Why Final Expense Insurance is Critical and Must Not Be Ignored

Overview

Published: 11/06/2013

by Barry Harrin

Photos

It seems that both life insurance and death are subjects most people prefer to avoid or ignore … until it’s too late. Unfortunately, life and then death seem to get in the way, turning our lives and the lives of those we love upside down. Nobody expects to die prematurely, but the truth is … roughly 600,000 people die each year in the prime of their lives.

Most people don’t realize how critical final expense life insurance is to their loved ones. When someone dies without enough life insurance to cover final expenses and the other bills that must be paid, loved ones are harmed. In addition to their grief and suffering, they have the added stress of unexpected financial burdens.

With death, there are many expenses a family must pay right away. There's funeral, cremation, and burial expenses that cost thousands of dollars. Most families do not have the funds in place to pay for these expenses, and the insurance they have won't pay out until after the funeral in most instances.

Depending on the type of funeral you choose, expenses include:

Traditional or cremation funeral home expenses, casket or urn, cemetery plot, gravestone, death certificates, obituary, flowers, honorarium, police escort, unpaid medical and pharmaceutical expenses owed by the deceased, rent or mortgage payments, and, of course, unpaid taxes. These are a sample of the type of final expenses your family could be burdened with during their time of mourning.

Final expense life insurance policies, unlike traditional term and whole life policies, are purchased in smaller amounts such as $5,000-$25,000. Final expense polices generally do not require a physical, simply a series of health questions. People who are over 75 years old and/or have a serious health problem may receive a policy with a "graded death benefit." Generally, a plan with a graded death benefit increases the coverage amount over a period of time. Beneficiaries receive less than the face amount of the policy when the purchaser dies in the first few years of the policy.

The best way to find the right final expense life insurance plan is to consult with a professional agent or broker. Since everyone is different and one size does not fit all, that experienced agent or broker answers your questions and finds you a plan that fits both your needs and your budget. This is a critical step to ensure that your family and loved ones are taken care of when you are gone.

Barry Harrin is an experienced life insurance broker and author from San Antonio, Texas. To learn more go to www.harringroup.com