In the Yellowhammer State, there is a lot to be proud of.
From the beautiful scenery in the Gulf State Park on up to the wonderful college towns of Tuscaloosa and Auburn and then Muscle Shoals and all the history that comes with it.
Alabamans are blessed with a truly beautiful state.
One item that may not be the most thought about is what happens financially after someone’s death.
Funeral costs can range over a wide variety of price points depending on several factors.
The average traditional burial service in Alabama is $7,724.
The average traditional cremation service in AL is $6,172.
Not included in the price estimates:
- Cost of Headstone, Monument, or Marker
- Cemetery Property, Plot of Land, Columbarium, etc.
This is where funeral insurance products can help ease the burden in this emotional time.
Alabama Funeral Insurance
The average age of death in the state of Alabama is 72.7 for males and 78.1 for females.
Unfortunately, this is shorter than the national average.
- Males 76.1
- Females 81.1
In fact, according to the CDC, the leading causes of death in the state are:
- Heart Disease
- Chronic Lower Respiratory Disease
- Alzheimer’s Disease
- Kidney Disease
Everyone knows a family member, loved one, or friend who has dealt with one of these conditions. Everyone needs to have a plan for their end-of-life expenses because no one knows when their health might fail them.
7 Extremely Important Questions
1. How do polices work?
This product type is meant to be an affordable monthly payment and in return will pay a lump sum to your beneficiary once you have passed. Having a smaller face amount than traditional policies makes it more affordable while still awarding the same benefits.
Funeral policies are a type of Whole Life Insurance. Whole Life has three distinct policy benefits that are incorporated in the plan structure.
Coverage Lock– This means the coverage amount will never decrease and the plan will never expire. As long as you pay your monthly premiums every month you are covered for life.
Price Lock– The price will never increase. This is critical when we are talking about a plan that will be in effect for many years. There are other products on the market called “term” that could actually raise in price the older you get.
This plan type will never increase giving you peace of mind knowing the price you will be paying each month will be the same as the years go by.
Builds Cash Value- For every payment you make a portion will go into the cash value of the policy. Meaning once you have made enough payments you will have a cash value that you can borrow against if needed.
2. How much does this coverage cost?
This will vary from person to person and is determined by four primary factors.
- Coverage Amount
Depending on the formula between these factors your monthly price can fluctuate from $20 up to several hundred dollars per month.
3. What does this product cover?
There are no rules or regulations that dictate what the payout has to be used for. There is however a typical list of items that beneficiaries use the money for following the passing of the insured.
- Memorial/Celebration of Life
- Remaining Balance on a mortgage
- Credit Cards
- Medical Bills
- Post mortem expenses
- Legal Expenses
- Remaining Car Loan Balances
- Leaving an inheritance
- Charity donations
- Other end-of-life expenses
4. What plan can I qualify for?
There are four options for coverage regarding this specific product type. Depending on your health condition, you will be able to qualify for one of the following four categories.
Qualifying for the Level plan means you are in great health and answer favorably to all the health questions during the phone interview. The death benefits are applied on the first day of the policy.
Depending on the carrier, Level is also known as “Preferred” or “Standard” to describe their day one coverage product. Traditionally a Level-Benefit has the most economical premiums and add-ons options known as “riders” to the policy.
This product offers the lowest price and immediate death benefits.
Every Graded plan has its own rules and guidelines. This type of plan has partial waiting periods that vary from company to company. This will typically be for people with specific health conditions that are classified as higher risk.
The waiting period is typically two years and pays a percentage of the death benefit that increases each year. Some carriers do not pay the full death benefit out until the fourth year.
This product is generally for clients with past health concerns or with a specific health issue that is chronic or recent. For example, clients who have had a diagnosis of congestive heart failuremay be able to find a plan in this category with specific carriers.
Graded products will be at a midpoint price with a waiting period on non-accidental deaths.
Modified Policies are very similar to Graded Policies, but there are a few distinct differences.
Just like Graded Plans, Modified Policies dive into your health conditions and place you in a more restrictive plan, this may include recent stroke, cancer, alcoholism, etc.
Typically for this policy, the carrier will return the paid premiums, plus 10 percent interest on those premiums if a non-accidental death occurs before two years.
For a non-accidental death, 100 percent of the death benefit will be awarded if the death occurred in year three or later depending on the carrier.
Modified Plans are often the most expensive plans while still having at least a 2-year waiting period. We do not recommend getting this a Modified plan.
Guaranteed Issue policies are known to have some of the highest premium payments. The great news about this product is, just like its name suggests, you are guaranteed to be issued the policy.
The carrier will reduce the policy limit and place certain age restrictions on the application. Guaranteed Issue Policies predominantly do not come with additional add-on options.
This product should be reserved for clients with severe health issues.
If a death happens within the first two years carriers will offer the return of paid premiums plus a predetermined interest rate, usually 10%.
5. How can I receive coverage?
There are two options when it comes to getting coverage.
Option 1: Captive Agency
A captive agent has access to one company’s products via contract. So even if the agent knew that there was a better product on the market for you they are not able to sell you this policy. Captive agents come in all different forms but the most common example would be your local Allstate, Statefarm, or Farmers.
There is nothing wrong with these companies other than they can only show you one product.
What happens if you cannot qualify for the product they are offering? Or it is twice as expensive as a competitor’s product?
Most likely if you do not do your homework you will get stuck with a policy from one of these companies that is more expensive than you need to be paying.
Option 2: Independent Agency
An Independent agent is allowed to represent as many companies as they choose. This means they instantly have a leg up on a captive agent because they have more options to find you the best price.
Price is extremely important and each carrier will insure different medical conditions.
This just gives you the consumer more options to be able to find the right plan.
How to Select an Independent Agency to Work With
You have so many options in the market place, where to begin?
Well, there are a few simple items to consider prior to working with an independent agent.
- Specializes in the niche
- Someone that you like and want to work with
- Has your best interest at heart
- Has access to many carriers to check prices and health condition requirements
At Willamette Life, we pride ourselves on being all of these four factors.
Call us at 844-576-0019
6. Can I purchase for someone else?
Yes, but with restrictions, you are able to purchase a plan for someone else. The person who will be receiving coverage needs to sign their name and be in the right mental state of mind to understand what they are agreeing to.
7. Can I apply over the phone?
Yes, you can! You have three options when applying for coverage.
- Voice Signature
- Email Signature
- Paper Application
The application process takes 20-30 minutes to complete.
a. Alabama Funeral Insurance is very affordable and offers individuals a cheap alternative to the inevitable end-of-life expenses.
b. Make sure you use an independent agent that can price shop multiple carriers to make sure you receive the best plan at the lowest price.
I’m the owner and founder of Willamette Life Insurance. Willamette Life specializes in Final Expense Insurance. We compare prices with different insurance carriers while finding the perfect match for your health and budget. This company was started to help educate the public on why Final Expense Insurance could be a great option for them and their family. We strive to be friendly, informative, and always have the client’s best interest as our top priority. Everything in this article is my own professional opinion and experiences I have had during my time in helping clients.