Learn the Pros and Cons of Final Expense Insurance
The starting premium for $25,000 in AARP term life insurance for a healthy 60-year-old female nonsmoker is $32 per month. Yet, they also have entire life insurance.
The same woman would pay $87 per month for $25,000 in ultimate costs of whole life insurance from AARP. Clearly, the cost of whole-life insurance is going to be far higher than that of term insurance. But think about it: If you don’t have coverage at age 80, is the reduced beginning cost worth it? While most individuals survive over the age of 80, it’s not prudent to take that risk when looking for a policy to cover ultimate expenses.
5. It could not be enough to pay for the full price of the funeral
If you purchase burial insurance, the policy will cover the costs associated with your funeral, but it will not make any binding promises about how you want your funeral to go or how much it will cost. Instead, the policy simply gives your loved ones a lump sum of money to help with funeral expenses.
That’s why it helps to use a funeral cost calculator or anything similar to determine how much insurance you need. In the event that your funeral costs exceed the limits of your insurance policy, your heirs will be responsible for covering the difference.
According to the National Funeral Directors Association’s 2021 report, the national median price of a funeral with a viewing and burial is $7,848. The costs associated with cremation are comparable. The cost of a cremation is around $6,970 on average.
6. There is a plethora of deceptive advertising.
Commercials for end-of-life coverage can be seen on TV, in the mail, and on the web. Unfortunately, many businesses often engage in deceptive marketing in an effort to trick and mislead consumers. In the same vein, you may have seen advertisements that read, “Coverage begins at just $10 per month” or “Policies cost just cents a day.”
Their assertions aren’t exactly outright lies, but they come close. For simplicity’s sake, let’s say we’re generating those numbers based on a healthy female age 40 being quoted $2,000 in coverage. Some businesses will go so far as to create promotional materials that make it appear as though their offer is affiliated with a government initiative.
