Why use a Final Expense Policy to Protect your Family?

A Final Expense insurance policy is an essential element in a family's financial plan. It offers protection that can give a family financial relief in a time of loss by paying a predesignated amount to the beneficiary of the insured.


Final Expense Final expense policies are offered in a variety of whole life insurance policy options that not only helps your family prepare for the unexpected but builds cash value that can be used during other life emergencies.


Typically, the premiums within these policies are guaranteed never to increase in addition the death benefit within a final expense policy is also guaranteed to be paid out. This guarantee is typically secured by the assets of the insurance company and a guaranty association set up with its purpose of covering insolvent insurers.


Final expense insurance also gives the flexibility to choose payment frequency. A policy owner may say choose to pay monthly, quarterly, annually or in some instance one single premium payment.


Final expense whole life policies, tend to build cash value. This cash value accumulates tax-deferred and within some policies, they may earn dividends. It is important to note that dividends are not guaranteed, however, when it is paid it is a welcome benefit. This dividend can be spent, applied to the policy or may even be applied to the premium expense reducing your net expenses.


It is important to make mention that some final expense policies can be considered a modified endowment contract and may cause a customer to be taxed. This typically occurs when A policy is issued to an insured at certain age groups and the policies cash value is distributed in the form of dividends, loan or if the policy is assigned to someone else. It is, therefore, best to ask for individual financial advice before distributions.


Dealing with death is an extremely difficult experience more so continuing to deal with the challenges of life after the fact. It is therefore important that we all look at the many expenses associated with death so as to get prepared. On average, the typical expenses that need to be covered are using the funeral home, preparation and embalming the body, memorial service, getting a plot or housing of the remains, getting a death certificate, getting a casket and headstone or alternatively cremating the body.


Despite death and the circumstances to follow being difficult securing a final expense life insurance policy that can cover these expenses is quite easy, and your age and health may not affect your approval for coverage depending on the option selected, however, attention must be paid to how these policies are structured as they may offer added features.