Dear Toddy,
I’m recently widowed and living on social security. My wife passed suddenly, and we hadn’t really made any plans for when one or both of us go. We didn’t have much by way of savings and her funeral costs took up almost everything we had. All of this has made me realize I don’t want to burden my children once my time comes. What can I do to make sure they’re not left footing the bill?
~ Wondering Widower
Dear Wondering Widower,
I’m incredibly sorry for your loss and the predicament it has put you in. Unfortunately, you’re not alone – funerals can be costly, and the untimely passing of a loved one can seriously affect one’s finances. However, with the proper life insurance and planning, you can make sure that your children are not financially burdened when you pass away. Thankfully, there are a few end-of-life insurance options to help pay for funeral costs and any outstanding debts you may leave behind.
The Best Life Insurance to Cover Funeral Expenses
Final expense insurance and term life insurance for seniors are two of the best life insurance options to cover your funeral expenses and other end-of-life costs. To help you decide which option is best for you, Wondering Widower, I’ve assembled some of the most frequently asked questions and their answers.
What is final expense life insurance?
Final expense insurance, commonly referred to as burial insurance, is specifically designed to help your family cover funeral expenses. It is a whole life insurance policy that cost less than more robust whole life policies and pays out a small death benefit, typically between $2,000 and $35,000. Like all whole life policies, final expense insurance is permanent and builds cash value for as long as the policy is in good standing.
Does final expense insurance have to be used for a funeral?
Despite its name, final expense insurance death benefits don’t have to be used to pay for a funeral, burial, or cremation costs. The policy is referred to as “final expense insurance” or “funeral insurance” simply because it has a small death benefit designed to cover the costs of a funeral. Even so, your family is free to use the death benefit for anything, including funeral costs, grief therapy, family debts, or even a vacation (in your honor, of course).
Term Life Insurance for Seniors
If you’re looking for more coverage than final expense insurance provides, Wondering Widower, then a term life policy for seniors may be a better option for you. Term life policies offer varying levels of coverage from a few thousand dollars to a few hundred thousand dollars (and even more). Term life insurance rates for seniors vary based on your age and amount of coverage, and your policy can be tailored to your personal needs. And if you’re considering a term life insurance policy for burial insurance, it’s important to make sure your policy term is long enough to outlive you.
Term Life Insurance vs. Final Expense Insurance
Term life and final expense are great burial insurance options for seniors, however, both policy types have their own pros and cons. Final expense insurance and other whole life policies are permanent, meaning they do not have a predetermined date when coverage stops. So long as you continue to make payments on your final expense life insurance policy while you’re alive, your beneficiaries will receive your death benefit. Whereas with term life insurance, you’re only covered for your policy’s term, typically 10, 20, or 30 years.
In terms of cost, whole life policies tend to be more expensive than term life insurance, but that’s not necessarily the case with final expense insurance. Term life insurance rates for seniors can be high due to age, health, and higher coverage amounts, and final expense insurance may be more affordable thanks to lower coverage amounts. Ultimately, you’ll need to weigh the pros and cons to see what type of burial insurance is best for you, Wondering Widower.
Weigh Your End-of-Life Insurance Options Carefully
It’s great that you’re looking out for your family and their financial future! Before you make any decisions, I recommend that you contact a trusted life insurance advisor to thoroughly weigh all of your options. An experienced broker can find the perfect policy that meets your coverage needs and your budget.
At Principled Life, we’re not your average insurance brokers – we pride ourselves on transparency we and our commitment to finding the best policy for all of our customers. If you’d like to talk to one of our licensed life insurance brokers about your burial insurance options, or if you have any questions about life insurance in general, please give us a call. We’re happy to help, Wondering Widower.