Funeral insurance is not actually used in the insurance vocabulary. The policies are called Final Expense Polices, which are whole life policies, normally used to pay for funeral cost. But usually consist of built-in cash value options.
Premiums are calculated by dollar amount per thousand $.
Example: Multiply rate per thousand times number of thousands of coverage: $38.59 x 50 =$1,929.50
There are usually four underwriting questions, and a telephone interview, there are no routine medical exams required.
Final Expense Policies are ideal for clients with minor health issues.
Issue ages are normally: 25 to 80 depending on the companies products offer.
Coverage amounts normally start at: $2,000 to $50,000 Final Expense policies are also offered by a number of funeral homes.
Graded Death Benefit policies are designed as: Final Expense Policies for ages 25 to 80. Older clients sometimes desire coverage for final expenses and don’t want to go through the hassle of full underwriting.
Final expense policies are often used to supplement the difference in funeral cost with additional social security death benefits.
Explanation of the Final Expense Policy:
Graded Death Benefit Policies :Policy year 1: Benefits payable equals the refund of premium plus 12% interest.
: Policy year 2: Benefits payable equals the refund plus 24% interest.
: Policy year 3: The full death benefit is payable.
There are sometimes) Free: built-in inflation guard benefits – the death benefits increases every five years for twenty years.
Free: extended hospital stay (20 consecutive days) premium is waived for three months
Free: Common Carrier Accidental Death Benefit. Benefit death benefits are payed double if death is due to an accident.
Payment options: Monthly bank drafts are advised. The initial premium will be drafted upon the receipt of the life application. The insured has the option to designate a date for future premiums payments. Bill by mail payments are placed on a quarterly payment mode. Premiums are normally higher due to processing fees.
Before you purchase insurance always:
Compare the Companies Rates Behind Your Protection:
1. Check the companies A.M. Best rating.
2. Make sure the company has an A or A plus rate, which is considered ( Excellent) rating.
3. B & C rated companies have usually had some type of financial strain, and are prone to go under, or file bankruptcy.
Although your coverages will increase over time, It is alway a good idea to contact your agent about extra coverage.
If you have 6,000 dollars in coverage, remember final expense preparations increase each year.
You will find that with most companies you are allowed to purchase more then one policy. This may depends on the coverage cut off amount, which varies with each company.
Remember that most companies want except a risk over the age of 80. So it is some times good to add more coverage while your age is still in the the limits of your existing policies guidelines.
Giving yourself peace of mind, is called taking care of life before you go. Remember once your coverage waiting period has been met, you will receive interest to your policy. This will mean that your life insurance policy has revolves into a living benefit. Most whole life policies have a built in cash option benefit. This means that after paying premiums for a number of years, you will have the options: To cash out your policy. Or you can use the policy as collateral toward other loan options.
I hope that this article will be helpful to clients that are shopping for: Final Expense Policies.