What makes funeral insurance unique?
One of the main features that makes burial insurance stand out from other life insurance policies is its lenient underwriting. What is underwriting? It is the process used by life insurance companies to price risk. They analyze the risk associated with potential clients. They then figure out how much coverage a potential client needs vs. the likelihood of them claiming that policy. Using the results from this process they set the price of your policy’s premiums.
Since funeral insurance policies are designed to absorb high amounts risks, no health exams or questionnaires are usually required.
Small face value options
The death benefit is also known as the face value. It is the amount the insurance provider pays your beneficiaries when you pass away. Final expense insurance gives you the option of as little as $1,000 worth of death benefit. This is a great feature as you only buy what you need.
Easy to get
You don’t have to physically go to an office to get the final expense insurance policy. You just have to fill out an application. This can be done online, or from the comfort of your home, over a phone call or via email.
The death benefit for final expense insurance can be claimed by your beneficiaries regardless of where you died on earth.
Guaranteed life insurance option
Funeral insurance offers a guaranteed life insurance option as well. Though it comes with a 24 month waiting period and higher premium costs, it may be the right insurance for you. It may that your age or health does not let any other life insurance company insure you. It does not require any health questions or medical exams.
Funeral insurance is a type of whole life insurance, this means your premium cost and death benefit stay constant and last forever.
As mentioned before, burial insurance offers a cash value component. Cash value serve as a savings account. Though you may never want to touch it, life is uncertain and having cash value can be of use if you ever face a financial crisis.
Funeral insurance approvals can range from 12 minutes to 3 business days. This time may vary depending on the insurance company.
Lots of final expense insurance companies to choose from
If you are worried that no insurance provider will insure you because of your age or health, you need not worry. There will very likely be many funeral insurance companies willing to insure you. The insurance business is growing rapidly and every day they come up with new ways to fill the gaps in the market and attract more customers.
What are the different options in burial insurance?
Final expense insurance offers three different types of policies, some insurance companies only have two. These policies have different premium costs and eligibility depends on health.
The three policies are as follows:
Level Benefit Plan
Also known as the preferred benefit plan by some providers, it requires you to say no to all the health questions from the insurance company. If you are approved, you get coverage from the first day. This plan offers the lowest premiums the insurance provider can offer.
Graded Benefit plan
Graded plans offer partial coverage during the first two years of the policy. What partial coverage means is that if you pass away during the first year of the policy, your beneficiaries receive only 30% of the death benefit. If you pass away during the second year, your beneficiaries receive 70% of the death benefit. They will only get the full death benefit, if you pass away two years after the policy. The exact percentages of the death benefit for the first and second year may vary depending on the insurance provider. But most life insurance companies offer between 25% and 40% during the first year and between 50% and 75% during the second year.
This is the highest risk plan an insurance provider can offer. You can qualify for it if you have certain medical conditions, like heart attack, cancer, etc. But is has the condition that if you pass away within the first two years of the policy, your beneficiaries only receive the premium payments and some interest. They receive the full death benefit if you pass away after 2 years of the policy. This condition makes many people consider this plan completely worthless.