Life Insurance vs. Final Expense Insurance for Seniors

Life insurance can be an essential component of your overall financial plan. While some believe that this type of coverage is no longer needed once you are age 50 or older, this is not necessarily the case.

This is because, while the proceeds from a life insurance policy can be used for protecting a dependent spouse and / or children, there are also some different needs that a senior may have for providing these funds, as well.

Why Seniors Should Consider Having Life Insurance

seniors life insuranceThere are numerous reasons why a senior may opt to purchase – or to purchase more – life insurance coverage. These include just some of them:

  • Payoff of Debt Obligations – Today, because people are living so much longer, it is more likely that seniors will have certain types of debt obligations such as a mortgage and / or a vehicle loan. Passing away with these debts still in place could mean that your survivors will either need to come up with the payments for these loans or move on to a situation that is more affordable for them. But, the proceeds of a life insurance policy could allow those you love to quickly and easily pay off these debts, without going into financial hardship.
  • Replacement of Retirement Income – When a retiree passes away, it may mean that some or all of his or her retirement income will either be reduced, or even cease altogether. If you have a spouse or other loved one who is also counting on this income for their living expenses, it will be important to ensure that there is a way to replace this income stream when you are gone. Life insurance can allow you to do this.
  • Charitable Donation – Many seniors have a favorite charity that they would like to support. By naming the charitable organization as the beneficiary of your life insurance policy, you can provide them with a sizeable donation for just pennies on the dollar.
  • Funeral / Final Expenses – Most people will also have at least some amount of funeral and final expenses. Today, the average cost of one’s final expenses could be between $7,000 and $10,000 – especially when factoring costs such as a memorial service, music, flowers, transportation, and the printing of funeral notices. Final expenses can also include the purchase of a headstone and burial plot, or the cost of cremation services.

Regular Life Insurance Versus Final Expense Insurance for Seniors

When planning a way to cover your funeral and final expenses, you may have the option of choosing a regular life insurance policy, or alternatively, a final expense policy. While these two types of coverage can have some similarities, there are also several differences.

In many cases, final expense coverage will be a form of whole life insurance. This means that the policy is intended to last for the whole, or the remainder, or your lifetime. These policies are designed primarily for paying the funeral and other final expenses that you may incur – and so that those you love and care about will not have to dip into their savings to pay these bills, or worse yet, put these expenses on credit.

Final expense life insurance is often referred to as either burial insurance or funeral insurance. This coverage is typically sold to those who are between the age of 50 and 85 – and in some cases, an insurance company may even offer coverage for an applicant who is older. Conversely, regular life insurance coverage may be offered to individuals who are newborn babies, on up to age 90+.

With final expense life insurance, the coverage amount is usually relatively small in comparison to regular life insurance. For example, many final expense policies today will provide a face amount of $5,000 to $25,000 – which, in many cases, is enough for paying off an insured’s final costs. While some regular individual and group life insurance policies may also have relatively small amounts of death benefit, these types of coverage are often purchased for paying off large expenses, such as a mortgage, estate taxes, or ongoing living expenses for loved ones.

In addition, many final expense life insurance policies will not require an applicant to undergo a medical examination as a part of the approval process. Because of this, a final expense policy can often be approved within just a matter of days – or possibly even the very same day of application.

Alternatively, a regular, traditional life insurance policy will often require that the applicant for coverage take a medical examination. This exam will usually entail meeting in person with a paramedical professional who will ask the applicant various health questions, take a blood pressure and a heart rate reading, and will request a blood and a urine sample.

The underwriters who are reviewing an application for regular life insurance coverage may also want to know more about an applicant’s health and health history. Therefore, the underwriters may request the applicant’s medical records from his or her primary care doctor, from any specialists that the individual may see – or from all of them.

Because of the health and medical exam information that needs to be reviewed, it can often take weeks – or even longer – for a regular life insurance policy to be approved and issued. Final expense coverage, however, can be in place much more quickly.

Factors to Consider When Buying Senior Life Insurance Coverage

When purchasing life insurance for seniors, there are several important factors to consider. First, it will be essential to have a good understanding of how the benefit proceeds may be paid out on a final expense policy.

This is because some final expense life insurance policies have graded death benefits, meaning that only a percentage of the policy’s stated death benefit will be paid out to the beneficiary if the insured dies within the first year or two of purchasing the policy.

It is important for the beneficiary to also be aware of this, as he or she may be counting on a certain amount of proceeds from the policy to pay off the anticipated final expenses, as well as possibly other bills.

Knowing information about the life insurance company that you are purchasing your coverage through can also be essential. This is because you will want to be sure that the insurance carrier is strong and stable from a financial standpoint and that it has a good reputation for paying out its insurance policy claims.

It is also wise to compare the premium cost of several different policies prior to moving forward. This is the case, regardless of whether you are considering the purchase of a regular life insurance policy or a final expense insurance plan for a senior.

Just like with many of the other products and services that you purchase, life insurance policies are not always priced alike – even for the very same type and amount of coverage. Therefore, it can be extremely beneficial to work with an independent life insurance brokerage or agency that has access to multiple different carriers. This can allow you to more directly compare the offerings – as well as the premium cost – of numerous insurers, and from there, you can determine which life insurance plan will be the best for you.

How to Find the Best Premium Quotes on Final Expense Life Insurance for Seniors

If you are a senior and you are considering the purchase of life insurance coverage, we can help. We work with many of the top life insurers – including carriers that offer final expense insurance – and we can assist you with attaining all of the key details that you will need. We can do so for you quickly, easily, and conveniently – directly from your computer – and without you having to meet in person with a life insurance agent. When you are ready to move forward with the insurance policy comparison process, then just simply fill out the quote form on this page.

Should you find that you still have any additional questions about the comparison of life insurance versus final expense insurance for seniors – or, even if you just happen to have a question or a concern about life insurance in general – then please feel free to call us directly.

Our experts will be happy to walk you through the quote process and to provide you with more details so that you can make an informed purchasing decision.

We understand that the purchase of life insurance as a senior may seem to present certain challenges. You may have various health issues – and you may have even been turned down for life insurance protection in the past. But the good news is that today, you may have many coverage options on your side. We will help you to find the insurance carrier, the coverage, and the premium that are right for you and your needs. So, contact us today – we are here to help.