Life insurance is one of those subjects that can make many of us pretty uncomfortable. We spend a lot of time trying to find ways around it instead of acknowledging the peace of mind it could bring to us and our loved ones. Final expense life insurance may be particularly difficult to talk about, because even though it’s usually less of a financial commitment, it requires you to think about your own funeral directly. Be honest with yourself…have you ever:a. Tried to convince yourself that while you think it’s a good idea for other people, YOU don’t really need to consider life insurance, not even enough to cover final expenses?
b. Purchased some type of life insurance without completing follow-through steps, such as reviewing the policy and claims process with your beneficiary?
If so, you’re not alone…and this blog post is for everyone who answered yes to one or both of those questions. We’re here to share some statistics about how final expense life insurance could be an important component of helping to protect your legacy and your family’s financial security. We’ll also go over a few of the ways you can help make it easier for your loved ones to make a claim when the time comes.
How important do YOU think life insurance is as part of a strong financial management strategy? Most people agree that it makes sense to have life insurance. According to the 2018 Insurance Barometer Study by Life Happens and LIMRA, 90% of Americans say that the primary wage earner in a family should have life insurance. However, of those same respondents, only 68% said that they needed life insurance, and only 59% said they actually have life insurance. What this tells us, besides the troubling truth that 41% of Americans do not have life insurance protection, is that our emotions sometimes get in the way of logic.
Are you retired, or nearing retirement? Are you past the stage of life where you have children who depend on you financially? Maybe you think if you’ve made it this far without life insurance, there’s no real reason to get it now. However, the cost of a funeral can have more impact on your family than you might think, and final expense insurance may be a great option to help cover those costs.
Your love and your legacy
The average cost of a traditional funeral in America is $8,000-10,000. Even if you and everyone in your family are relatively comfortable financially, chances are it wouldn’t be easy to come up with that sum, especially if you were to pass away unexpectedly. Additionally, if there are medical bills or other debts left behind, final expense life insurance may be able to help cover some of those as well.
Because they are designed specifically to cover end-of-life costs, final expense insurance policies are generally much smaller and more affordable than other life insurance policies. Whether your goal is to keep your other financial resources more intact to leave an inheritance or to simply avoid placing the burden of funeral costs on your loved ones, final expense life insurance can help protect your legacy.
While purchasing final expense coverage is definitely a big step in the right direction, there are a few more things you should consider to ensure that you maximize the effectiveness of your life insurance plan.
1. Inform your beneficiary
Naming a life insurance beneficiary is the first step, but you should also TELL that person that he or she is the beneficiary and also clarify how you’d like to be remembered. That may seem like common sense, but there are numerous life insurance benefits that go unclaimed simply because the intended recipient was unaware the policy even existed. If your beneficiary changes (e.g., due to divorce or death), you’ll need to update your policy to reflect that (and of course let the new beneficiary know).
2. Leave instructions
Once you’ve let someone know that they’re listed as a beneficiary on your policy, you should also let them know where any relevant paperwork is stored and give them specific instructions on how to make a life insurance claim if the time should come. For final expense policies, documentation of your end-of-life plans is also a good thing to have. If you work with a financial advisor, be sure your partner (or whoever your beneficiary is) has their contact information.
3. Keep your policy current
If you forget to pay your electric bill, the lights could eventually go out. If you forget to pay your water bill, water may eventually stop coming out of your faucet. If you forget to pay your life insurance premiums, your day-to-day life may not be affected much at all, but if you were to pass away while your policy has lapsed, your family may not receive a benefit payout. Final expense insurance is a type of whole life insurance, so as long as you keep up with your monthly payments, it should still be there to help protect your loved ones when the time comes.
Does all this seem like a lot to process? Don’t worry! The insurance experts at Final Wishes Covered℠ are here to help answer your questions, address your concerns, and guide you in the direction of a final expense life insurance policy that fits your needs and your budget. Visit us today to get a free, no-strings-attached quote, and then come back often for more information and inspiration about life and life insurance!