Simply Explained: Life and Final Expense Insurance Policies

Ancillary March 30, 2017 0
Simply Explained: Life and Final Expense Policies | Senior Market Advisors

It’s time for you to speak with an agent about life and final expense insurance.

Life and final expense are ancillary insurance productsThough it may be unsettling to think about, your Medicare plan does not cover the high costs that come with death. It is important for you to figure out your life insurance plan now, so that your loved ones don’t have to break their piggy banks to pay for your final expenses.

Life insurance comes in two forms –

  • Whole Life – is valid for your entire life and potentially the days following
  • Term Life – is valid for a set amount of time, typically up to a year

You may want to consider a term life plan if you are suffering from a temporary illness or injury and will not need the same amount of coverage for the next year. Speak to an agent to determine which form of life insurance is best for you and your needs.

Most importantly, you’re going to need a final expense plan. Final expenses are any costs associated with funerals, burials, and sometimes medical bills for final hours.Having final expense insurance means that when you die, your appointed beneficiary (typically a spouse or close relative) – will be reimbursed for the expenses. You will usually have the ability to change your beneficiary after your policy has been active for a year.

Though life and final expense insurance are very similar, they do come in the form of two separate policies, and neither are covered by Medicare. However, you can set up your Medicare Advantage plan so that unused funds go towards your final expenses for a loved one.

Final expense insurance can cost anywhere from $5,000 to $50,000 depending on your age and health at the time of purchase. Life insurance will provide more coverage at a higher cost. While final expense insurance will help cover final medical and burial costs, life insurance will help to support the family members you leave behind who may have been counting on your paycheck. It can pay for any outstanding debt, such as a mortgage.

Essentially, life insurance provides more coverage. Remember the differences:

Final Expense Life
Funeral and burial costs Outstanding bills, loans, and mortgages
Small outstanding medical bills Large outstanding medical bills

 

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Anastasia Iliou
Anastasia Iliou
Content Marketing Manager at Medicare Plan Finder
Anastasia graduated from Belmont University with a Bachelor's degree in Songwriting. When she's not writing, she's on a mission to visit all 50 states in the U.S (and to date has reached 26). Anastasia loves writing music, hiking, and her pet hedgehog, Luna. She loves animals (but not so much bugs) and spends her free time volunteering for The Elephant Sanctuary in Tennesee.