Final Expense Insurance Plans
A final expense life insurance policy plan isn’t the same as what we generally think of as life insurance. Insuring your life and leaving your household and your loved ones with sufficient assistance after you pass away is a different policy. Typical life insurance (term, universal life, or whole life) are policies that attempt to provide money to cover loss of income or support from either spouse, ensuring kids can make it through college, pay off a mortgage, etc. Final expense plans deal with funeral costs the value of your policy is based on the cost of your desired funeral. While other types of life insurance policies can cover values of million of dollars, it’s uncommon for final expense insurance plans to be over $20,000.
Do I Really Need Final Expense Insurance?
The answer to that question will certainly vary from person to person. Do you already have term or whole life insurance? If you do, that plan can aid your loved ones in paying for your last expenses, although the pay out from the insurance company commonly takes a month or more to be paid. Final expense insurance plans will typically pay out within 72 hours of receipt of Death Certificate.
Alternatively, you can designate certain funds from your estate to be used for final expenses. This could be termed “self-insurance.” To self-insure is simply to utilize your own cash as opposed to use an insurance policy payout for these “final” bills.
Could your family self-insure for your final expenses? When you consider that it can take about $10,000 for funeral service costs, it might be worth considering a small monthly premium to offset this expense. Some might want to cover the cost of a “life celebration” or possibly a journey to scatter your ashes in a meaningful place. These are all considered final expenses.
When we consider that many people leave their families with bills to pay, a lot of debt at the end of life’s journey, perhaps you may want to consider paying a small premium for the final expense insurance coverage. Remember, the Social Security Administration offers only $255 for final expense insurance. With this payment, you’ll only be $9,745 short for the average cost of a funeral.
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