If the cemetery, funeral home or memorial company does not place all pre-paid money into an independently monitored trust.If the cemetery, funeral home or memorial provider charges too much interest for pre-paying.When the cemetery, funeral home or memorial provider does not allow for pre-planning.For individuals, whose preference for burial, entombment, or cremation may change.For individuals who want to pre-plan but are not 100% certain that they will remain in the same city and state throughout their entire lives.Reasons for Purchasing a Final Expense Insurance Policy: An application can be made online and/or over the phone by either the proposed insured or any individual with insurable interest (spouse, children, durable health-care power of attorney). The face value, or death benefit, generally falls within a range of $5,000 to $30,000. Final expense insurance premium payments are set at a pre-specified level and will not increase over the term set forth by the policy coverage. Final expense insurance is a pre-planning tool that may either supplement or replace, the pre-planning and pre-paying options offered directly by the cemetery or funeral home.įinal expense insurance policies may not require an in-person medical exam and may be issued quickly, within hours or days. Purpose and Characteristics of Final Expense Insurance.Ī primary purpose of a final expense insurance policy is to reduce the financial burden placed on the next-of-kin when an individual passes. For example, assuming an interest rate of 8%, current costs will double every 9.01 years. The face value, or death benefit, of a final expense insurance policy, is usually based on the current cemetery, burial, funeral and memorial costs, a projected rate of cost increases (or rate of inflation), and the proposed insured life expectancy. A final expense policy does not lock-in or freeze the current final arrangement costs, therefore it is advisable to purchase a policy with a death benefit greater than current funeral costs in order to cover any future cost increases. Final expense insurance policies may either be issued as term-life-insurance or whole-life-insurance coverage.įinal expense insurance is designed to help ensure that there is enough money available to pay for the related cemetery, burial, funeral, and memorial costs at the time of need. Proceeds of the insurance policy paid to the beneficiary may be used for any purpose after a death. The face value, or death benefit, may be paid to either the stated policy beneficiary or directly to a cemetery or funeral home. Most notably, the proceeds of a final expense insurance policy are payable immediately after the death of the insured individual. However, there are noticeable and important distinctions between these types of insurance. It is common for the terms final expense insurance, burial insurance and funeral insurance to be used interchangeably. Funeral Associations and Industry Groupsįinal expense insurance is a type of life insurance policy used to pay for an individual's cemetery, burial, funeral, and/or memorial expenses.Cemetery Associations and Industry Groups.What is a VA Cemetery or Veterans Affairs Cemetery?.
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