In case of sudden death, funerals have costs that might surprise ordinary people. The average funeral is around $9,000, and the deceased survivors do not usually have enough cash. Fortunately, some agents sell final expense insurance to cover these expenses. Regular life insurance is generally taken to provide financial help for the deceased’s family. Some life insurance policies cover more than a million dollars. The proceeds can pay for estate taxes and provide enough financial support upon the death of the insured. In contrast, final expense insurance seldom goes above $20,000.
Like other insurance policies, the monthly premium depends on the age of the insured. Younger people can buy at a lower premium rate. Due to the lower insured value, the incentive is also lower compared to regular life insurance. For those who already have a life insurance policy, final expense insurance can simplify the benefits. It can include catering, vehicle hires, and other associated or unforeseen expenses after the death of the insured. This will leave the regular life insurance intact.
Funeral homes usually offer pre-planned services. The prepaid services have guaranteed prices, except for some items like flowers. Final expense insurance, as well as pre-need insurance services, can pay for these expenses. This is a better alternative, rather than pre-paying the funeral service. Additionally, it would be problematic if the individual moved out of state. The prepaid plan might never be used. In the case of prepaid insurance, the beneficiaries can use the proceeds in any country.
Final expense insurance seldom exceeds $20,000, and it can be used for funeral expenses. It can also cover other burial expenses, including flowers and catering. This frees up the primary insurance policy for its original uses.