Creating A Final Expense Policy That Meets Your Unique Needs

​Final expense insurance is a specialized form of life insurance designed to cover the costs associated with a person’s funeral, burial, and other end-of-life expenses. As these costs continue to rise, having a final expense policy in place can provide peace of mind for both you and your loved ones. However, not all final expense policies are created equal. To ensure that your policy fits your specific needs, it’s essential to customize it appropriately. In this blog, we’ll guide you through how to create a final expense policy that meets your unique financial and personal requirements.

1. Understand the Basics of Final Expense Insurance
Final expense insurance, sometimes referred to as burial or funeral insurance, is a type of whole life insurance with a focus on covering the costs that arise after death. Unlike traditional life insurance policies, final expense insurance typically offers smaller death benefits, usually ranging from $2,000 to $50,000, depending on the policy and provider. These funds are primarily intended to cover funeral costs, medical bills, and any other final debts that might be left behind.

This type of insurance is often favored by older individuals, especially those who do not have substantial savings or assets to cover these expenses. However, it is suitable for anyone who wants to ensure their loved ones won’t be burdened with the financial stress of funeral costs.

2. Assess Your Specific Coverage Needs
The first step in creating a final expense policy is to evaluate how much coverage you’ll need. Consider the following factors when determining the right amount:

• Funeral and Burial Costs:
  The average cost of a funeral can vary depending on location, the type of service, and the funeral home, but it typically ranges from $7,000 to $12,000. Additionally, burial costs can add to this, with expenses such as caskets, vaults, and cemetery plots.
  
  
• Medical Bills:
  If you have outstanding medical bills or expenses from a recent illness or accident, you may want your policy to cover these as well.
  
  
• Debts and Loans:
  If you have unpaid debts, such as credit card balances or personal loans, you may want to include these in your final expense insurance to avoid leaving your family with the responsibility of paying them off.

By calculating these costs, you can better determine how much coverage you need. It’s always a good idea to discuss your needs with an insurance agent who can provide a tailored recommendation based on your circumstances.

3. Choose Between Whole Life or Term Life Insurance for Final Expenses
Final expense insurance is typically a type of whole life insurance, meaning it lasts for your entire lifetime as long as premiums are paid. However, some people may consider term life insurance if they are looking for more affordable coverage for a set period.

• Whole Life Insurance:
  This option provides lifelong coverage and builds cash value over time. Whole life insurance is ideal for final expense coverage because it remains in effect until death, and you won’t outlive the policy. It also has fixed premiums, which makes it predictable and easier to budget for.
  
  
• Term Life Insurance:
  While term life insurance generally offers lower premiums, it provides coverage only for a set term (e.g., 10, 20, or 30 years). If you pass away during the term, your beneficiaries receive the death benefit, but if you outlive the term, the policy expires without any payout. Term life insurance is typically not the best option for final expense coverage, as you cannot guarantee the policy will be in effect when you need it.

For final expenses, whole life insurance is generally the better option due to its long-term protection and the peace of mind it offers to policyholders and their families.

4. Consider Adding Riders for Extra Protection
Riders are additional features you can attach to your final expense insurance policy to provide more coverage or benefits. Some of the most common riders include:

• Accidental Death Benefit Rider:
  This rider pays an additional death benefit if the policyholder dies due to an accident, providing extra financial protection.
  
  
• Waiver of Premium Rider:
  If you become disabled or unable to work, this rider ensures that you don’t have to continue paying premiums while you’re unable to earn an income. It can be a helpful option if you're concerned about future health issues.
  
  
• Living Benefits Rider:
  This allows you to access part of your death benefit while you’re still alive if you are diagnosed with a terminal illness. This can be particularly useful for covering medical expenses during the final stages of life.

Adding riders to your policy can provide additional coverage and more flexibility, ensuring that your policy meets your exact needs. Always consider the costs of these riders in relation to the benefits they provide.

5. Review Your Policy Regularly
Your final expense policy should be reviewed periodically to ensure that it still meets your needs, especially if there are significant life changes like marriage, the birth of children, or changes in health. Additionally, inflation can affect the cost of funeral expenses, so it may be necessary to adjust the coverage amount to reflect these changes. Regular reviews ensure that your policy is always aligned with your goals and offers the right level of protection.

Conclusion
Creating a final expense policy that meets your unique needs is a crucial step in ensuring your loved ones aren’t left to bear the financial burden of funeral and burial costs. By carefully assessing your coverage needs, choosing the right policy type, considering additional riders, and comparing different plans, you can ensure that your final expenses are adequately covered. 

At The Drennon Agency, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get insurance that fits your needs. You can get more information about our products and services by calling our agency at (469) 631-4673​​. Get your free quote today by CLICKING HERE. 

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.​