors prefer in an insurance policy. These guarantees are similar to traditional whole life policies and are critically important for final expense coverage.
- Insurance coverage for a Lifetime – Seniors know their policy will be there when needed because the insurance company cannot cancel the policy for any reason other than non-payment.
- Guaranteed Level Premiums – Once issued, the insurance company cannot increase the periodic premiums even if the insured contracts a terminal illness or is forced to live in a nursing home.
- Guaranteed Cash Value – A final expense insurance policy accumulates cash value over time that is available to the policyholder by way of policy loans, withdrawals, or policy surrender for cash. A final expense insurance policy is guaranteed to earn a minimum interest rate no matter what happens in the marketplace.
How can I find the Best Final Expense Insurance for Seniors?
Your final expense insurance policy should be shopped with all insurance carriers. Doing this alone is certainly cumbersome so it pays to work with an independent insurance agent that represents most of the highly-rated final expense insurance companies in the marketplace. Additionally, you will typically get better rates from the companies that require a face-to-face interview then the companies that allow sales over the phone. Because the folks at Life Policy Shopper know that lower rates are available from companies that require face-to-face interviews by an agent and use a network of agents across the US to deliver the best value on whole life insurance products for seniors.
We do this because final expense companies that offer the greatest value REQUIRE a face to face application completed by a licensed agent. This allows us to access all final expense insurance products, not just the ones that can be sold over the phone.
Click on the map below to access a listing of companies that have the lowest rates in your state:
Now that you have learned the ins-and-outs of final expense insurance for seniors, call the professionals at LifePolicyShopper with any questions you may have and to get a firm quote based on your health circumstances, age, and preferred death benefit.
Terry Biddle is a business owner, blogger, retired Army National Guard officer, and a current federal employee. He works with seniors, federal employees, and members of the military to get the most life insurance benefits at the greatest value across the full spectrum of term and permanent products from fully underwritten to no-exam and guaranteed issue.