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In This Article I’m Going To Talk About The Difference Between Pre-Need Insurance And Final Expense Life Insurance
NOTE: Learn the difference between pre-need funeral insurance and final expense life insurance in my new video below.
Here’s An Overview Of Today’s Topics:
- Final Expense Insurance
- Pre-Need Insurance
- Which Is Best For You?
- Burial Insurance Rates, Age 40 to 90*
Final Expense Insurance
First of all, let me talk about final expense plans.
Final expense plans are typically whole life insurance. This means the rates never go up and the overage never goes down or cancels because of age or health.
Sometimes whole life final expense plans can either cover you immediately or make you wait two years before the full coverage is in effect. It just depends on what kind of health you are in.
The benefit to using whole life insurance is that we can design a plan for coverage as low as $1,000 all the way up to $50,000; you just tell us how much you want. You can use that money to pay for any final expenses (the services you buy at a funeral home), and you can give anything left over to your survivors. Also the premiums tend to be pretty competitive.
A pre-need plan is something specifically sold by funeral directors at the funeral home. A pre-need plan pays for whatever you want in your funeral with the funeral home named as the beneficiary. You select the items you want, and they quote you on a price.
The pre-need plan takes the premiums that you pay and adjusts for inflation to pay for the cost of those funeral items. To put it succinctly, pre-need plans prevent you worrying about a casket going from $2,000 today to $24,000 twenty years from now. The idea behind it is the policy takes care of any kind of inflation on the cost of the goods that you’re buying.
The downside to a pre-need plan is that it can get pricey. If you can’t afford a large premium, you’re probably not going to want to do a pre-need plan.
You’ll pay in a large amount for a long time and probably run into the situation where you can’t afford to continue paying it. This is particularly important for people who are on a very fixed income. They don’t have the means to keep up with payments of $100 or $150 a month per person.
Additionally, people with low incomes often take the longer pay-out period. This means they actually end up paying in a tremendous amount more than the amount of coverage they bought. For example, I’ve seen many plans where the death benefit is $8,000, but the total premium paid in over a ten-year period is $15,000-$16,000.
They’re paying double for the amount of coverage they’re getting. They have insurance though, and if they die before that, it will pay. So it’s not that it’s a bad thing, just costly. If you’re on a limited income, you will struggle to afford that.
Which Is Best For You?
Instead of a 10-year plan you may have to give up, you may just need something less expensive. Many times it just comes down to price. There are final expense plans that provide the same amount of coverage as a pre-need plan for a third of the cost.
Burial Insurance Rates, Age 40 to 90*
Rates For $5,000 In Burial Insurance
Rates For $10,000 In Burial Insurance
Rates For $15,000 In Burial Insurance
Rates For $20,000 In Burial Insurance
Rates For $25,000 In Burial Insurance
*Burial insurance premiums are subject to underwriting, based on rates as of 8/20/2018, from state-regulated life insurance companies offering final expense burial whole life insurance protection. Understand that in order to potentially qualify, you must submit an application to see if you’re eligible. Rates are subject to change. Give Buy Life Insurance For Burial a call at 888-626-0439 now to see what program you may qualify for.
If you’re just wanting to pay for your burial, pre-need plans are great as long as you can afford them. If I had a lot of money and was planning ahead, I would go to the pre-need plan. For those with low income, I strongly encourage you to go a different direction. I’ve seen it time and again. People lose their plans because they’re paying too much into it. I would get an affordable final expense whole life plan that would easily cover that.
If you are interested in finding out more about your options for final expense insurance, I encourage you to call me or shoot me an email here.
I will be happy to give you a quote and see if I can help you.