Final Expense Insurance Demystified

Client Centered

One morning, not too long from now, you will look in the mirror and realize you have come to a place in your life that you once imagined but never thought you would see. It happened in the blink of an eye. As you look in the mirror your mind wanders and you might recall faded ideas of what old age and the Golden Years meant to you. It might have been the nice elderly couple next door that you mowed the lawn for, or how you helped your Grandmother to the dinner table. And now it's your turn.

When you look at your wife/partner you see your best friend and in return, she sees her handsome rascal. Your hair is grayer and your step not so quick and when you look in each other’s eyes you come to the realization that changes have happened and there is an end approaching. No one knows when. You both close your eyes and hope each other will be ok. Some couples will take action to ensure their partners will be ok because hope is not a strategy.

Final Expense Life Insurance is all about making sure transitions happen smoothly.

Depending on your circumstances, you may feel you no longer need life insurance. Your home is paid off and your children are grown and off on their own raising families. Others saved what they could. Others still have no retirement except for their monthly Social Security check. 

Worrying about what might have been “if only” is a ship that has sailed because the past cannot be changed. In the end what matters is making sure that when you pass, your transition is as smooth as you can make it for the people that you care about, that will handle your final affairs, and live on after you are departed.

Final Expense insurance is a good way to do this. But what is Final Expense Insurance? 

Simply stated, Final Expense is a whole life insurance policy purchased by people between ages 55-85. Final Expense is a whole life policy that is permanent insurance intended to last until the end of your life. This policy builds cash value and can be borrowed against in a pinch if necessary. When you are insured by a Final Expense policy from one of the insurance companies that the Buckley Agency represents, you are covered with Living Benefits. If you suffer a heart attack, stroke or cancer and do not die from the illness, Living Benefits allows you to make a withdrawal from the death benefit of the policy in tax-free cash to use as you wish. 

Final Expense is an excellent policy that is permanent in nature that gives your family options when the time arrives.

1. Burial Insurance:

The cost of an average funeral in New Jersey is $10,500 and, while it may sound odd to some, living costs money. When we pass, we leave behind debts we accrue as we live our lives that we pay off from income earned at current jobs or retirement income sources. When we pass, and our income stops, a Final Expense policy is designed to pay for your burial and to tidy up any outstanding debts. 

Client Centered

Like any life insurance policy, the death benefit of a Final Expense Life insurance policy is left to a named beneficiary. As such, it will bypass your will if you have one. This means there is no red tape or delay in getting the proceeds when a claim is filed. The death benefit is paid directly to your beneficiary within days as tax-free cash. This means your surviving partner or designated person can settle your affairs quickly and conveniently.

The best part is this – even if you have the assets to afford your burial, even if you do have a nest-egg, 401K, or other savings why would you spend it down if you didn’t have to? First, your nest egg may not be readily available as cash and could take weeks or longer to convert to cash; Second, the sum of your premium payments will usually never rise enough to be equal to your death benefit. This means that you will almost certainly get more out of your Final Expense policy than you pay into it.

2. Pay Your Monthly Mortgage:

A properly designed Final Expense policy will pay your monthly mortgage payment, taxes, and utilities for a predetermined amount of time, generally 1 to 5 years.

After the passing of a loved one, the bank still expects the mortgage or car payment on a timely basis. I have Customers that have explained to me that if they didn’t have the Final Expense policy I helped them with, they would have had to come home from the cemetery and start packing moving boxes.

When you pass, your income stream usually stops and your surviving Spouse or partner is now faced with one less income or possibly no income at all. Whether it was a job, pension, or Social Security, if there is no additional savings to draw on, then a surviving Spouse or partner who cannot afford to stay in the family home may need to consider selling it. All too often and unfortunately, a surviving Spouse needing to sell the family home feels pressure to get a transaction done and will normally jump at the first offer. The consequence of this pressure means that your Spouse is likely to take an offer below market value instead of a fair price. There are sharks out there that prey on opportunities like this so they can make money. This results in lost equity and less cash in your family’s pocket.

A tax-free death benefit from a Final Expense Life Insurance policy buys time because your Spouse’s mortgage, taxes and utility expenses have already been preplanned. This means your Spouse can remain in your home and live in peace, stress-free while the property is sold. If your adult children are handling your affairs, consider that they have their own lives, younger children and full-time jobs so this extra cash will give them the time they need to handle your affairs in a sane, orderly manner. 

It is here that a Final Expense Life Insurance policy can be a real “life-saver” no pun intended. 

Please contact us at the Buckley Agency to find out more about a properly designed Final Expense policy and how it might fit into your estate plan.

Remember at the Buckley Agency Insurance is Demystified.

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