Funeral Insurance, aka Final Expense Insurance, is peace of mind for you and your love ones. When you pass away they will have the means to pay for your funeral expenses.
Funeral Insurance or Final expense insurance is typically a low face amount whole life insurance policy anywhere from $5,000 to $50,000, and with no medical exam required.
There are four types of Final Expense Insurance.
1st LEVEL - A Level Final Expense policy beneficiary will receive the full policy amount upon death of the insured, even if they die within the first week of the policy being active.
2nd GRADED - A Graded Final Expense policy payout the death benefit plan on a graded scale during the first two years of the policy.
Example of a typical Graded Final Expense (companies may offer different payout)
Death in year 1 of owning the insurance policy: 30% of the $10,000, or $3,000 is paid to the beneficiary.
Death in year 2: 70% of the $10,000, or $7,000 is paid to the beneficiary.
Death in year 3 or after: 100% of the $10,000 payout is paid to the beneficiary.
3rd MODIFIED - A Modified Final Expense policy are nearly identical to graded plans, except for the type of payout. Modified plans are used for pre-existing conditions that pose a higher risk for the insurance company, which results in a reduced payout schedule.
A typical Modified payout will look like this (companies may offer different payout:
Year 1: Return of your premiums paid to date + 10% interest
Year 2: Return of your premiums paid to date + 12% interest
Year 3: 100% of the $10,000 payout
4th GUARANTEED ISSUE - Guaranteed Issue Final Expense policy
means there are no health questions and all of your clients will be approved.
Guaranteed issue is for those with pre-existing conditions that deem them uninsurable in many cases.