Final expense insurance is designed exclusively for elderly people who want to save their family members from end-of-life expenditures. It is a type of permanent life insurance policy with lower premium rates benefiting elderly people with limited savings. It is also more secure than permanent life insurance with guaranteed death benefit as long as the premium is paid. However, there are different types of final expense insurance that you must understand to determine the best policy for you.
These types provide different levels of benefits according to your health condition and affordability to pay monthly premiums. The following section of the blog discusses the different types of final expense insurance to help you make an informed decision.
Different Types of End-of-Life Insurance Policies
End-of-life insurance policy comes with different death benefits that allow you the flexibility to choose according to your specific needs. The following are the different types of final expense insurance.
Immediate Final Expense Policy
An immediate final expense policy provides full benefit of the insurance irrespective of the time and reason of beneficiary’s death. Once the policy is started it provides guaranteed full insurance benefits to the family members of the deceased person. The amount received by the family members to cover the cost of end-of-life expenses including, funeral, burial and medical bills.
Graded Benefits
Under graded insurance benefits the timing of the death of the policy holders determines the insurance amount to be received by the beneficiaries. The total benefits can only be obtained if a policy holder dies after two years from when he purchased the policy. If he dies within the first year then the insurance amount can be 40 to 50 %. Similarly, if he dies within the second year the value might go up to 80 %. However, this partial benefit amount varies according to different insurance providers. Make sure you consult a top class final expense insurance advisor in Florida to obtain optimum benefit.
Modified Benefits
Modified final expense insurance benefits are the same as the graded insurance policy with one extra advantage. Only in case of accidental death of a policy holder the insurance provides full benefits within the first two years. If the cause of death is other than accident, it provides partial benefits during the first two years.
Guaranteed Issue
A guaranteed final expense insurance policy is best for people with serious or concerning health issues. It does not involve any underwriting requirements like the traditional life insurance policies. However, the insurance benefits can only be received after a wait of about two to three years. If a person dies within the waiting period the beneficiaries would not receive any benefits. However, they will receive a refund of the full amount of premiums paid along with the interest amount.
Term Funeral Insurance
It can be purchased for a limited time period and if the insurance benefit is not used within the stipulated time period the insurance can be renewed. Moreover, the insurance premium is much cheaper than other policies. However, if you need to renew the insurance the premium rates will become costly. One of the demerits of this type is that it does not provide protection against changing funeral costs.
Endnote
The blog has discussed the different types of final expense insurance policies. Hope these prove insightful for you. The premium rates vary from one type to another and you need to determine which one is best for you as per your unique financial and health condition. Being cognizant about the different policies would enable you to choose the right policy offering optimum benefits.