Do you have an elderly relative? Are you curious to learn about final expense insurance?
With the average cost of burying a family member between $7000 and $12,000 in America, exercising prudence in this area is a wise choice.
Having the right insurance in place in the case of an unexpected death will not only save you money, but will also alleviate some heartache since you’ll be better prepared.
In this article, we’ll explore what funeral insurance is, as well as what you need to know about it.
Final Expense Insurance: What is it?
Final expense insurance — otherwise known as funeral insurance — is a kind of whole life coverage. Used as a payout for funeral expenses, medical bills, and other costs associated with the passing of a loved one.
How Does it Work?
Funeral insurance covers the price for burial services. Additionally, it can also pay for any pending fees, debts, or other types of payments that are due.
Here are a few facts to keep in mind about final expense insurance:
- Over time its value can increase
- The policy won’t be neutralized due to health changes
- You can receive coverage without a medical examination
Furthermore, funeral insurance can be bought as both a whole life or a term policy.
Coverage: How Much Should I Buy?
To get an accurate assessment of how much coverage you need, you’ll have to consider a few things. Below is a list of 4 steps you should take to determine the amount of insurance you should buy.
1. Calculate the Expenses for Your Household
Tabulate your monthly household expenses (rent, food, utilities, entertainment, etc), and then multiply it by three. This is the amount needed for your family to live for 90 days.
In this example, let’s say your monthly expenses are $3000. You then multiple by three to get $9000.
2. Consider Burial Costs
The price of a proper burial is set by the services you select. For argument’s sake, we’ll go to the lower end of the spectrum at $8000.
3. Add it up to Determine the Final Cost
You can get the total cost by adding the two above amounts. Continuing with our previous examples, this would bring your grand total to $17,000.
4. Think About Inflation
Once you have your figure from the third step, you’ll now want to think about inflation. Take the number you got from step three, and multiply it by the inflation factor, you will then get a clear view of the final expense insurance quote.
Advantages of Final Expense Insurance
Besides the monetary aspect, there are other reasons to consider getting funeral insurance. They are as follows:
- Supply loved ones with peace of mind knowing they won’t have to stress about money upon your passing
- The policy’s cash value racks up tax-deferred
- Guaranteed death benefit
Taking on the Responsibility
No one likes thinking about these kinds of things. Death is not a pleasant experience — especially where loved ones are concerned.
But by taking responsibility for this matter via getting final expense insurance, you’ll make life easier for everybody after you’re gone.
If you’re curious to learn more or have any questions that haven’t been answered in this article, get in touch with us today.
We look forward to hearing from you.