Final Expense Insurance for Seniors: Straightforward & Clear

Final Expense Insurance for Seniors
Final Expense Insurance for Seniors: Straightforward & Clear

Everyone knows that life insurance is a popular, useful, and a needed financial tool to protect loved ones from financial hardship.

With average funeral costs between $8,000 – $12,000, this is a major financial burden to ask your family members to take on. However, some insurance plans provide the financial resources needed in this time of grief.

When looking into burial life insurance policies, there are many options, and it is easy to get overwhelmed. Fortunately, there is a program designed specifically for seniors.

Final Expense Insurance For Seniors

Final expense coverage has unique benefits while also offering the permanent features of a traditional whole life plan. As a result, these policies are an excellent option for seniors looking for an affordable and straightforward way to plan their funeral expenses.

These senior final expense programs are also known as burial insurance and funeral insurance. Depending on your age, price and coverage options will differ.

Benefits of Burial Insurance

A senior final expense program refers to a type of whole life insurance coverage. Two items make final expense insurance unique and separate it from other whole life plan options.

No Medical Exams: Senior applicants will never be asked to get a health exam or go to a doctor’s office. The entire process can be completed from the comfort of your home over the telephone.

Affordable Coverage: The coverage amounts are typically $2,000 – $40,000. This allows the monthly premium to be much more affordable than a larger, traditional whole life plan.

Whole Life Insurance Features

Final expense coverage is designed for seniors to make a simple and low monthly payment to receive three permanent benefits. These benefits are standard with every whole life insurance policy.

Price Never Increases: The monthly premium will always be locked in. This means the price you pay on day one will be the same price in year 30. Knowing the costs down to the penny for those on a fixed income is very important for monthly budgeting. This plan has no surprise price increases.

Coverage Never Decreases: Your insurance coverage will never decrease or terminate. When purchasing a plan meant for your end-of-life expenses, it is key to know that your policy will be there when it is needed. This plan will always be active as long as your monthly premium is paid.

Builds a Cash Value: For each payment made, a portion will go towards the cash value. Over time this amount will grow and can be borrowed against in future years.

What Can the Money be Spent On?

Burial insurance can be used to cover anything the beneficiary deems necessary. There are no rules or regulations on what the payout must be used for. However, there are common final expenses beneficiaries use the payout for.

  • Funeral costs
  • Burial and cremation expenses
  • Remaining mortgage or car loan balance
  • Outstanding credit card debt
  • Medical bills
  • Legal expenses
  • Leaving an inheritance
  • Charity donations

Plan Tiers

There are four plan tiers within burial insurance for seniors. Every applicant will qualify for at least one of these options.

Level: This plan is reserved for seniors who are in good health. It includes the lowest premiums and immediate coverage for seniors. In addition, level coverage is the only final expense coverage with no waiting period.

Graded: Offering more lenient underwriting standards, the graded plan is best suited for someone with a past medical history that could raise concerns for an insurer. The more favorable underwriting brings in a two-year waiting period. This policy pays out a percentage of the death benefit if the insured passes during the waiting period.

Modified: A standard two-year waiting period comes with this plan. This can be classified as the middle ground between a graded and guaranteed issue plan. Seniors can usually find lower prices by using a highly rated guaranteed acceptance plan.

Guaranteed Issue: This funeral insurance plan asks no medical questions, and virtually every applicant is approved for coverage. Use this option if you have a chronic or terminal illness or do not want to answer any medical questions. Be careful with buying this product type through television ads, as those will most certainly not be your best option.

calculator piggy bank

The Price For Senior Final Expense Insurance

The monthly cost can vary depending on several factors. Because of these varying factors, every senior citizen could pay a different price.

How Final Expense Insurance Quotes are Calculated

There are four key parts when life insurance companies determine the cost of final expense insurance.

Health: The medical history of the applicant will carry the most weight. The healthier the person, the lower the risk is for the providers, and a lower risk means lower monthly premiums.

Age: Once the policy is in force, the price is locked in and will never increase. However, the longer someone waits to take out coverage, the more the price will increase. Burial insurance for seniors over 80 will cost more than for someone in their 60’s.

Gender: Females live an average of four years longer than males. This matters because the shorter your expected life span, the more risk is assumed by the carrier. With more risk comes higher premiums, so men pay more for coverage than women.

Policy Amount: The more coverage someone takes out, the higher they can expect their premiums.

Price Estimates for Senior Funeral Insurance

The price chart listed below shows burial insurance quotes.

If you have a simple and healthy medical history, you can expect to pay on the lower end of the price range. If you have a complex health history, you will be required to pay towards the higher end.

Female

Monthly Premium Range

Non-Smoking Rates

Age $10,000 $15,000 $20,000
45 $23 – $34 $32 – $49 $42 – $64
50 $24 – $39 $35 – $57 $45 – $80
55 $28 – $47 $40 – $69 $52 – $103
60 $33 – $54 $48 – $80 $63 – $119
65 $41 – $66 $60 – $99 $79 – $146
70 $53 – $80 $78 – $120 $103 – $177
75 $72 – $116 $107 – $173 $142 – $254
80 $98 – $190 $146 – $283 $194 – $411
85 $136 – $220 $202 – $328 $269 – $436

Male

Monthly Premium Range

Non-Smoking Rates

Age $10,000 $15,000 $20,000
45 $27 – $47 $39 – $68 $51 – $89
50 $31 – $56 $44 – $83 $58 – $110
55 $36 – $61 $52 – $91 $69 – $135
60 $44 – $68 $64 – $101 $84 – $149
65 $56 – $91 $83 – $135 $110 – $199
70 $75 – $106 $110 – $158 $146 – $233
75 $100 – $150 $148 – $223 $197 – $328
80 $140 – $232 $208 – $346 $276 – $461
85 $193 – $312 $288 – $467 $382 – $621

Other Funeral Planning Options

There are other options to review when looking into financial planning for seniors. Every person’s situation is different and should be considered when deciding if final expense coverage is worth it for each individual.

Traditional Whole Life

This product is a staple in the life insurance industry. However, it can be an expensive option to pay for your final expenses.

Whole Life Benefits: The standard benefits of this plan type include a price lock, coverage lock, and builds cash value that the owner can borrow against.

Larger Policy Amounts: The policy amounts start around $50,000 and can go into the millions. This can be problematic for anyone on a fixed income due to the required high monthly premiums.

Tax Benefits: A tax advisor may recommend using this product to shelter wealth or use it for tax advantages.

Term Life Insurance

This plan provides temporary coverage and is very useful in specific situations. However, using it to cover funeral expenses can be risky for your family’s financial well-being.

Coverage Terminates: Your coverage will expire at some point. For example, if you take out a 20-year policy at 50, your policy will terminate when you reach 70 years old.

Price Is Cheaper: Since coverage will eventually terminate, the monthly premiums are cheaper. Some life insurance companies like AARP and Globe Life offer temporary coverage that actually increases in price the older you get. Beware of plans like this that are marketed as a senior final expense life insurance plan.

Does Not Build Cash Value: This policy will build no cash value, which means you are essentially renting coverage each month with no additional or living benefits.

Prepaid Funerals

There are specific pros and cons of a prepaid funeral, also known as a pre-need funeral plan. However, this coverage is right in specific situations.

Funeral Home is the Beneficiary: This plan is unique because the beneficiary of the plan is the funeral home. This limits what the money can be used for. There is usually a final phone or electric bill that needs to be paid after someone passes away, which cannot be covered with a prepaid funeral plan.

Covers Specific Expenses: The only things the money can be used for are directly tied to funeral costs. This includes a casket, urn, viewing, memorial service, etc.

Single Funeral Home: What happens if this business is no longer operating in future years, or you decide you would like to change the location of your final resting place? These are real examples that can cause problems for your family as this protection typically is not mobile or transferable.

Savings or Investment Account

This may seem like the safest way to prepare for final expenses associated with passing. However, there are still risks involved.

Passing Away Unexpectedly: No one knows when their health will decline, this can cause saving efforts to come up short and put families in a difficult financial situation.

Investment Uncertainty: The stock market is another way to grow your money and use it for final expenses. However, the market is not a guarantee and has been known to be volatile.

Inflation: The United States has a history of inflation. It is hard to predict what the dollar will be worth in future years and if your saving efforts will outpace the rate of inflation.

Senior citizen smiling

Burial Life Insurance For Seniors FAQs

What is the Cost of a Traditional Service?

The average cost of a traditional burial service with viewing is $7,643 or $6,280 for cremation. Not included in these price estimates is the cost of a headstone or cemetery plot.

This cost estimate can differ depending on several variables. Location and the selections made throughout the process play the biggest role in the final cost.

What is the Best Burial Insurance for Seniors?

Final expense life insurance for seniors is specific to the individual applying. However, there are three main things to look for because each insurance provider has its own underwriting standards and risk tolerance.

Find an agency representing several top final expense insurance carriers to help you discover the best plan for you.

Cost: Make sure that the monthly premiums are affordable for your budget well into the future.

Coverage: Getting immediate coverage whenever possible is the best option. Seniors are often surprised by how accepting final expense programs are.

Company: Applying for coverage with an insurance company that has a strong financial rating is important to make sure they can pay their financial commitments (your policy claim) when the time comes.

Does Social Security Help with Final Expenses?

Social Security awards up to $255 death benefit to the living survivor of the deceased. This is nowhere close to what is needed to lay a loved one to rest. Do not count on this as your sole financial plan.

How do I Apply for Funeral Expense Insurance for Seniors?

Work with an independent agency that has access to multiple life insurance companies.

Willamette Life is an independent agency that specializes in senior life insurance coverage. Give us a call at 844-576-0019

Women drinking coffee

Final Thoughts

a. Final expense insurance for seniors has great benefits, including affordability, a price that never increases, a death benefit that never decreases, and a cash value that builds over time.

b. Regardless of health, all seniors can qualify for final expense coverage with no medical exam.

c. Other products on the market can help pay for funeral expenses, but each comes with potential drawbacks. Again, speak with a professional to understand how the pros and cons of each apply to your financial situation.

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