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By David P. Staples
“What do you mean he didn’t have any life insurance? Who’s going to pay for his funeral and all the expenses that go with it? What are we supposed to do, take up a collection?” For those individuals or families without the ready financial resources to cope or who have not “prepaid their funeral,” this is an all too familiar question.
The national average for a traditional funeral ranges from $7,000-$10,000. Cremation, an option for many, can run anywhere from $1,500-$3,000, depending on location, funeral charges and distance to a crematory. This can be a true hardship for many families at a time when they have just lost a loved one. So what is a final expense/burial insurance policy?
A “final expense” policy is simply a small, life insurance policy designed to help families handle all the expenses associated with funeral costs as well as extra medical bills. Many senior citizens will buy one to leave a small legacy to children or grandchildren. The policies are usually whole life with premiums that do not go up, and the coverage does not expire, as opposed to term insurance plans that are temporary and cease at a specific age or at the end of the term period.
Many companies offer these plans to individuals in the 40-85 age bracket. The death benefit is paid directly to the beneficiary the insured selects, and is generally free of state and federal taxes. Policy face amounts can range anywhere from $1,000 to $40,000 or more. Rates are usually based on age, gender, whether or not you use tobacco products, and your health history over the last few years. Some policies require no health questions whatsoever, and there are no medical examinations required.
Senior citizens with health conditions like cancer, diabetes, COPD and heart disease often believe they cannot qualify for coverage or the cost will be too high. With 10,000 “baby boomers” turning 65 each day, the life insurance industry has changed to address that concern. Dozens of companies now offer low-cost policies for everyone; rates and restrictions are based on the “current” severity of one’s condition. Unfortunately, the multitude of mail-order life insurance offerings senior citizens see everyday in their mailboxes paints an incorrect picture. So many of these assume the population is ill and can qualify only for very expensive, restrictive policies. Many healthy senior citizens buy these without realizing what they are getting into.
Seniors need and deserve licensed professionals to analyze their final expense needs and to explain how coverage works. Brokers with many companies from which to choose are best, for indeed, they can shop around and find the most coverage for the least amount of cost. Our senior population on fixed incomes will appreciate that option.
For more information on the many types of policies available, contact David P. Staples, certified senior advisor, at Staples Insurance & Financial Services, 207-645-5275. (See ad in this issue.)
David P. Staples, CSA, Staples Insurance & Financial Services 211 White Schoolhouse Rd WILTON, MAINE 04294 OFFICE: 207-645-5275 Cell: 207-754-8163, Email: david@staplesseniorbenefits.com
Website: www.staplesseniorbenefits.com
