When it comes to covering the costs associated with final affairs in life and funeral expenses, both final expense insurance and life insurance can potentially be viable options. But what’s the difference? We will give you a breakdown below.
What Is Final Expense Insurance?
Final expense insurance specifically covers any and all costs related to final affairs, such as unpaid bills, funeral and burial costs. This is also why it’s sometimes referred to as funeral insurance. It’s important to note these differences, because while life insurance can top over a million dollars, funeral insurance tends to stay at or below $20,000.
That being said, aside from ceremonial costs, final expense insurance can be used to help cover any accumulated debts from your life (many people assume these go away once someone passes, but the ugly truth is that many of them don’t, such as mortgages, student loans, and any end-of-life medical care not covered by Medicare). If there is no other way to pay these things off, the debt can get passed to your estate, and become the burden of your loved ones.
What Is Life Insurance?
Life insurance provides financial support to surviving dependents or other beneficiaries after the death of an insured. The insured will choose the desired death benefit amount based on the beneficiaries’ estimated future needs.
There are different types of life insurance, that come at different costs, expire under different conditions and at different times, and cover different costs under different conditions, so it’s important to make sure you are well versed in your options before buying.
There are short term options that you can buy a policy for a specific amount of time for example, commonly for 10, 20 or 30 years. If you die during that time, your beneficiary receives the death benefit. If you’re still alive at the end of that time, your policy ends.
There are also long term or permanent options, such as whole life insurance and universal life insurance. These options come with higher premiums, but they will cover benefit payouts to your beneficiary regardless of when you die.
Do I Need Insurance?
In some cases, a family can cover the costs with liquidated assets, or you may be able to self-insure. But if not, considering final expense insurance may be right for you. Having final expense insurance can also give you the peace of mind that comes with knowing that, no matter what, whenever the time comes everything is going to be taken care of. These types of conversations can be tough, and making the proper arrangements can seem overwhelming both financially and emotionally.
While this final chapter of life isn’t fun to address, it’s incredibly important to do so to ensure that you and your loved ones have everything taken care of when the time is necessary. Talking to a knowledgeable, friendly specialist can ensure that you have everything under control and taken care of. Fill out a simple form and get in touch with one of our specialists today.