Who Benefits From A Final Expense Life Insurance Policy?
Funerals are expensive events these days, and without an affordable term life insurance policy
, your beneficiaries may not be able to give you a fitting farewell. If you have a substantial term life policy or any other kind of traditional life insurance, a part of it should easily be able to cover your final expenses. If not, you may need to make final expense life insurance an important part of financial planning.
A final expense life insurance policy is also recommended if you cant qualify for traditional term life insurance because of factors such as ill health, lifestyle habits, or because you are deemed high risk or non-insurable by
life insurance companies. It is a permanent life insurance policy, and the face value is typically lower than traditional policies.
How does a final expense insurance policy help?
A final expense policy will cover funeral costs of the insured. In addition, a final expense policy death benefit can be used for paying off other things such as your unpaid mortgage and loan amounts, medical bills and legal fees. In fact, once the funeral expenses are paid for, it can be used to anything else. A final expenses policy has to be distinguished from a burial policy, because burial policies only cover burial expenses.
Who benefits from a final expense policy?
The final expense policy death benefit is used to pay for your final expenses. You are the direct beneficiary of a final expense policy because you can die honorably, without burdening your loved ones to pay for your final expenses. The beneficiary of the policy can retain any money leftover from this.
There are many options within death insurance policies, but final expense policies allow you to name a specific beneficiary. This is a good thing, because with other policies, once the policies are paid off, any leftover money is forfeited. In the case of burial insurance for instance, the undertaker is the beneficiary, and gets to keep any leftover funds after the burial. In the case of final expense policies, the beneficiary gets to keep any leftover funds from the policy after paying off your final expenses.
Who can you name as beneficiary for a final expense policy?
You can name anyone as beneficiary for your final expense policy. The important thing to remember is, they need to be instructed about the details of the policy so that the purpose of your policy is correctly fulfilled. Your beneficiary could be anyone - a sibling, parent, business partner, or a child. The advantage of naming a loved one as a beneficiary is that any money leftover from the fund, after paying off your final expenses, is theirs to keep.
Make final expenses a part of your financial planning
Since final expense policy face values are typically below $25,000, it should not be your only
life insurance policy, especially if you have dependants. A traditional policy is always a good idea. However, if a life insurance company deems you uninsurable, then some insurance is better than no insurance at all, and a final expense policy is a good plan B, because it doesnt require you to prove insurability.
The important factor in planning your finances right, is that you can rest easy knowing that even after you died, your financial obligations will never be a burden on your loved ones.
by: Denise Mancini
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