By David P. Staples
Certified Senior Advisor
“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 financial resources or have not “prepaid their funeral,” this is an all too familiar question.
The national averages for a traditional funeral range from $7000-$10,000. Cremation, an option for many, can run anywhere from $1500-$3000, depending on location, funeral charges and the distance to a crematory. This can truly be a hardship for many families to deal with at a time when they have just lost a loved one. So what is a final expense/burial policy?
A Final Expense policy is, simply, a small life insurance policy designed to help families handle all the expenses associated with funeral costs, and extra medical bills. Many Seniors 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 $1000 to $40,000 or more. Rates are usually based on age, gender, whether you use tobacco products or not, and your health history over the last few years. Some policies require NO HEALTH QUESTIONS whatsoever and there are NO MEDICAL EXAMS required.
Seniors with health conditions like cancer, diabetes, COPD, and heart disease often believe they can not qualify for coverage, or that the cost will be too high. With 10,000 Baby Boomers turning 65 each day, the life insurance industry has changed to address that! Dozens of companies now offer LOW COST policies for everyone, and rates and restrictions are based on the “current” severity of one’s condition. Unfortunately, the multitude of mail-order life insurance offerings that senior citizens see every day in their mailboxes paint an incorrect picture. So many of these assume the population is ill, and can only qualify for very expensive, restrictive policies. In fact, many healthy seniors 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 that have many companies to choose from 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!
For more information on the many types of policies available contact David P. Staples CSA at Staples Insurance & Financial Services at 207-645-5275.
