Types of Final Expense
There are two types of final expense: simplified issue and guaranteed issue. They differ in costs, coverage, and qualifications.
Final expense plans help cover the costs of funeral services and burial or cremation, which can cost upward of $7,000 or $9,000 if your cemetery requires a vault. For help choosing a final expense plan type, consult Poarch Insurance.
Simplified Issue
These are the typical final expense policies designed for people with moderate health concerns and who could not qualify for a term life or other traditional life insurance policy.
Get Your Free Quote!
Qualifying for simplified issue.
Simplified issue final expense policies are the basic final expense policies. To qualify for these policies, you should be between the ages of 50-80 and have only mild to moderate health concerns. Most seniors in good health will qualify for a simplified issue final expense plan.
You will need to fill out a health questionnaire to apply for a simplified issue policy. The health questions will help the insurance company to determine your cost of insurance. The questions may include but are not limited to the following:
- Are you a smoker or a non-smoker?
- Do you have a history of abusing drugs or alcohol?
- Have you had cancer?
- Have you had a stroke?
- Have you had a heart attack?
- Do you have cardiovascular disease?
- Do you have diabetes?
- Do you have a history of depression or mental illness?
Simplified issue coverage.
With a simplified issue plan, you will be able to purchase between $5,000 and $50,000 worth of coverage, depending on the insurance company. Your beneficiaries can use this death benefit however they like. The higher the benefit amount, the higher the cost of your monthly premiums.
Simplified issue cost.
A healthy, 60-year-old male non-smoker can expect to pay an average of $45 each month for his final expense policy. These costs will not rise over time.
Guaranteed Issue
Guaranteed issue final expense insurance is for seniors with serious health conditions or a concerning medical history. These people would have difficulty purchasing a term life insurance policy or being accepted for any other type of life insurance. People can expect to pay more for this type of policy.
Qualifying for guaranteed issue.
Guaranteed issue final expense plans require few to no health questions. They are intended to help even the most ill people acquire a small level of coverage.
Guaranteed issue coverage.
These policies have a lower death benefit amount because the policyholders are more difficult to insure. These benefits are usually between $5,000 and $25,000. In most cases, there is a waiting period of around two years. If the policyholder dies during those two years, the beneficiaries will not receive the death benefit but instead receive the amount paid in premiums, with interest. After those two years, the beneficiaries will receive the full benefit.
Guaranteed issue cost.
A healthy, 60-year-old male non-smoker can expect to pay an average of around $70 each month for his final expense policy. These costs will not rise over time.