What is the cost of ultimate expense life insurance?
Life insurance prices climb as we age, and as we age, our health often deteriorates. When combined with the fact that no medical exam is required for final expense insurance, the cost for individuals who purchase it is significantly greater than for other types of life insurance. For example, a 60-year-old male can pay roughly $170 monthly for a $25,000 guaranteed issue whole life insurance policy.
For around $80 per month, that same male might purchase a 10-year level term insurance policy with a $250,000 face amount. He’d receive ten times the coverage for less than half the expense.
While that scenario makes term insurance appear enticing, keep in mind that it will expire when the insured reaches the age of 70. At that point, the cost of term insurance would be significantly higher, and the insured could have to provide evidence of insurability when applying for a new policy.
Is it worthwhile to purchase final expense life insurance? To answer this question, several others must first be asked:
- How much life insurance do you have now?
- Is the benefit amount sufficient to cover your mortgage?
- Can you afford to pay higher life insurance premiums?
- Do you believe your beneficiary requires a higher death benefit?
- What is your medical history?
- Are you insurable if you must give medical records?
If answering these questions made you feel anxious about the amount of life insurance you have and how much you’d leave to your heirs, you should think about buying last expense insurance. It may give you more peace of mind concerning the financial situation your loved ones will face if you die.
Suppose you already have enough life insurance in effect to pay off all of your debts, as well as enough to cover your final expenses and leave an amount of money for your beneficiary. In that case, you generally don’t need final expense insurance.
We purchase life insurance because we must, not because we choose to. Examine your requirements, and if you’re interested, several respectable life insurance firms will provide you with an estimate on a lesser face amount policy, $50,000 or less, that can supplement your existing life insurance or act as your primary coverage for final costs.
It will be worthwhile if it satisfies your needs and those of your beneficiary, and you can afford it.
