Final expense life insurance is simply a fancy name for an easy-to-qualify whole life policy. You can use this money to cover funeral costs, and other expenses that may arise out of your death. The policyholders of such a policy can access the cash value of the policy for any reason whatsoever.
It can be tempting to think that whole life policies are more expensive than the standard term life insurance. In fact, there is a good chance you will save money on the premium by getting a whole life policy, but the premium amount itself can be quite high. There are two main reasons that one may wish to purchase a term life policy over a whole life.
First, it makes it easier to get your money's worth out of your policy when you decide to quit your job. Term life policies typically have much higher rates of return than whole life policies, which makes them a great option if you have a job that you're planning to retire from. With a whole life policy, your insurance provider would need to pay out premiums on your policy for many years before you have the opportunity to cash it out.
Second, whole life policies are easier to purchase. Once you've purchased a whole life policy, you can get a cash surrender option to get rid of it. A cash surrender option is basically a lump sum that you can withdraw from the policy to cover your funeral expenses. If you were planning on retiring from your job and did not want to buy a whole life policy, then a cash surrender would be ideal.
Another thing that a whole life policy offers is a tax deferral. Most people think that they need to wait until they die to realize a tax deferral, but with a whole life policy, you can build a cash surrender to help offset your taxes. This is also a great way to save money for your child's education or college tuition.
When purchasing a final expense life policy, it is important to be aware of the terms and conditions of the policy. Most policies only cover the immediate family of the insured. In some cases, a spouse may be able to get coverage too.
If the insured spouse's coverage does not cover him or her, then the children may still be covered if the insured is married. This can create a situation where you are left with a family of dependents to care for and the family home to live in after your death. In the case of divorce, the surviving spouse may be able to take ownership of the home.
Final expense life insurance can save you money in the long run if you are unfortunate enough to pass away unexpectedly. It can also be an excellent way to provide for your family after your death. If you are looking for affordable health insurance coverage, then consider whole life.
Whole life has many benefits for those who purchase it. While you don't pay the premium directly to the insurance company, you pay a portion of your medical expenses out-of-pocket. This means that your family is not responsible for paying all of your bills. However, you do pay into the policy as it accumulates over the years.
The policy is generally more expensive than traditional life insurance policy. In some instances, you may have to pay as much as twenty percent more each month if you purchase a whole life policy. However, it is better than nothing.
While these premiums are higher than many policies, the benefits that are provided to make up for the difference. When you pay off your policy early, you would save on taxes, pay less for taxes, and have . . . . . . money available to pay your children's college costs. These are just some of the reasons why so many individuals buy this type of insurance.
Overall, if you are considering buying an entire life insurance policy, there are a number of reasons to consider one. Just remember to read the fine print on the policy and always ask questions before you buy one.