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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
Life Insurance that Cost Less for Business Owners
The only things that are certain in life are death and taxes. Still, most people are more comfortable confronting their tax burdens than talking about their own mortality. Planning for expenses related to advanced age and death are worth it however. After all, the accumulated lifetime financial debt of an individual does not just disappear because of death. The legal responsibility to pay down your personal debts will always outlive your own death.
Posthumous financial debt responsibilities ultimately become the burden of your surviving relatives, beneficiaries and/or estate caretakers. This problem is much worse than most people realize. Well over 73% of people die in massive debt. Most people die while owing over $61,500 in debts on the average. However, buying a good final expense insurance plan can help avert financial debt pitfalls before death.
Like any good insurance policy, they require pre-planning, budgeting and a willingness to contemplate post-death financing. There are many companies that offer good final expense policies. Before we list some, as well as how to find them, let’s explain final expense insurance in more detail.
What is Final Expense Life Insurance?
Final expense life insurance is a variation of a whole life or term life insurance. A final expense insurance policy is designed to cover the multitude of expenses that one will encounter in advanced age and before death. Such expenses may include, but are not limited to, medical expenses, mortgage payments, credit card debt and funeral expenses. Final expense insurance is sometimes referred to as burial insurance. Although they are essentially the same, burial insurance is a more bare-bones policy designed to cover burial related expenses.
These policies are designed mainly for people between the ages of 50 and 85 years old. Final expense insurance doesn’t require a medical exam for most policies, although you will be required to fill out a medical questionnaire. As long you don’t have any pre-existing medical conditions, you are all but guaranteed approval. The earlier that you apply for such insurance, the better your odds of being covered for medical conditions that may develop later in life.
Desired Qualities of a Final Expense Policy
The average funeral costs about $7,000 and up to $20,000. A good final expense insurance policy can be worth anywhere from $5,000 to $50,0000. Some policies can be worth as much as $100,000 or more. Most final expense insurance policies can be borrowed against its value, although that takes away from the overall policy value until the loan is paid back. Unlike burial insurance, final expense insurance also allows for the listing of beneficiaries.
Final expense insurance policies feature relatively affordable premiums that must be paid to keep the policy in force. The monthly premium for a final expense insurance policy can cost anywhere from a few dollars to over a hundred dollars a month. The benefits, overall values and conditions inherent in a final expense policy differs on a case by case basis.
How to Find the Best Coverage for Your Needs
You can apply online or ask for referrals from friends. You could even consult with various funeral homes, although they may just refer you to policy issuers that they preferably work with. Your best bet is to research issuers online, compare policy benefits and apply. You will have to submit basic information and answer a medical questionnaire.
After approval, which can take minutes, you may then consult with an insurance agent over the phone or in person. The agent will discuss with you your budget, finances, debt, current and/or future medical care needs and a multitude of relevant personal information. The conditions of your coverage, like overall policy value, benefits and premium amount, will then be calculated after such consultation.
You may have to repeat this process depending on the number of companies you research. To simplify the process, you could enlist the help of an insurance broker. An insurance agent represents a specific issuer. Insurance brokers represent multiple issuers and refer applicants to issuers who complement each applicant’s needs.
Companies with the Best Coverage Offers
Aetna, Assurity Life Insurance Company, Liberty Bankers Life and Mutual of Omaha issue policies to applicants between the ages of 40 to 89 with overall values between $2,000 and $50,000. AIG, American-Amicable, Americo, Baltimore Life, Forresters Financial and Gerber Life Insurance Company issue policies to applicants between the ages of 50 and 85 valued between $2,500 and $35.000. Fidelity Life, United Home Life Insurance Companies and Phoenix offer policies to applicants between the ages of 20 and 85 that can have an overall value between $10,000 and $150,000.
Do Your Research
To find the best final expense insurance coverage that suits your needs, be prepared to do research. Always shop and compare coverage terms and benefits. No two final expense insurance companies are alike. It takes effort, but you should do everything you can to prepare for your advanced age and post-death expenses. Death, just like taxes, is certain in life. So, why shouldn’t you prepare and plan for it?
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