Guaranteed whole life insurance, burial insurance, final expense insurance – all three terms mean the same thing, a type of permanent life insurance. As you get old, it is advisable to opt for an insurance plan like John Hancock Final Expense Life Insurance so that your loved ones are protected as they will have access to funds to cover the funeral and other related expenses.
Did you know that even writing a final testament is not as effective as a final expense insurance policy? A final will may be interpreted incorrectly or is subject to dispute. Whatever the case, the settlement can be delayed even long after the funeral gets over. However, when you are covered with a final expense life insurance policy, the funeral expenses can be met from the funds disbursed almost immediately.
Final Expenses Are Subject To Inflation
With the cost of living rising steadily, the cost of funerals also keeps going up. Trends indicate a 30 to 40 percent increase in the last decade alone. The blame lies partly on the soaring overhead costs that haunt the funeral homes.
Not long ago, funeral services were a private affair held in the deceased person’s home. Social trends have forced funeral services to dedicated areas, thus adding to the cost.
Features of a Final Expense Life Insurance Policy
Approval is Guaranteed
The advantage of a policy like John Hancock Final Expense Life Insurance is that you can get yourself covered by this insurance irrespective of your health condition.
Medical Exam is not a Must
With the other types of life insurance, a medical exam is mandatory, and the insurance underwriters need to evaluate your mortality risk before approval can be granted. In the case of final expense life insurance, a medical exam is not a must. So much so that the risk evaluators don’t even ask for your medical records.
Factors that matter are your age and the amount you wish to be covered for. There’s a bonus too for non-smokers: you get to pay less. However, if you are a smoker, the premiums are higher, but you can still get a policy at a discounted price.
Premiums are Fixed and Do Not Change
Another major advantage with final expense life insurance is that once the policy is approved, the premium amount remains the same throughout. While the premium cost for a 50-year old is around $55 per month, it can go up to $190 for an 80-year old as the premium cost is directly proportional to the age.
For example, suppose you are a non-smoker pushing 70 and have just been diagnosed with a congestive heart failure condition. You can still purchase a final expense life insurance policy costing around $170 per month, despite what your doctors have to say about your health condition.
For smokers, the cost is slightly higher, as is the risk. The medical fraternity believes that congestive heart failure patients have an average life expectancy of up to three to five years. You are still leaving your loved ones enough money to take care of the funeral expenses. Speak to an expert like Gary P Cubeta to find out how you can still leave your loved ones enough money to take care of the funeral expenses.
Coverage for Life
Unlike a term life insurance policy, which has a fixed term, your John Hancock final expense life insurance is permanent and is valid until the date of death. If you are one of the lucky few who clock 95 and are still ticking, it’s good for you. You no longer have to pay the policy premiums, though your final expense life insurance is still valid until death.
What Does Graded Death Benefit Mean?
A final expense life insurance policy features a two-year graded death benefit, which means:
- Suppose you die (except accidental deaths) within two years of signing up for a final expense life insurance policy; your beneficiaries get whatever premium amount you paid, along with the prescribed interest.
- If death due to an accident occurs anywhere within two years of signing up for a final expense life insurance, your beneficiaries still get the full death benefit amount.
- In case two years have passed since you signed up for a final expense life insurance policy, your beneficiaries get the full death benefit amount, despite whatever caused your death.
What’s the Best Time to Buy Final Expense Life Insurance?
If you are younger than 50 and in good health, you may want to go for a traditional life insurance policy. You’ll get better coverage at lower premiums. However, if you are in the 50 to 80 age bracket, with or without health issues, final expense life insurance is your best bet. With final expense life insurance, health is of no consequence.
Summing it Up
While death is a certainty, the exact date and time are not. Life need not go as per your plans, and you’d hate to leave your loved ones in the lurch. If you’ve managed without traditional life insurance all along, it’s good for you. However, considering the welfare of your loved ones, it’s time you thought of final expense life insurance.