What is Final Expense Insurance?
Life insurance can be a critical step in the retirement planning process. Sometimes you’ll hear the term “final expense” insurance used. What are they really talking about? Well, it’s simple; it’s to deal with your burial and funeral costs. I often laugh when I remember an uncle of mine saying, “I don’t need it, just throw me in a box”. While that seemed comical at the time, it wasn’t until he actually passed away that we all realized he left my aunt with that final expense. It happened at a time when she was contemplating her future as a widow and found it difficult to be worried about finances. So final expense insurance should be a serious consideration when you’re planning your financial future.
No one ever wants to think about a funeral, let alone plan one. But by working out the details, in advance, it can ease the unpleasant details for a grieving loved one. According to the most recent data from the National Funeral Directors Association, a traditional funeral cost is around $6,600. When you add the cemetery services, including the gravesite, add another $3,000 to the total cost. It would be very unpleasant for a grieving spouse to have to pay almost $10,000 for a funeral when the issue can be solved very easily with life insurance coverage.
Typically, whole life insurance is the product of choice for this final expense. It’s named whole life because these policies usually cover you up to the age of 120 years old. Obviously, this is way past the average age that most people pass away, so you can be assured that the policy will be there for a loved one when you do pass.
Since the face amount of the policy can be low, between $10,000 and $20,000, the cost of what would normally be an expensive permanent policy is much more affordable. We have to face the fact that ritual of burying a loved one provides support and healing to the family. And don’t forget it can also bring peace of mind.
When you’re planning for retirement, if your goal is not to leverage additional money to your estate, at least take into consideration those final expenses and consider purchasing a whole life insurance policy.
About the author: Mark Yurkovic has been in the life insurance business for over 12 years, and holds CLTC, LUTCF, and CES designations. He enjoys building remote control boats, and playing instruments including the piano, guitar, banjo, and mandolin. Mark would love to discuss life insurance options and work towards finding the best policy fit for your family. You can contact Mark at 1-800-651-1953 or MYurkovic@Pivot.com.