Insurance Solutions for Final Expense Planning
Final Expense or End of Life Planning is something that every person must do but is reluctant to do so. It requires each of us to face our mortality and prepare for the inevitable. A large part of the planning involves going to a funeral home and arranging one’s own funeral. Then you pay a portion up front or purchase a life insurance policy through the funeral home that is collaterally assigned to the funeral home. For many people that is an experience they would like to avoid. The good news is that there are planning solutions that can offer more flexibility.
There are life insurance solutions for final expenses that can be purchased without setting foot in a funeral home. These products offer guaranteed approval or simplified underwriting for death benefits as little as $1,000 up to $135,000. This provides flexibility by providing your beneficiary who you trust to take care of your final expenses a death benefit to carry out your wishes. You can plan with a funeral home and collaterally assign the death benefit. Each provider has a different approach in policy design and underwriting.
The single pay approach is where you pay a single premium into a life insurance policy and that buys the minimum death benefit (death benefits are from $2,500 to $135,000). The insurance company will pay the death benefit to the beneficiary in 24 hours after verifying the death from the funeral home. There are no health questions, and the underwriting is a guaranteed issue. This approach is for the individual who has the resources to pay final expenses but is concerned about their beneficiary who is responsible for handling their final expenses waiting for a death certificate to receive the proceeds to pay their final expenses. The policy death benefit can be assigned to a funeral home too. The issue ages are 0 to 90.
The guaranteed issue approach allows you to purchase $1,000 to $25,000 of life insurance without answering any health questions. Premiums are paid for life and based on the age of the insured. The issue ages are 18 to 80. If the insured were to pass away within two years no death benefit will be paid or a reduced death benefit will be paid. This depends on the insurance company. This approach is for the individual who does not have the resources for final expenses and is not insurable for traditional life insurance. The policy death benefit can be assigned to a funeral home too. Claims are paid with receipt of claim forms and a death certificate.
The simplified issue approach allows you to purchase $1,000 to $50,000 (depending on age) of life insurance by answering health and lifestyle questions. The insurance carrier will pull a medical information bureau report, prescription database report, driving records and consumer database report. Premiums are paid for 10 years or life and are based on the age of the insured. The issue ages are 18 to 80. This approach is for the individual who does not have the resources for final expenses. The policy death benefit can be assigned to a funeral home too. Claims are paid with receipt of claim forms and a death certificate.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through WCG Wealth Advisors, LLC a Registered Investment Advisor. The Wealth Consulting Group and WCG Wealth Advisors, LLC are separate entities from LPL Financial.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
