Final Expense Insurance (aka funeral or burial insurance) is meant to cover the bills that your loved ones will confront after you pass away, including funeral expenses and medical bills. At Final Expense Direct, we represent our clients with their best interest in mind, every day. Our team is here to answer your questions about final expense insurance. There are many “what if” scenarios and plenty of questions that arise about coverage.
How Is Final Expense Insurance Different from Using Savings?
It seems wise to save money to use for your final expenses. However, you might have to reach into that money before you pass away. There’s no way to know for sure because diseases, injuries, and illnesses are unpredictable. Also, medical debt is the #1 cause of bankruptcy in this country. A single stretch in the hospital could erase your entire savings. Paying into a final expense insurance policy creates more certainty than depending solely on personal savings.
Is Final Expense Insurance the Same as Life Insurance?
Final expense insurance is a form of whole life insurance sold in small quantities, typically between $5,000 to $25,000. The target demographic tends to be people who are age 50 and older, often in poor health and on a strict budget. They don’t have other life insurance or savings to handle final expenses. Final expense policies usually don’t require a health exam and are easy to get approved for.
Do Funeral Homes Offer Final Expense Insurance?
Final expense insurance is purchased through an insurance company or through an agent, like the ones at Final Expense Direct. Some agents who are affiliated with a funeral home could sell something called “pre-need insurance.” This is different from final expense or burial insurance.
With pre-need insurance, the payout goes straight to the funeral home. With burial insurance, the payout goes to your chosen beneficiary.
How Many Quotes Should I Get?
We recommend getting three quotes. Prices aren’t advertised online, so you’ll need to call the funeral home directly. We feel like comparing three is enough to give you a general idea. But you should get as many as it takes to feel comfortable that you’re getting the best price or service for your budget.
How Much Coverage Should You Buy?
To determine how much coverage you need, try to estimate the sum of your final expenses. You can do this in four simple steps:
Step 1: Calculate Household Expenses
To estimate your family’s expenses, take the amount of a normal month’s expenses (include utilities, car expenses, house payments, food and transportation, insurance fees, etc.) and multiply the total by three. This will be about what your family needs to survive for a few months. So, if your total monthly expenses are $3,000, then your amount for family expenses will be $9,000 ($3,000 x 3 = $9,000).
Step 2: Consider Funeral Expenses
Funeral expenses are dictated by what type of services you choose. See this list to help get an accurate estimate of the typical funeral-related expenses. We can assume, at this moment, that your expenses will average $10,000.
Step 3: Add to Get Total Final Expenses
Next, add the above numbers together. In this case, it’s $9,000 (family expenses) + $10,000 (funeral expenses) = $19,000. So, this $19,000 would be the minimum coverage needed to account for both of these expenses.
Step 4: Keep Inflation in Mind
Finally, there’s an inflation factor that varies for men and women. This factor depends on your age range. For example, for men ages 63-65, the multiplier is 1.83. So, you’d multiply 1.83 by the total you had from Step 3 for the total estimated cost.
Won’t the Arrangements Allocated in My Will Be Enough?
You can try to make funeral arrangements through your will, but don’t expect reliable results. Wills are usually read after the funeral service and they must pass through probate court before provisions can be implemented. The probate process can take many months, at best. Chances are slim that your will would provide any immediate help with your final expenses.
What If I’m a Veteran?
You may wonder if you need final expense insurance if you’re a veteran. Burial benefits for veterans culminate at $2,000 for a service-related death and merely $300 otherwise. Also, Veterans qualify for free burial in national cemeteries. But, as we’ve mentioned, the average cost for a funeral and burial is around $7,000 – $8,000. Even if you qualify for Veterans’ benefits, there could still be a large sum left over. With a flexible final expense policy, you can fill in the gaps.
What If You Have Medicaid or Receive Social Security Benefits?
Unfortunately, Medicaid and Social Security benefits barely begin to cover final expenses. Medicaid grants $1,500 (at most) to be counted toward funeral expenses. Social Security provides only $255 to a surviving spouse or child to be used for funeral costs.
What If You Have a Regular Life Insurance Policy?
Some folks buy final expense insurance to coincide with an existing life insurance policy. But, if you have a separate policy that focuses solely on funeral and burial costs, you can protect your beneficiaries from having to pull money from the general life policy to cover the final expenses.
What If a Family Can’t Afford a Funeral?
If you can’t afford a burial or funeral, you might be able to get federal government assistance. Here are some of the programs that could help:
- Personal loans – apply through your bank or credit union
- Veterans benefits
- Federal Emergency Management Agency (FEMA)
- Crowdfunding/Crowdsourcing – raising money through donations
- State government assistance
Still Have Questions? Call Final Expense Direct
We’re ready to help you pick the final expense plan that’s right for you. For further questions about final expense/funeral/burial insurance, contact Final Expense Direct. You can also call 1 (877) 674-0236 for immediate assistance. We look forward to helping you!