9 Reasons to Buy Final Expense Insurance
Say you’re nearing the later years of your life, and have no life insurance policy in place to protect your loved ones if you were to pass away.
At this point, it’s much harder to qualify for affordable coverage, which leaves you discouraged and wanting to give up.
This is where final expense insurance comes in - this type of insurance is used to provide coverage to your loved ones for any debt or bills you may leave behind once you pass away.
In this article, we discuss 9 reasons why you should consider purchasing final expense insurance.
Here’s what we'll cover in this post:
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Here’s what we'll cover in this post:
Funerals Cost How Much?
Most people don’t like to think about death - and rightfully so, it’s not a happy topic by any means.
Thus, many are shocked when they hear how much funerals cost. In 2022, the average traditional funeral service runs anywhere from $8,000-$10,000. If you decide to go down the cremation route you might save a little bit of money, but it can still cost up to $6,000 or so.
If you’re the sole breadwinner of your family and you pass away unexpectedly, this is a lot of money to drop onto your loved ones, who are already grieving and not in a position to deal with another burden. This leads us into our first reason why you should consider purchasing final expense insurance.
9 Reasons to Buy Final Expense Insurance
1. It Funds Funeral Costs
Like we stated earlier, final expense insurance provides coverage for any bills or debt you leave behind once you pass - funeral expenses being the big one. Leaving some money for your loved ones to use for anything funeral-related would undoubtedly be a relief to them.
2. It Aids With Medical Bills
If you have any outstanding medical bills after your death, it’s up to your family to pay them. A final expense insurance policy could give them the funds to either fully pay off your debt, or at least aid in the payments.
3. Financial Support for Loved Ones
Even after you pass away, life still goes on for your family and friends. During the time following your passing, they’ll likely want to take time off work to mourn your death. Without that steady flow of income, providing a little bit of a financial cushion for them would undoubtedly be appreciated.
The great thing about the death benefit is that it doesn’t just have to be used for funeral costs, it can be used for anything your loved ones need help with.
4. Personal Loan Money
Speaking of using the death benefit for various reasons, what if you passed away but still had loans to pay? The last thing you’d probably want is for your mourning family to take on your loans in addition to your death; with the death benefit, your family could use that money to pay for the loans, avoiding the burden.
5. You Can Take Control of Planning Your Funeral
While not all, some people know exactly how they want their funeral to go. Decisions such as whether to be buried or cremated, where you’d like to be buried or have your ashes put, etc. Taking this off your loved ones hands will not only be helpful, but allows you to rest in peace the way you prefer.
6. It Can Serve as a Gift
If you’d like, you also have the option to leave part of your death benefit as a gift to someone you care about - whether that be a family member or not. After the funeral expenses, the remaining money is yours to delegate how you choose.
7. To Purchase a Business Partner’s Shares
If you’re in a business partnership, it may be wise to purchase final expense insurance in case your business partner passes away. Having that extra money could be used to pay off his or her share of the company’s obligations without having to sell the company itself.
8. To Pay for Estate Taxes
As of 2022, if your estate value is over $12.06 million ($24.12 million for couples), the remaining value is subject to taxation. The remaining death benefit could go towards funding those taxes, rather than forcing your family to sell your assets.
9. Applying For a Policy is Easy
This type of insurance is typically relatively easy to obtain, and you have the option to choose a policy as little or big as you’d like. We offer whole life insurance, guaranteed universal life insurance, and term life insurance policies.
Who Needs it?
So what type of person should look into getting final expense insurance?
This ties into some of the points we made previously. If your family would not be able to pay for your funeral and burial costs, estate taxes, and/or go without an income after your passing, these are all good reasons to purchase a policy.
In addition, if you don’t currently have any sort of life insurance policy in place, or if you can’t qualify for any other type of life insurance, final expense insurance is a good way to ensure protection after you die.
Final Expense Options
With a final expense policy, you have the option to purchase up to $100,000 of coverage, and the coverage can extend up to age 100. Within this umbrella, there are a few different types of life insurance you can choose from:
- Term life insurance
- Whole life insurance
- Guaranteed universal life insurance
- Guaranteed issue life insurance
Term life insurance is a temporary form of life insurance that provides coverage for a certain number of years (known as the term). This is generally the cheapest form of life insurance, because it’s temporary and most people outlive their policy. You can typically purchase a 10, 15, 20, 25, or 30-year term, depending on your current age and other life factors.
Whole life insurance is permanent coverage that includes a death benefit plus an investment. With the investment component, it means that part of the premium you pay will go toward your cash value accumulation, which will theoretically build over time.
However, it is important to note that this accumulation is generally very minimal, if any. Whole life is also typically the most expensive form of coverage, as it does not require a medical exam to become approved. It provides coverage until age 80, and you can receive up to $50,000 in coverage.
Guaranteed Universal Life
Also known as GUL, Guaranteed Universal life insurance is thought to be somewhat of a hybrid between term and whole life. Instead of choosing coverage for a number of years like term, you get to choose up until a certain age, such as 90, 95, 100, 105, 110, or 121.
Since the average lifespan of an American is 78-years-old, it is essentially permanent coverage (like whole life). The monthly rates are a little more expensive than term life, but less expensive than whole life.
Guaranteed issue or “GI” policies tend to be a last resort for those who are looking to buy life insurance, but can’t qualify for any other sort of coverage. If you are permanently disabled, have serious health issues, or have a mental disorder that you are currently collecting Social Security or SSDI for, guaranteed issue life insurance may be your best option. It is available to those between the ages 50 and 80, and does not require a medical exam for approval.
Best Companies for Final Expense Insurance
At JRC Insurance Group, we work with a lot of great life insurance companies; each of them have a unique set of underwriting guidelines that caters to different lifestyles and health issues.
So while we cannot say which company is the absolute best for purchasing a final expense insurance policy, there are a few that stand out. If you are not in good health and are looking for a guaranteed issue policy, companies like American General or Gerber Life may be good fits for you.
However, we stress again that each company is unique when it comes to underwriting, and we suggest working with an experienced independent agent to help you find one that best fits your needs.
Questions? We Can Help!
Purchasing life insurance is a big decision, and you want to make sure you find a policy that best fits your needs. That’s where we come in.
At JRC Insurance Group, we have helped thousands of families and businesses with their life insurance needs, and we can help you too! Our agency is licensed in all 50 states and we’re independently owned and operated.
As a non-partial, no-fee brokerage, our goal is match our clients with the best life insurance options available by shopping and comparing rates from 63 highly-rated insurers. By having access to dozens of companies and their guidelines, we’re able to save our client’s time and money.
Most importantly, our services as completely free, and there is no cost to apply for coverage. Give us a call toll-free today at 855-247-9555, or you can request a free quote online to compare rates and options from dozens of insurance companies in less than a minute.
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.