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A Guide to Select the Right Final Expense Insurance

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A right final expense insurance package is more important than you might think. A 2020 report by the Federal Reserve revealed that Americans have $3,500 in their savings account balance. Compare this with the average cremation cost of $7,640, and you’ll realize why you might need to prepare for funerals in advance.

Well, the burden will not be you, but on your family members. To ease the financial burden on them, you must select the best final expense insurance package for yourself. But how do you select one? In this article, you will find out how to choose the best one.

Final Expense vs. Burial vs. Pre-Need

Before you select a final expense insurance package, you need to understand the difference between final expense, burial, and pre-need insurance. Although used interchangeably, these are quite different from one another. Also, the type of package will affect the premium you pay.

Burial insurance is the term used broadly to cover all funeral expenses. In some cases, it is also referred to as pre-need insurance. Thus, it covers the funeral services along with the cremation cost. You get to work directly with a funeral home. They take care of everything from the cemetery plot arrangement to caskets. Your insurance package will cover all these expenses. Pre-need or burial expenses are also bought from a particular funeral home.

The final expense, on the other hand, is just like regular insurance. You select a package, add a beneficiary, and pay the premium till completion. When you die, the face value will be transferred to the beneficiary to carry out the funeral proceedings. They can also pay for the last medical bills or post-funeral expenses.

Calculate your Expenses First

Before you select a package, you should gather a calculator and make some estimates. Get estimates regarding the likely funeral costs. This figure will determine what kind of final expense package will be best suited for you.

Funeral expenses will vary significantly from state to state and person to person. An affluent person in an expensive neighborhood is likely to spend more than a middle-class person in a rural area. Therefore, you must consider the location and gather the fees charged by funeral service providers. The national average was $7,640 in 2019.

The items to include when calculating the cost are:

  • Basic service fee charged by funeral homes
  • Embalming
  • Transportation and vehicle charges
  • Hearse
  • Staff charges
  • Memorial printing charges
  • Vault
  • Makeup for the body
  • Flowers and decoration charges

Depending on your needs or wants, you might have more expenses you should include.

Since you’re selecting final expense insurance and not burial insurance, you should calculate expenses like medical bills and debt. Debt can be student loans, personal loans, credit card debt, or mortgage debt.

Once you’ve fingered out all these things, you’re in a better position to choose the best final expense insurance for you.

Compare Insurance Packages and Premiums 

Many carriers are offering final expense insurance packages. While all of them offer the same benefit, they vary by premiums, cost, and added benefits.

You need to do some research on your local market and see what options are available. Also, there are two types of final expense policies. One is the Level Benefit plan, and the second is the Graded Benefit plan.

For Level Benefit, you need to be fully fit and free of any major illness. For Graded plans, you can have minor health conditions that include heart problems and cancer.

Then there are modified plans that are customized to meet your needs.

All of these packages will have a different premium and payment policy. You need to select the one matching your own calculated cost and other requirements.

Request a Quote from a Broker

Finally, you should request quotes from a broker near you. They are in a better position to offer you the best final expense insurance plans that meet your needs. Most brokers offer a free quote after a consultation. After you have the quotes from various carriers in front of you, you can select the one that’s just about perfect for your needs. Many brokers today are available online. So you wouldn’t have a problem finding a few in your area.

When contacting a broker, it’s better to go with an independent one. They’ll be able to offer packages from different carriers. Agents, on the other hand, are confined to a single carrier. Gary P. Cubeta is an independent agent who reviews many final expense packages on his website Insurance For Final Expense. Read the reviews to get an idea of the best packages available on the market.