From protecting your car and home to life insurance, there’s an abundance of insurance types available to suit your needs.
When it comes to final expense insurance, what is it, and what exactly does it cover?
Check out this list of some basics you need to know so that you can decide why, how, and when this insurance is right for you.
Final Expense Insurance 101
There are many types of insurance, and final expense insurance is a whole life policy that includes a small death benefit. This insurance is easy to get approved and is sometimes referred to as either funeral or buried insurance.
You may see it listed as modified whole life insurance, which is a term often used by someone selling insurance. All of these nicknames are marketing terms often used by salespeople. You can learn more about the basic sales script here.
The benefit of this insurance ranges from as little as $2,000 to $50,000, depending on the policy. It’s more affordable than regular life insurance but otherwise, there is not much difference between the two.
What Does it Cover?
While most life insurance provides your loved ones with a lump sum of money, final expense insurance also includes a death benefit. This separate amount covers a range of expenses including funerals or memorial services, embalmings, caskets, or cremation.
It’s important to note that your beneficiaries may use this money for any purpose and not just for your funeral or burial. However, most people find this benefit helpful since funeral costs can be quite expensive.
Most people don’t have money saved for funeral expenses. That’s why offering final expense insurance can be one of many insurance leads that are profitable for salespeople and insurance companies.
What Else You Need to Know
When you apply for life insurance, you’ll be offered a separate death benefit. This premium can be expensive depending on your age and health status.
Many companies won’t offer this benefit in a small enough amount to make the premiums affordable. However, final expense insurance is less costly and can be made available to everyone, including seniors who are in poor health.
Keep in mind that this type of insurance provides a smaller death benefit to make the premiums a bit more affordable. The policy will become permanent no matter when you die so that your heirs get the benefit you’ve agreed upon. Overall, it will give you peace of mind knowing that your loved ones can handle the cost of your burial, funeral, or cremation.
Is it Right for You?
Now that you know a bit more about final expense insurance, you can decide whether this policy is the right choice for you. If you don’t already have funeral benefits written into your life insurance policy, then this can be an excellent way to make sure those costs are covered.
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