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Final Expense Coverage

It is often called final expense coverage or burial coverage. It’s the same concept. This is a simplified issue whole life policy that we’re talking about. Let’s learn more about what this product is.

Simplified Issue

The simplified issue of these policies means they don’t require medical exams. Now, no medical exam doesn’t mean they don’t consider your medical records. There are policies that don’t ask medical at all, but the better health you’re in the more advantageous your policy.

Insurance companies are relatively lenient on underwriting, but there are some standards. The standards vary from company to company and it is the job of a skilled independent agent to help you navigate the intricacies of the companies to find the best fit for you.

Whole Life

These policies are designed to last a life time. The rates don’t increase and the coverage lasts for life. Not all senior polices are life time policies. The savings component of the policy helps defer the cost of the coverage. Whole life is more expensive than term, but as you age the cost becomes more competitive, especially if you have some health problems

Guaranteed Issue

Guaranteed issue policies ask no medical questions. In return the company reduces your death benefit to a little more than the premium paid into the policy for the first two years of the policy. Most guaranteed issue policies turn into a full fledged policy starting the beginning of the third or fourth year. Because your health is not sufficient enough for coverage on day one, you can purchase your coverage with a combination of premium and time.

Note: With Guaranteed Issue, your agent will never recommend taking out a policy if you have a terminal illness. This is not a great solution. This solution is best for people with reduced life expectancy, but not that short.

Guaranteed Issue is broken up into two categories:

Whole Life Guaranteed Issue

These policies are meant to provide long-term coverage. Once you get past your initial 2 – 3 year window of reduced death benefit the coverage is good for life (as long as you pay your premium). You cannot be turned down for medical reasons. The policy never goes away

Coverage is most widely available for ages 50-85, but we have a company that will write those over 40.

Coverage amounts range from $5,000 – $25,000 per company.

Term Guaranteed Issue Policies

I’m going to hit this quick. Guaranteed Issue term policies are incredibly rare. The one company that we’ve found (the only one we’re aware of) has a product that is really geared towards younger clientele. The price does go up over time with this product as well (unlike all of the other products we sell) If you’re over 50, then the whole life policy makes a ton of sense. If you’re younger, the term policy can be a great stop-gap.

Big take away? If you’re over 40, whole life probably makes more sense, if you’re over 50, whole life makes a ton more sense.

The Cost

These policies can be incredibly affordable. They’re often low coverage amounts. The policies start off at $2,000 in coverage and can go as high as $40,000 in coverage, but are much more common covering between $10,000 – $25,000 in coverage. Dollar for dollar, these policies are often more expensive than term because they’ll last longer. The older you get, the less healthy you are the more these policies become more cost competitive.

We’re regularly asked about price, but price is an incredibly variable thing. The value of a specialty adviser is helping you navigate the policies that are available for you. A few minutes on the phone, and we can help you understand what your options are and provided what is needed based on your budget.

The Right Kind of Company – Are you healthy enough?

Companies have different underwriting guidelines. Underwriting guidelines are the guidelines that each company uses to decide what they will and will not cover. Clients often wonder why we ask medical questions. The answer is simple. The healthier you are, the less expensive and the more options you have for coverage.

Most of these companies will accept common health issues like:

  • Controlled high blood pressure / Hypertension
  • Controlled high cholesterol
  • Minor diabetes
  • Minor Depression / anxiety
  • ADD/ADHD
  • Minor Asthma
  • Benign Prostatic Hypertrophy
  • Diverticulitis/Diverticulosis
  • Fibromyalgia
  • Goiter/Graves Disease
  • Gout
  • Hyperlipidemia
  • Hyperthyroidism/ Hypothyroidism
  • Hysterectomy (benign)
  • Irritable Bowel Syndrome (spastic colitis)
  • Kidney Stones
  • Lupus (Discoid)
  • Mitral Valve Prolapse
  • Heart Murmur
  • Narcolepsy
  • Osteoarthritis
  • Prostatitis

Some companies will even cover certain ailments that other companies usually will not cover. Even with first day coverage. It helps to have an agent who can help you navigate the options. Some of these conditions are:

  • COPD
  • Recent blood thinners
  • Hepatitis C
  • Diabetic insulin use or with Neuropathy
  • Atrial Fibrillation
  • Systemic Lupus
  • Sarcoidosis
  • Many mental health conditions
  • Brain Tumors

Of course there are always exceptions and companies can change underwriting guidelines over time. The listed conditions are just examples of the types of things that can be approved. The key here is to review your case with an experienced agent who can help you navigate what is available. These policies can provide coverage for those who otherwise would not qualify due to medical requirements.

Conclusion

Final expense coverage is special. It gives people (who might otherwise not qualify for coverage) the opportunity to get the coverage they need to help reduce the cost of their final expenses shared by their parents. Most often, I’m discussing this coverage with a person who has recently gone through pain twice. First for the loss of their loved one and secondly in trying to pay funeral expenses out of pocket.

Would you like a review of your health to see what kind of coverage you would qualify for, you can fill out the questionnaire here: