How Does Final Expense Insurance Policies Work

Although known in different names of final expense insurance, burial insurance, guaranteed life insurance, all these insurance plans largely refer to the same type of insurance. These policies ensure that your loved ones don’t feel financially burdened and are passed down the funds to pay for your funeral, burial, or any other expenses you may leave behind.

The Features of Final Expense Insurance and How the Insurance Works

Final expense policies come in various types, although the purpose remains the same. It’s essential to know the features of these policies and choose the right coverage that matches your distinct requirements. 

Compared to Pre Need policies that exclusively cover only the burial or funeral service, a final expense policy like Mutual of Omaha final expense generally includes comprehensive coverage of the following:

• Funeral expenses of casket/cremation urn, embalming, ceremony, transportation, burial vault/liner, burial clothing, floral arrangements, cemetery property
• Unpaid hospital/medical bills
• Travel expenses for family
• Unpaid credit card debt
• Estate taxes

Guaranteed Whole Life Insurance

This type of final expense policy is typically for individuals aged between 50 to 80 years. As implied by its name, you can be assured of guaranteed coverage without any questions asked. While most final expense policies mandate a medical examination or assessment of medical history by insurance providers to evaluate your mortality risks, a guaranteed insurance policy requires no evasion of your personal life. 

Regardless of your health condition, you will be approved for this insurance. The only catch is that most of these policies come with a waiting period, and in case you pass away during their period, you will not be entitled to full coverage, and only the premiums that you paid will be refunded with applicable interest up to 10%.

Final Expense Insurance – Level Plan

This type of insurance has no waiting period involved and offers full death benefit immediately after passing away. Typically in a day or two, your beneficiaries received the fixed lump sum payout. However, to qualify, you need to provide answers to a health questionnaire and be subject to a prescription history analysis. If you are in good health and don’t suffer from life-threatening diseases or a terminal condition, you can qualify.

Final Expense Insurance – Graded Plan

If you don’t qualify for a level plan of Mutual of Omaha final expense policy, there is still an option of the graded plan. A compromise between the above two plans, the graded death final expense policy, comes with a schedule of the percentage of death benefits modified over time. For instance, in some policies, in the first year, you may receive 30%, the second year 70%, and in the third year 100%. 

This means that there is generally a two-year waiting period before you can avail complete benefits. You may be placed in a graded plan for certain health conditions of alcoholism, angina, stroke, aneurysm, or cancer.

It’s vital to sit down with your loved ones and have a candid discussion about planning for your final expenses. If you are confused on what type of plan works best for you, consult an experienced insurance advisor like Gary Cubeta from Insurance for final expenses, who can help you decide.