State-regulated life insurance program: Is it worthwhile?

Written by Kim Wilhelm

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Last Updated 01 Mar 2024

Have you received a letter or leaflet promoting the new state-regulated life insurance program? They claim that they will pay all of your final expenses up to $30,000 (completely tax-free), even if you've been denied by life insurance companies in the past. Sounds too good to be true, right? Sadly, it is!


The state-regulated life insurance program is not free. It's a scheme designed to sell life insurance, and you will quickly be handed over to an army of insurance agents trying to get you to buy expensive term life policies that may not even cover all of your funeral expenses.

Don't fall for this trick. You're far better off acquiring trusted final expense insurance that covers all of your final expenses and comes with first-day coverage and low rates. And if you use a reputable life insurance agent, your personal details will never be sold to an insurance company or marketer, so you won't be spammed.

Let's take a closer look at the so-called state-regulated life insurance program and whether or not these life insurance mailers can live up to their promises.

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Is the State Regulated Life Insurance Program Legitimate?

When a company adds "state-regulated life insurance" to its name, it sounds very official. Some even hint at an affiliation with a government agency. The truth is that all life insurance companies are state-regulated insurance companies - if you want to sell life insurance policies, you need to get a license from your state's insurance department. They don't issue this license to just anyone, either. You need to meet stringent requirements first, including submitting detailed financial information.

Once the Department of Insurance has reviewed and verified that all requirements are met, they grant approval for the product to be offered. From a technical standpoint, it is accurate to say that the insurance product is "state regulated."

The use of the phrase "state regulated" in these advertisements is merely a clever wording choice to dupe you into handing over your contact information so it is sold. It's not illegal, but it can be highly misleading to create the impression that a government body within the state is actively overseeing and managing the program. In reality, no government entity at any level is aware of or involved in this particular "offer."

While you can't exactly accuse the company of sending these mailers of scamming people, it's not exactly an honest way of doing business. Many people assume that the insurance is sponsored by a government agency and that the final expense insurance policy they buy will cover all of their final expenses when they pass away. In fact, it's just a clever way for the company to get their hands on your details so they can sell them to life insurance companies. There is no state-regulated life insurance program as such, and you will get bombarded with phone calls by multiple agents if you show any interest in burial insurance at all.

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How To Spot the State-Regulated Life Insurance Program Mailer

The letters and leaflets all use phrases like "state-regulated life insurance," "state-regulated program," "state-run program," or "state-regulated final expense insurance," but they may use different names in different states, e.g., 2023 Benefit Information For Mississippi Citizens, 2023 Benefit Information For North Carolina Citizens, New Virginia Funeral Benefit Program, New Benefits for North Carolina Residents, 2023 Benefit Information For Idaho citizens.

The letter often resembles communication you might get from the state government, with headlines like "Important Medicare Open Enrollment Notification" or "State Benefit Update." But if you take a closer look at the fine print, you'll see a disclaimer that says the company isn't affiliated with any government agency at all.

Some of these prospecting tools will even claim that your existing insurance company won't cover your final expenses or that Medicare won't pay your medical bills. They often target vulnerable people, including senior citizens, with this messaging.

Some states do offer support for funeral expenses, but only if you qualify and have contributed to Social Security. Even then, the benefit usually isn't even enough to cover your final expenses. At most, the only money you'll get is around $250 or so to put toward end-of-life expenses. This is a once-off, limited benefit and not the same as burial insurance at all. No government agency will pay final expenses for you or your family.

What Should You Do If You Get a Letter From a State-Regulated Life Insurance Program?

If you've received a letter, leaflet, or postcard, or seen an ad by these companies, don't get in touch and don't hand over your personal information. If the company claims that your existing insurance policy won't provide sufficient death benefits or cover your funeral costs, get in touch with your life insurance company and put your mind at ease, or speak to one of our licensed insurance agents about your concerns.

If you are still worried, you can verify any benefits you may be entitled to on your state government's website. You can also look for reviews and ratings from the Better Business Bureau or on Google to see if there's any information about the company or the programs they offer.

What Is the Alternative to State-Regulated Life Insurance?

Even if you know that these mailers don't have your best interests at heart, you may still want to explore some burial insurance options. Burial insurance or funeral insurance can go a long way toward helping your family cover the different expenses that inevitably arise when someone passes away. You don't want your death to place a financial burden on your family, which is why this special life insurance policy is so important. Let's take a closer look!

What Is Burial Insurance?

Final expense insurance is a type of whole life insurance policy that is designed to cover the costs associated with a funeral, burial, and other final expenses. This coverage lasts until the insured reaches 120 years old, ensuring lifelong protection.

Upon your death, the insurance company pays out a tax-free benefit to the designated beneficiary. Unlike pre-paid funeral plans, final expense insurance is not assigned to a specific funeral home, which means your family can use the money as they see fit.

Unlike many other life insurance policies, this life insurance product doesn't need you to complete a medical examination and is readily accessible, even to senior citizens or people with serious health conditions.

Key Benefits of Legitimate Final Expense Insurance Plans

  1. Affordability: Final expense insurance is often more cost-effective than pre-paid funeral plans, making it an accessible option for many individuals and families.

  2. Easy Qualification: Qualifying for burial insurance is relatively straightforward, as it does not require a medical exam. Instead, applicants only need to answer a few basic health questions.

  3. Guaranteed Approval: Most people, regardless of their medical conditions, can qualify for burial insurance coverage. The absence of medical exams streamlines the approval process, making it more accessible for individuals with pre-existing health conditions.

  4. Fixed Premiums: Final expense insurance offers the advantage of fixed premiums that will never increase due to advancing age or changes in health conditions. This ensures that the policy remains affordable and predictable over time.

  5. Guaranteed Death Benefit: The death benefit amount is also fixed and guaranteed to never decrease for any reason. This provides peace of mind knowing that the coverage will remain intact and sufficient to cover final expenses.

  6. Lifelong Coverage: Final expense whole life insurance policies remain in force as long as premiums are paid on time, even after the insured reaches 80 years old. This ensures that the coverage remains in place, offering lifelong protection.

  7. Cash Value Accumulation: Final expense insurance is a whole life insurance policy that accumulates cash value over time. The cash value can be utilized to pay premiums or can be borrowed in case of a family emergency.

  8. Flexible Use of Benefits: The death benefit payout can be used to cover funeral, burial, and final expenses. Any remaining funds can be utilized by the beneficiary for any purpose they deem necessary.

  9. Portability: Final expense insurance is portable, meaning that the death benefit payout can be used at any location, as it is not tied to a specific funeral home. This feature is particularly beneficial for individuals who have moved or changed their minds about funeral arrangements.

  10. Tax-Free Benefit: The death benefit payout from final expense insurance is tax-free. Beneficiaries receive the full amount without any deductions or taxes, providing financial relief during a challenging time.

Finding the Right Final Expense Insurance Policy

To begin your search for final expense insurance, start by obtaining a free quote from an independent life insurance agency. These agencies can provide you with quotes or price estimates from multiple insurance providers, saving you the hassle of contacting each company individually.

Independent life insurance agencies, like Final Expense Direct, work with A+-rated insurance companies that specialize in covering seniors, even if they have pre-existing health conditions. They can match you with the burial insurance company that provides the best rate for your specific needs and budget.

During the quote process, it is essential to disclose any health issues you may have. The agency's agents can pre-screen your conditions and recommend providers that are more accommodating to your specific health needs.

After receiving the quotes, carefully consider which insurance policy is most affordable and meets your requirements. Two common types of burial insurance policies are simplified issue and guaranteed issue.

Simplified Issue Burial Insurance: Coverage Without the Hassle

With this type of final expense insurance, you don't have to worry about going through a medical exam. Instead, all you need to do is answer a few basic health questions during the application process. It's a streamlined approach that allows for a quicker approval process, making it more accessible for individuals, even if they have pre-existing health conditions. By removing the need for a medical exam, simplified issue burial insurance provides a convenient and hassle-free option for those who may have difficulty qualifying for traditional life insurance. It offers the necessary coverage to address funeral and burial expenses, bringing peace of mind to policyholders and their loved ones.

Guaranteed Issue Burial Insurance

With guaranteed issue burial insurance, you can say goodbye to worries about your current health condition. This type of coverage is designed to offer acceptance regardless of your health. No medical exam is required, and you don't have to answer any health questions. As long as the policy is available in your state and you fall between the ages of 50 and 80, you're guaranteed acceptance. It's the perfect choice for individuals facing significant health issues or high-risk conditions. Guaranteed issue burial insurance provides an opportunity for those who may have been declined coverage in the past to secure the financial protection they need for their final expenses. 

While the Guaranteed Issue premiums may be slightly higher compared to other types of coverage, it presents a viable solution for those who may not qualify for traditional life insurance due to their health conditions. With guaranteed acceptance, this type of policy ensures that individuals can obtain the coverage they need, offering financial peace of mind for themselves and their loved ones.

Contact Final Expense Direct to determine if you qualify for Simplified Issue or Guaranteed Issue. We’ve been able to find coverage for seniors with health issues up to age 89.

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Don't be misled by companies that are trying to generate sales leads and sell policies that you may not want or need. There are dozens of credible life insurance options out there, even if you fall into the "high-risk" category and have a hard time finding a provider.

By buying a final expense policy from a reputable company, you can rest assured that your funeral cost and final expenses will be covered when you pass away.

Give us a call at 1-800-217-0014 to learn more about affordable burial insurance from reputable life insurance companies. Our highly skilled and compassionate insurance agents can put you in touch with the best possible insurance provider based on your unique needs and budget.


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