Modified whole life insurance is a special type of permanent life insurance offering a much lesser premium, in return for higher premiums, after an introductory period of the first few years (usually five years).

To begin, modified whole life insurance has much in common with traditional life insurance. However, the distinction between the two lies in the premium contract structure. Unlike in Modified Life, premiums in traditional life insurance are flat throughout the whole policy.

Modified Life Premiums

To start, the amount of premium paid is lower in the first years of the policy for a modified whole life insurance plan. This lower premium period typically lasts for the first five to 10 years, depending on the issuer company.

After the expiry of the lower premium duration, the insurance costs for the rest of the insured’s existence are usually a little higher than the traditional whole life insurance policies. Generally, premium amounts only increase once.

Who Benefits from a Modified Whole Life Policy Structure?

First, a target group is families, in which the breadwinners may be at the early stages of their careers. However, they expect an important wage increase shortly. Second, this product may also work well if you have other financial commitments, and you expect to retire within a few years.

Let’s look at why:

• Modified whole life insurance is life insurance with a fixed amount of time flexibility in the payment of premiums. This encourages you to start building a strong insurance policy until you can pay even higher premiums.

• Modified Whole Life insurance policies deliver lower premiums and also offering all the basic benefits of whole life insurance policies. This kind of policy gives young families a huge opportunity to build assets. Even in times when they struggle to achieve their goals.

• Depending on the policy a family can generate cash value, and at the same time be eligible for dividend payments. Another good thing is that the cash value is tax-deferred and money can be lent from the cash value tax-free.

Financial Protection with Flexibility

In addition, Modified Whole Life is a way to create a financial basis that can be used through financial difficulties. It’s not about “if” you are in a difficult time; it’s about “when” you feel it.

You will handle your financial crisis in such times with the cash value accumulated in this policy. It can also provide education for your kids, help supplement pension income, and several other needs. Each of these needs can be funded as low-interest loans and the quality of the policy can still be maintained.

As with traditional life insurance, you have the key advantage of being able to continue with modified whole life insurers that you can pay flexibly, and still the benefits it offers remain assured. This allows families who want to develop their assets without pushing their financial constraints to achieve life-safety.

How it Works

Basically, for the first five years of the policy, the premium for such insurance is paid at a lower rate. Then, it increases after this period – starting from the sixth year of the policy. This will increase the value of the cash inside it and allow it to use its dividends. Also, the cash value does not require taxes, and if money was taken from the cash value, it is tax-free.

Although the modified whole life insurance can sound too good, it also has a major downside, particularly if you invest in it. Modified whole life insurers take a long time to build up cash value compared with whole life insurers.

This form of insurance allows you to receive a range of coverage at a very low rate and also allows you to tailor the policy to fulfill your particular requirements to eliminate the price of coverage that you do not need.

Structuring Your Modified Whole Life Policy

When structuring a policy, you may opt to customize it with riders. Riders you may consider including in your policy include: accidental death, child coverage, disability, and living benefit.

• If the accidental death coverage is included, it may be helpful because the death benefit payment can be raised if you die in an accident.
• Also, child coverage would be good if you have children because the policy is not costly and when they have grown up you can convert from there to permanent life insurance.
• In addition, if you are concerned with losing your work if you are disabled, coverage of your disability will guarantee you do not lose your policy as long as your premiums are covered.
• Another rider you can think about is the living benefit that comes to you if you are one day diagnosed to have a fatal illness and are supposed to die at a certain time, you can use any of the death benefits.

The same usage as traditional whole life insurance is applied to modified premium products. This includes estate planning, the provision of living costs for survivors, the funding retirement, education financing, or the coverage of a mortgage payment after death.

Who Needs Modified Whole Life Insurance?

The modified whole life policy has many suitable candidates. This involves people who want to protect themselves, but have fewer resources to spare. It works well even for those who know that they will be able to access money later in life.

Modified whole life plans are helpful for persons who do not have much to spend on a whole life insurance policy today, but will have in the nearest future. The kind of person requiring this kind of cover often needs life insurance for their whole life.

Someone who has an increasing job and will make more money over time, somebody who does not need help for children in the future and expenditure is going to decrease, or a family who only has one income earner but may have another in the nearest future can be examples of individuals that might be candidates for a modified whole life insurance program.

It may also make sense for business reasons such as key individuals or buy-selling insurance. This is particularly true when a company is young and does not have the operating budget after many more years.

Another explanation why a modified whole life coverage is beneficial for budget members is that it is necessary to receive insurance coverage while an individual is young. When individuals are healthy, they both ensure that they are insurable in the future and that the premium costs over time are as minimal as possible, since a younger person most likely achieves an entity’s superior health status.

Weigh All Options Before Considering Modified Whole Life

A modified product offers individuals an inexpensive way of achieving these objectives and provides their beneficiaries with the same degree of protection.

However, we should only consider modified whole life insurance when we are completely certain that NO complete coverage option is available. I hope you’ve worked with a broker who weighed all of your choices before proposing a modified whole life insurance plan! Unfortunately, there is a big risk that you will get a short deal if you dealt with a captivating agent instead.

Health Conditions That Suit Modified Whole Life Insurance

While many conditions of health are adapted to \modified whole life policies, I will concentrate on the most common conditions of health.

1. Cognitive Memory Disorders

In most cases, cognitive memory disorders are approved with modified whole life insurance policies because no first-day full coverage would be permitted with any cognitive memory disorder.

2. Kidney Failure

In particular, if you are in dialysis, most insurance firms won’t offer you complete coverage for the first day. You have modified whole life insurance as an alternative or a type of problem coverage guaranteed.

3. Supplemental Oxygen Usage

You must look for no-question life insurance while using an oxygen tank to supplement your breathing as no company will want to cover you from day one.

4. Terminally Ill

Modified whole life coverage is most useful if you are terminally infected, in a hospital, or confined to your wheelchair.

Is Modified Whole Life a Good Product?

There are many reasons why Modified Whole Life Insurance is a smart decision:

• Modified Whole Life coverage is equally as important to the whole life policy
• Death benefit guaranteed 
• Accumulation of tax-deferred f cash value
• The right to borrow cash value on a tax-free basis
• The ability to earn dividends as declared by the firm.

Something that you must always remember is that the younger you are, the lower your premiums are, so it makes sense for you to purchase when you are younger. The premiums are set by the use of actuarial tables, because the longer the probability that you live, the more premium you pay.

Often, your health is probably excellent when you are young; this may not be necessary to wait until you have the revenue to support a modified whole life coverage program.

There is a lot of rivalry amongst life insurance companies, so many different types of deals overwhelm the mailboxes every day. With their low prices, guaranteed coverage, level benefits for insurance terms, and much more, these deals look enticing.

Nevertheless, please ask a licensed agency to help you to search for these good offers. I would be very cautious about any of these policies as very little are really what they represent in your mailbox.

Since the first years are smaller, Modified Whole Life not only gives you a break as you struggle to make a respectable salary, the dollars you pay when the premium upward changes are soft dollars.

This kind of policy has many facets as a winning policy. In early policy years, a lower premium could influence the amount of cash, but it is negligible when you consider the “time value money.”

Modified Whole Life vs. Graded Premium Life Insurance

Graded premiums are commonly acquired as a final remedy for individuals with severe health conditions who do not / cannot have traditional coverage. In comparison to traditional policies, these policies appear to be very costly. Some individuals cannot afford life insurance, at least at the standard premium, due to health conditions. Often the Graded benefit life insurance is the option for these individuals.

The graded whole life insurance may be a marvelous thing if you know that you will live for at least two years or more but not as much for those who may die during that period, The only thing paid as a benefit is usually the percentage specified during the first year, a little more during the second, or maybe only the premiums, interest and dividends are paid.

Graded Whole Life plans typically require no exams, testing, or questionnaire which means they have another advantage, and these are usually the ones you will hear that insurer cannot cancel your coverage at any time.

In essence, a graded whole life plan provides an option to either paying higher premiums due to health conditions or not getting life insurance. The advantage, however, is obvious, if you have a disease that could lead to your death in the first two years, you may want to make sure that is right.

But even when the other route is not covered, it may be the only real choice for others by putting money into a savings account.

Do Your Due Diligence

If you are looking at an insurance package for a Graded Whole Life, read all documents to ensure every bit of fine print is known – many of these policy variations are very significant. No specification is available on how they are run and often these are bought in units.

These units will decrease in value over time or may not, so you want to be sure of something else. As always, it’s the easiest way to know if your graded whole life insurance is for you, or you should find a way to cover yourself, despite your health problems.

Often the cost is equivalent, so don’t instantly think you’re going to need a graded package. Sometimes graded life insurance will cost you more than it pays for. Fortunately, if you live long and prosperous, that will happen. In that case, your premiums can surpass your heirs’ death benefit.

If you could qualify for a standard life insurance plan but did not know it, you would also overpay for a graded policy. It doesn’t mean that you cannot enroll in life-insurance that pays a death payout on day one simply because your medical condition preexists.

It is worth testing other forms of coverage before choosing graded life insurance. That way you can see if you qualify and can also save money. When faced with a serious illness, that’s not to say that you’re left out with life insurance. You may have received a dishonest letter that denies your policy. However, this is not the end of the road. You can still consider an alternative known as graded whole life insurance.

Graded life insurance takes about two years to wait for a life insurance payout. If you pass away, your heirs also receive some compensation during this period. You’re going to get the amount you paid in interest premiums.

Your heirs are given the full benefit of death, whether you die through natural or injuries if you live past the two or even three years of wait.

Who are Good Candidates for Graded Premium Insurance?

Graded whole life policy plans are for people with advanced medical conditions but are not life-threatening instantly.

They are mostly for people over 50 years old with health problems, although younger people may also be disqualified from other life insurer requirements, such as:

• Diabetes
• Parkinson’s disease
• Alzheimer’s
• Coronary artery disease
• Incapacitation
• Cancer

Pros of a Graded Whole Life Insurance Policy  

You can wonder why you should spend two or three years in a life insurance plan without payment. But there are also upsides to these policies:

• The ordeal of a medical examination is normally saved for you. This is a bonus, as the examination could have revealed that your rates were going to rise significantly.
• Approval is quicker than the usual full underwriting phase 
• Premiums would be the same over the period, which is additional for those with a fixed income. It is also great for breadwinners since in later years they normally have higher payments. 
• There is no waiting time if death is accidental.

Cons of Graded Whole Life Insurance Policies

Graded plans are a high risk in the eyes of an insurer. The firms advertise to customers who are denied for chronic conditions by most insurance companies.

This is why the insurance company’s financial risk is reduced by a delayed benefit span.

In comparison to other policies, companies often charge higher prices for graded policies. Depending on your age and coverage, you will pay up to $200 a month, even though policies vary considerably.

On the bright side, most insurers would allow you to adjust your coverage. You could reduce the death allowance, so the premium would lower to fit your budget.

Mistakes to Avoid  

The conditions of a graded life insurance contract often seem too good to be true. If you surpass the two-year threshold, the business pays back your premiums plus interest. There’s a total policy payout after two years. How do you make money from the insurer?

One response is that life insurance firms make more money than the premiums themselves from the investments. Life insurance firms made $145 billion in 2018 from premium, while investments made large $187 billion. Unfortunately for the user the comparatively high cost cannot be afforded, so they just stop paying and many people let it go, so the insurers make money on graded policies. That means that the policyholder lost his insurance cover, and only the cash surrender value of the policy is returned.

This is generally much lower than the premiums charged or the death benefit earned by their heirs. Health conditions depend on the carrier, but Parkinson’s disease, systemic lupus, liver disease, or COPD may put your client in a graded plan for example.

This is normally the case; you have to consult with the carrier of your choice. As an example, Equitable would not give the graded policy a full mortality advantage until the fourth year.

If non-accidental death happens within two years, only a fraction of the death benefit will be paid by the policy.

For instance:

1. When a death occurs in the first year, maybe only 30% of the death benefit is paid.

2. In the case of non-accidental death, 70 percent of the death benefit is accounted for in year two.

3. Death pays 100% of the death benefit in year three or later.

Examples of “Accidental Death”

In case you were wondering, here are some examples of accidental death in insurance language:

• Car accident
• Falls
• Poisoning
• Drowning
• Fire-related death
• Suffocation
• Firearms (excludes acts of war and suicide)
• Industrial accidents
• General accidents (medical professional mistakes, falling objects, air transport injury, etc.)

Examples of “Non-Accidental Death”

“Non-accidental deaths” include:

• Illnesses
• Old age
• Suicide

In general, a graded life insurance plan is close to no risk for you when you have a progressive disease, are disabled, or stay in a nursing home. Your heirs receive the payment of your interest premium or receive a death benefit that is greater than what you have paid.

Final Thoughts on Modified Whole Life

Both graded and modified whole life insurance can be good options for certain situations. In addition, they are also designed for seniors. Often, they come with a simplified and trouble-free application process. Typically, we see simplified issues for Final Expense Insurance.

In summary, shopping for life insurance policy can be confusing, so getting help from a professional is always a good idea. The application process can also be frustrating and difficult, especially if your medical record is not so perfect. This is because by issuing plans to individuals who are older or those with health conditions, insurance providers assume substantial responsibility. In addition, some companies also refuse to cover people with certain specific problems.  For example, Cardiac bypass is one such issue, but that does not mean that a life insurance policy can’t be bought.

As a result, we recommend that you consult with an unbiased agent to compare your choices taking into account both price and profit periods. This is the most effective and comfortable way to shop life insurance companies.

To answer any questions, an independent agent will shop on your behalf around a dozen or more carriers and help you make a good decision based on your unique needs. Find an agent here.

The post Modified Whole Life – What is it & Who Needs it appeared first on Medicare Life Health.

What are the average funeral costs in the United States? The cost of a funeral depends greatly on the options you or your loved one choose.

This article includes a helpful end of life planning list with average funeral costs detailed for your budgeting – including caskets, facilities and burial plots.

The only true fact of life is that death is certain. With death comes a lot of questions, and a lot of planning. It is never too soon to financially prepare for the costs of funerals. You might be wondering what options exists and what the costs are of those options.

Average Funeral Costs Summary Chart

How Much Does a Funeral Cost? Here is a Detailed Breakdown

Body Options

Burial vs. Cremation & Also Body Donation

There are three options when it comes to post life care. The two most popular in the United States are burial and cremation. The other option is body donation.  Body donation is gaining popularity because of its low cost and the idea that the person is giving back to the world one final time through donating to science and medicine.

You may have an idea in your head about what your final wishes will entail, but you should still try to understand each option and their financial obligations, so you are financially prepared. It is never to early to prepare for the inevitable.

Average Cost of Cremation

Cremation isn’t free, but it is cheaper than burial. The average cost of cremation with a viewing in the United States, is $5,150, according to the National Funeral Directors Association (NFDA).  The bulk of the fee for cremation is the service fees charged by the funeral home. These fees cover the labor the funeral director and basic services.

Average Viewing Costs with Cremated Bodies

Viewing costs include the rental of the funeral home or other venue and memorial service. A viewing is a great way for family and friends to say their final goodbye to their loved one.

You can choose for the viewing to occur either before or after the cremation. Choosing to do a viewing before the cremation can result in some extra costs such as embalming and rental casket costs.

Embalming is not necessary for cremation, but many choose to include embalming if they have an open casket viewing before the cremation. The cost for embalming averaged $750 in 2019 according to NFDA.

Because a casket is not necessary for cremation, many choose to rent a nice casket for the viewing. The average rental casket cost was around $995. Flowers, and displays including photos may also increase the costs of the viewing.

Cremation Casket Rental Costs

The purchase of a casket is not necessary. However, you will be required to purchase a cremation container. A cremation casket can be purchased for around $1,200. This a traditional looking wooden casket that is burned with the remains. The alternative option would be a cremation container, which is a wooden box that isn’t lined, and typically very cheaply made. The cost of a cremation container is around $150.

When considering whether to go with a casket or a cremation container, it’s really personal preference and beliefs. Some believe there is more comfort and dignity in using a lined casket, whereas others believe the box is not the final resting place, so spending extra money on it is unnecessary.

Average Cost of an Urn

Next to consider, cremation results in the family being given back the remains. Many people decide to keep the remains in a special place, called an urn. The funeral home only has to supply a basic box for the remains.

As a result, most people choose to purchase an urn, which can cost several hundred dollars. Personalized urns that use high quality materials may even cost thousands of dollars.

Funeral & Scattering Travel Costs

In addition, if you plan on scattering ashes in a special place, you will want to consider the cost of travel.

Travel may not just be for one person either, sometimes this act is basically a small ceremony of its own and may require travel for several people. If you’re planning your own final wishes and are not wanting your loved ones to pay any costs for your funeral, you may want to consider how much it would cost for them to travel.

For example, if you want your ashes scattered in the ocean, but all of your loved ones live in the middle the United States, you will want to include the cost for them to take off work and travel so they can be there for your final wish.

Other Cremation Costs

Furthermore, funeral homes may charge other fees – including a transportation fee.

• The transportation fee is charged for picking up the remains from the hospital or morgue and transporting it back to the funeral home.
• The funeral home may charge you a cremation fee if it uses a third party for the cremation.
• There may also be body preparation fees for clothing changes, make up, hair, or anything else that needs to be done to do the body in order to proceed with the visitation and cremation.

What Else Can Be Done with Cremation Remains?

Finally, cremation remains can be used in a lot of different ways. Some people may keep them in a urn, others may choose to scatter them in a special location. There are other options beyond that though.

• You can create jewelry out of cremation remains. For example, several businesses can use remains to create lab grown diamonds.
• You can also purchase a biodegradable urn to grow a tree out of the ashes.
• In addition, you can have them put into fireworks or ammo.
• Finally, there are a lot of companies that use ashes to make products, such as vinyl records, glass artwork, and stuffed animals.

Average Cost of a Burial

Burials come with the most expenses. However, planning for a burial ahead of time can save everyone a lot of stress associated with the cost of a burial.

According the NFDA the average cost of a funeral with a viewing and burial was $7,640, and this didn’t include the cost of the cemetery plot or the vault.

Average Cost of Burial Space

Not all burial spaces are equal. The cost for a plot can range from a couple of hundred in a rural area, to over $10,000 in an area with less green space to bury people.

What is a Mausoleum and What is the Average Cost?

Moreover, choosing a mausoleum as an option, will result in a much higher cost. A mausoleum is an enclosed where caskets are kept in crypts. They are an above ground burial option and typically have benches or a space for people to visit.

Average Cost of a Burial Plot

In-ground plots can be cheaper, but they can also be costly. It just depends on the location. Purchasing burial space as soon as possible can ensure you have a spot and protect you from the cost of inflation.

When choosing a burial space, the size of the space matters. Some people only purchase single plots, while others purchase double plots so they can rest next to their spouse. They may also purchase a family plot. The more space you take up, the more money it will cost.

Finally, in many states though, you can create your own family cemetery on family land, following state and local laws of course. Being buried in a family cemetery can significantly reduce the cost of a burial funeral.

Average Cost of a Casket

A metal casket cost on average $2,500. This cost can increase substantially depending on the quality and design of the casket. If you opt for a basic casket, the cost could be around $1,000.

The funeral home typically sells caskets, but you can always purchase a casket from another source to save yourself money. The Funeral home has to use the casket you provide.

You also don’t need a casket at all. It is “green” burials are becoming more popular. It is a burial that focuses on natural decomposition and limiting pollution into the Earth. The option to not use a casket exist. However, if you purchased a plot on private property, that cemetery may have its own rules. It is important to fully understand the rules for the location of the plot.

Average Viewing Costs

The Viewing portion of the funeral can incur several costs. The cost for the use of the facilities for viewing averaged $425.

The cost for body preparation averaged $255. Body preparation for a visitation includes sewing and gluing specific parts of the body to create a natural sleeping look. It also includes make-up and hair styling. The other cost will be embalming.

The Average Cost of Embalming

Embalming is not mandatory, even for burials. However, many people decide on embalming because it slows the rate of decay, allowing families to have an open casket viewing and funeral with the body looking as close to living as possible. The cost for embalming can average $750.

If you’re interested in a green burial, you may choose to forego embalming or find a funeral home and embalms using Earth friendly essential oils. The Green Burial Council can answer a lot of questions regarding green burials.

Cemetery Headstone Costs

Headstones, monuments, grave markers, whatever you call them, they are part of the price tag for burial funerals. They are commonly done in granite, but the material used does affect cost.

A small flat grave marker starts at $1,000 on monument.com, while upright headstones start at $1,200. What you decide to add to the headstone can also increase the cost. The cemetery may have rules about headstones.

In addition, you will want to make sure the headstone you purchase follows the cemetery’s rules because if it doesn’t, you might be liable for the costs associated with getting a stone that is in regulation.

Hearse Costs

The use of the funeral home’s hearse is not free. You will be charged for the hearse to transport the casket from the funeral home to the location of the funeral and then to the cemetery. The average cost for the use of a hearse in 2019 was $340.

If you use the service car or van for the funeral service, it could also cost you money. The average cost for the use of the funeral home’s service vehicle was $150 in 2019.

Open and Closing of Plot Fees

The other fee you will incur with a burial is the opening and closing of the plot. Digging up the plot and then refilling it usually requires the use of specific machinery, such as an excavator.

This cost could be included in your plot purchase, but it could also be separate fee due upon opening/closing of the plot.

Likewise, opting for a crypt in a mausoleum doesn’t get rid of this cost either. Opening the crypt can cost money as well. When searching for a cemetery be sure to ask them of the costs that will come up when it is time to use the plot.

Non-Traditional Burials

Traditionally, in the United States, burials occur with the body in a casket, in a cemetery. This is not the only form of burial though.

• Green Burials in which the body is placed naturally in the earth to allow for natural decomposition is becoming more popular.
• There is also the option for an ocean burial. Burials at sea are legal, and must follow certain guidelines, such as the burial must take place more than 3 nautical miles from a shore. More information on the legality of ocean burials can be found on the Environmental Protection Agency website.

Body Donation

A Non-Traditional, But Helpful, Low Cost Option.

Body donation is typically low cost or completely free of costs. There maybe stipulations on whether a body is accepted. You can reach to several programs in your area to find one that best fits your needs and beliefs. Typically these programs are ran by universities, but there may also be private organizations in your area.

Body Farms

Body Farms are often ran by Anthropology departments at universities. You can research your local or closest university to see if they have a Body Farm.

In these cases, the cost of body donation is completely free. They may charge a travel fee if they have to pick up the remains from a specific distance. You may still need to contact a funeral home to pick up the remains until the organization that runs the Body Farm can make arrangements to transfer the remains to their land.

What exactly happens on a Body Farm?

Well, they put the body in different environments to study the decay process and develop new ways to make identifications on bodies. It can seem like a less than peaceful ending, but the scientific advancements made because of Body Farms is incredible! It is a great way to keep helping science move forward after death.

Whole Body Donation

Medical schools use donated bodies to help students study medicine and perfect techniques they need to become incredible doctors.

Body donation to these programs is free of cost. If you live near a medical school, you can contact the university to find out if they have a body donation program, and whether there are any costs associated with the program.

Typically, it is a cost-free option, but occasionally you may need to cover the cost of transportation. However, the program usually covers cremation of the remains after the body has been used to it’s fullest extent.

There are other programs as well, such as Medcure, which services 45 states and is a cost free option. Medcure covers transportation costs, the cost of the death certificate, and the cost of cremation. The program you choose may also offer confirmation on how the body was used. This can give families a sense of pride knowing their loved one was part of research that is helping people.

How to Pay for Funeral Costs

Here are the most used ways of paying for funeral costs:

1. Final Expense Insurance – Also known as funeral insurance or burial insurance. This is a whole life insurance plan that gives you a lump-sum of cash when you pass to help you pay for your end of life expenses.
   • Read more about these plans and how to use them here.
2. Prepaid Plans – Plans made with service providers before you pass that cover the costs at a specific facility or with a specific company.
3. Savings / Retirement Funds – Paying with cash.

NOTE: Long Term Care Insurance – Unless you have a special rider on your long-term care insurance, it will not pay for your final expenses.

Average Funeral Costs Summary

As you can see, the average funeral costs in the United States vary significantly depending on the options you choose. Having a plan and a budget set in place early will help you to save money in the long run.

Final Expense Insurance will help you with making sure these costs are covered for your loved ones after you are gone.

The post Average Funeral Costs For End of Life Planning appeared first on Medicare Life Health.

Which funeral insurance companies and policies are the best? You have a lot of choices when it comes to funeral insurance (also known as burial insurance or final expense insurance.) We are here to help make sense of your options and choose the best funeral insurance policy for you.

Funeral Insurance Basics

• Funeral insurance is a small, whole life insurance policy that can cover end of life expenses. It is also referred to as final expense or burial insurance.

• When you die, the value of the policy is paid to your family members in cash, tax-free.

• They can use this money for anything; however, most policies are purchased for the purpose of paying for funerals, burials and any other final expenses.

The Benefits of Funeral Life Insurance

The benefits of burial or funeral insurance include:

• A quick payout of cash in the event of your death.
• Flexibility to use the payout benefit however your beneficiaries like.
• A small emergency fund. (The policy will eventually build up a cash value that you can access.)
• Easy applications and broader approval than other forms of life insurance. (No medical exams, guaranteed coverage options available).
• Premiums stay level. (Your cost-per-month will not increase).
• The face value (payout) will not decrease over time.

Competitive Carriers / Insurance Companies

The best funeral insurance policy for you will depend on your needs and purchasing circumstances. Often, rates are based on simple health underwriting, gender and age. Some companies are more competitive for some people depending on their ratings.

Some of our recommended insurance companies include:

• Mutual of Omaha
• Foresters
• Transamerica
• Royal Neighbors

Funeral Insurance Cost

The cost of your funeral / final expense policy will depend on how much cash benefit you will need when you die and your underwriting situation when you purchase it. Your age is a primary factor on how much your policy will cost.

Frequently Asked Questions – FAQ’s

Is the Policy Payout Taxed?

Funeral / Burial Insurance is tax-free. Just like any other life insurance policy (that follows the rules set by the U.S. government), you do not have to pay taxes on the money paid out by your policy.

What is the Difference Between Insurance vs Prepaid Plans?

Final expense / burial insurance is different than buying a prepaid funeral plan, burial plot or cremation service. You can directly prepay for end of life services at various service providers, funeral homes and burial locations.

Your insurance cash payout is not prepaying for any vendors or locations. It is just a lump sum paid to your family (or beneficiaries) for them to use as they wish.

You can use a prepay plan in addition to funding a life insurance plan, or as a stand-alone option. Many people like the freedom of their family being able to use the life insurance money as they wish. Most often, the circumstances and associated costs of your death are unpredictable. You can alleviate stress for your family by giving them flexibility in using your policy funds.

Can I Buy Funeral Insurance Online?

Yes, the simplified nature of these life insurance applications do afford the opportunity to purchase a policy online in some instances. However, since there are many options available from multiple companies, we suggest you talk to an independent insurance agent.

Independent insurance agents will often represent multiple companies and can listen to your needs and direct you to a company that will have the best plan for your unique needs.

Find an agent near you here.

What Does Funeral Insurance Cover?

These policies are typically purchased to cover the following:

• Funeral Expenses
• Burial Expenses
• Caskets
• Rental Fees
• End of Life Medical Fees
• Pay off small debts

However, as mentioned before, this money does not have to be used for any particular thing. Your beneficiaries are provided a lump sum of cash when you pass, and they have the right to use the money for whatever they may need.

The post Funeral Insurance: Best Rates, Reviews and Recommendations appeared first on Medicare Life Health.

This is your ultimate guide to burial insurance (also called final expense insurance or funeral insurance).

Burial insurance plays a unique role in your financial planning. Many people buy these policies to help their loved ones cover end of life expenses for themselves.

Two Reasons for Having End of Life Insurance

• Sometimes, people buy end of life insurance because they do not have cash on hand to cover funeral expenses, and they do not want their passing to put a burden on their family.
  
• Other times, they might have cash on hand, but still want to provide their family with accessible funds, that is not in stock form, to pay for their funeral/burial. They do this in order to preserve their cash/investments to pass on to their family.

An Example of How to Use a Burial / Final Expense Policy

A couple years ago, my family lost my father in law. He was survived by his wife of 49 years. However, he had decided a few years back to purchase a final expense policy to cover his funeral and burial expenses in the event of him passing. Although he had plenty of investments that could have covered his expenses, he knew it would be easier for everyone just to have access to quick cash if needed.

My father in law was right. With his policy, we were able to “assign” funds from the policy directly to the funeral home and to the place we purchased the casket. That was much easier than freeing up invested retirement funds. Moreover, his widow didn’t have to worry about end of life expenses eating into her cash savings.

Do I Need Burial Insurance / Funeral Insurance?

From my story above, we can see that:

• In this instance, the final expense insurance policy wasn’t completely necessary. However, it was convenient, made everyone feel secure, and was generous.

• However, in other instances, burial insurance could be completely necessary for funeral/burial expenses. For example, if the person it is bought for lives on a fixed income, check-to-check, with no significant savings, then this policy could be a life saver for the survivors.

Can I just save for end of life expenses?

Yes, saving up for funeral expenses is one option, but sometimes this saving just doesn’t happen. In addition, death is often accidental or unexpected, and you might not have enough time to save up what you need.

Funerals and burials can lead to debt if your loved ones are not prepared to cover these costs. As a result, you will need a solid plan to cover these costs, and funeral / burial insurance is often your most secure option.

Let’s look a little deeper into what is final expense insurance and where / how to find a policy.

Final Expense / Burial Insurance Cost

So, what does final expense insurance cost? First, these polices are whole life policies, which means that it is a “permanent policy” you will fund and keep until you pass.

Second, burial insurance policies usually have “face values” (payouts) between $5,000 and $25,000. Since they are whole life, they will gain a cash value as you pay your premiums, and they will pay your beneficiaries their face value in cash when you die.

Your rates (premiums) will depend on:

• What company you choose.
• Your age and other underwriting criteria.
• How big of a face value (payout) you choose.

Applying for and Getting Final Expense Insurance Quotes

Insurance companies made burial insurance accessible to many types of people. Moreover, people that would be turned down by other forms of life insurance (or turned off by expensive premiums), can often find funeral policies that fit their needs.

Some funeral / burial insurance policies offer:

• Guaranteed coverage for certain age groups
• Ability to skip medical exams
• Affordable premiums that don’t increase
• Cash value in the policy to access in an emergency
• No wait periods to start a policy

So, how can you get burial insurance quotes?

I suggest talking to an independent insurance agent to compare quotes for any type of life insurance policy. They will be able to discuss your unique needs and match you with the best product for you.

More about Independent Agents

• Want to know why you should use an independent insurance agent? Read this.

• In addition, this article on what makes a good insurance agent, will help you to make sure your agent is a good fit for you.

Best Final Expense / Burial Insurance Companies

What is the best burial insurance company (aka final expense insurance carrier)? Depending on where you live, you will have multiple different options for insurance companies to choose from.

Some of the biggest players in funeral insurance are:

• Mutual of Omaha
• AIG
• Foresters
• AARP
• AAA
• Royal Neighbors of America
• Transamerica

We will have reviews of each company coming soon.

Conclusions

Is final expense life insurance worth it?

Yes, funeral insurance / burial insurance is worth buying for those you love in the event of your death. It provides:

• Quickly accessible funds to pay for end of life expenses
• A potential way to build a small emergency fund in cash value
• Peace of mind, that your loved ones will not be stressed about your end of life expenses in the event of your death.

Finally, if you need to talk to someone about a policy, please contact us here and we will find an agent to help you.

The post Burial Insurance for Seniors Ultimate Buying Guide appeared first on Medicare Life Health.

Final expense insurance (also known as burial insurance or funeral insurance) is an insurance policy that provides cash to cover end of life expenses such as funeral and burial costs.

They are typically smaller face values (the amount of payout money). In addition, insurance companies often structure them as whole life policies.

Introduction

My father-in-law passed away two years ago. His passing was my first experience in how important Final Expense Insurance is. It made everyone’s lives easier that he had a policy in place to cover end of life expenses.

Up until a few years ago, my father-in-law had a larger term policy on himself and his wife. However, they decided to cancel that policy since they were set financially for retirement. Fortunately, he had a good agent that set him up with a smaller Final Expense policy.

My in-laws did have enough in savings to cover a funeral. However, it was just so much easier not to have to worry about how to get access to that money. Their savings sat invested in mutual funds and stocks, which take a few extra steps to get to. Consequently, no one wanted to go through any more extra steps to get to it.

The insurance money was delivered easy enough. We did have to wait for the hospital to file a coroner’s report before we could get the money. However, in the meantime, we “assigned” the insurance money to the funeral home and burial services before we had it. The whole experience was positive and the final expense money was helpful.

What is Final Expense Life Insurance?

• Final expense policies are life insurance policies. Just like other types of life insurance, a final expense policy issued by an insurance company pays money to a designated beneficiary when the insured person dies.

• Final Expense policies are whole life policies. Since whole life premiums are usually more expensive than term premiums, the face value is usually a smaller amount.

• The purpose of these policies is to pay for end-of-life expenses. For example, you could use them for funeral costs, burial fees, and even medical bills.

• Of course, you can use the money for anything. It is just a cash payout.

How Much Final Expense Insurance Do I Need?

When you are deciding how much cash you need consider funeral costs, burial costs, end-of-life medical bills, and any other loose ends. According to Mutual of Omaha (opens in a new tab)” href=”https://www.mutualofomaha.com/advice/understand-how-life-insurance-works/whole-life-insurance-what-you-need-to-know” target=”_blank”>Mutual of Omaha, an average funeral costs about $7,000 to $10,000. Most people don’t have access to that sum in cash. Even those that do, might have other things they want to do with that cash.

Every insurance company prices premiums differently. Additionally, they all offer different face value amounts (i.e. the amount of money your beneficiary receives when you die). However, the usual amounts are anywhere from $2,000 to $40,000.

Alternatives to Final Expense Insurance

You could get confused as you look into the different options available for retirement and end of life planning. For example, there is Long-Term Care Insurance, Prepaid Funeral or Burial Plans, and other forms of life insurance. What can you use for what? Let’s look at a few options and what they are useful for, including…

1. Prepaid Plans
2. Long Term Care Insurance
3. Savings / Retirement Funds

1. Prepaid Funeral Plans

First, let’s look at prepaid plans. Prepaid plans are different from final expense insurance. These are contracts with specific funeral or burial providers that allow you to prepay for their products and services before you need them. In contrast, with a final expense policy…

Your insurance cash payout is not prepaying for any vendors or locations. It is just a lump sum paid to your family (or beneficiaries) for them to use as they wish.

You can use a prepay plan in addition to funding a life insurance plan, or as a stand-alone option. Many people like the freedom of their family being able to use the life insurance money as they wish. Most often, the circumstances and associated costs of your death are unpredictable. You can alleviate stress for your family by giving them flexibility in using your policy funds.

https://medicarelifehealth.com/funeral-insurance

2. Long Term Care Policies

Long Term Care Policies (LTC) are not life insurance policies, so they are not useful in paying for end of life costs. LTC is an insurance policy that helps you pay for assisted living and nursing care when you need it in a long-term capacity. However, these costs do not include what is needed after you pass.

On the other hand, people often ask…

Can I Use My Final Expense Policy for Long-Term Care (LTC) Costs?

Potentially, yes. Some Final Expense policies have accelerated death benefits for terminal illness or nursing home confinement. This means you can use the face value of the policy as cash to pay for these expenses. However, if your policy is only for $10,000, this will not get you far!

If you are looking to use insurance to cover long-term care (LTC) costs, a final expense policy is not the tool to use. Final Expense policies usually do not have a big enough face value, or accrue cash fast enough, to fund LTC. Look at funding an Indexed Universal Life (IUL) with a LTC/Critical Care Rider to help with this.

Additionally, you can get a Long Term Care Insurance Policy.

3. Savings and Retirement Funds for End of Life Expenses

Yes, you can use your savings and retirement investment funds for paying for end of life costs. Just note, that these need to be accessible to you when you need them to cover the bills. If the money is tied up in the stock market, you will need to account for the extra time and fees it will cost to free up that money.

Also, make sure that you are not relying on a pension or annuity that will expire once you pass. Some annuities have pay outs written into them when a annuitant dies, but some are done paying out completely with an end of life event.

Finally, know that often we have the best intentions for saving for retirement, but it doesn’t always work out the way we hope. If you think there might be a chance that you won’t be able to save enough, a funeral policy might be the tool you need to protect your family/friends.

Is Final Expense Life Insurance for Me?

To start, insurance companies created final expense policies for older adults (typically 45 years old +). If you are younger and reading this article, there are better options for you at this time in your life. Head over to our IUL page to learn about Indexed Universal Life, or think about term insurance.

As you get older, term insurance and other higher face value whole life policies get more expensive. In addition, insurance takes on a different importance as your debts dwindle and your savings rise. You can read more about insurance needs as you age in our article “Life Insurance in Retirement?”

Final Expense Life Insurance is a great solution for older adults that need to take care of their loved ones by leaving cash to cover their end of life expenses.

Reasons for Having Burial Insurance

What is your reason for having final expense insurance? Finding your why is an important part of the buying process for funeral insurance.

Sometimes, people buy end of life insurance because they do not have cash on hand to cover funeral expenses, and they do not want their passing to put a burden on their family.

Other times, they might have cash on hand, but still want to provide their family with accessible funds, that is not in stock form, to pay for their funeral/burial. They do this in order to preserve their cash/investments to pass on to their family.

https://medicarelifehealth.com/burial-insurance

What Insurance Companies Offer Funeral / Burial Insurance?

There are many insurance carriers that offer final expense insurance as a part of their whole life offerings. Here are a few of the larger companies that offer solid, competitive products:

• Mutual of Omaha
• AIG
• Transamerica
• Foresters
• AARP
• Royal Neighbors of America
• AAA

What to Look for in a Policy

The best funeral / burial insurance policies offer at least a few of the following benefits:

• Level premiums (meaning the cost does not increase)
• Affordable premium options
• Guaranteed coverage (for people between certain ages)
• Ability to skip medical exams (simplified or guaranteed issue in some cases)
• No wait periods
• Cash value build-up in the policy (for emergency access)

How Do I Get a Policy?

If you are ready to get a final expense policy, it is time to talk to an agent. She or he can help you in creating a solution that meets all your needs. Different companies have different options and riders, so it is a good idea to work with an expert to set your’s up right. It does not cost you anything extra.

• If you live in Nebraska or Iowa. You can give me (your writer, Carly Cummings) a call or email by clicking here.

• If you live anywhere else in the U.S., I still like you, but I am not licensed to work with you. Please give one of our directory agents a call who live in your area.

Conclusions

Final expense insurance is an important part of your retirement planning.

It is a good option for owning life insurance in retirement that can secure yourself and your loved ones for the seen and unseen future events.

As we have seen, sometimes, even if you have saved enough for your final expenses, and paid off your debts before you retire, you still may benefit from final expense insurance. Especially, if your money is tied up in stocks or retirement funds, and you need access to cash quickly.

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