Category Archives: Insurance

Final Expense Insurance Explained

Final expense insurance is specifically designed to cover all the bills, debts, and expenses that will be left for your loved ones upon your passing. These costs can be quite varied and be anything from funeral cost and burial expenses to medical bills and final debts. Final expense insurance is also known in some circles as burial insurance. Even the most basic funeral can cost your family thousands of dollars. All of the nuances of life insurance can get quite tricky. Let’s go over the main points that you should keep in mind when shopping for life insurance and  make sure we get final expense insurance explained.

The Basics

Final expense life insurance is not the same as “insuring your life.” Insuring your life means that upon your passing, you leave funds for your family that take the place of your income that has been lost. Term and permanent life insurance place a value on your wages as of now and for the rest of your life in order to fill this need.

Funeral insurance, however, is different. The only factor taken into account for the face amount of the policy is the expense of the insured’s desired funeral and other final expenses like outstanding nursing home bills. Many other forms of life insurance can reach face amount values into the millions of dollars; final expense insurance policies rarely go above $30,000.

Why would I need Final Expense Insurance?

There are many different reasons a person would need final expense life insurance. If a person already has term and or whole life insurance policy, then final expense serves a very specific purpose. A final expense policy can be the policy that helps your loved ones pay for final expenses, while your term or whole life policy can afford them a lifestyle in light of your missing income. However, if you have a term life insurance policy and you happen to outlive the policy term, things are quite different. In that case, you may want to consider final expense insurance as a solid backup.

Another scenario could be that your family has access to lots of liquid assets that will aid them once you pass. In this case, you could undergo a process called “self-insurance.” “Self-insurance” is a term that can appear complicated at first glance; however it is much more simple than it seems. To self-insure simply means that upon your passing, the money that you have accumulated will be used for all final expenses and needs.

Would your family be able to self-insure to take care of your final expenses? The average funeral cost $10,000. One thing to keep in mind is whether or not you would like the food services catered after the service. Perhaps you would like your family to take a trip abroad to scatter your ashes in a designated location. It is possible that you would leave a lot of expenses behind. If any of these sound like things that could be of interest to you, then final expense insurance is something you should look into. Another thing to keep in mind for anyone hoping to utilize the lump sum death benefit from Social Security is that it only pays $250 per individual. This is nowhere near enough for any type of burial.

How Much will it Cost?

How much you will pay for your final expense insurance policy will be dictated by your age. Unfortunately, as time passes and you get older, the premium you will pay for your policy will increase. This happens because the older the insured is, the insurance company is closer to having to pay out a death benefit. If you purchase final expense insurance at the age of 45, it will be significantly less expensive than if you purchase the same policy at the age of 75.

Why not just Prepay My Funeral?

Prepaying for your funeral expenses is possible, and many people do this. There are pros and cons that come along with this approach. One of the biggest benefits to prepaying for your funeral is that you have the ability to personalize everything. You also have the ability to reach out to funeral directors and determine which ones you prefer. You have the ability to pick out the perfect casket, and the make a great choice on picking a plot in the cemetery. Most importantly, pre-paying will likely prompt you to initiate a conversation with your loved ones about the choices you have made. This may give both parties more peace of mind in the long run.

States have varying guidelines on funeral pre-payment. These guidelines work to prevent you from paying unscrupulous folks who can take your money and run. It helps protect you or your family from overpaying on top of what you pre-pay. Before you pre-pay, check your state guidelines for how the money will be held until your death.

Make sure that you fully understand the details in the insurance plan you purchase. Be sure to determine whether or not you have the ability to lock in your rate. By doing this, your family will not be stuck with a much higher rate later. When pre-paying for your services, be sure to keep all the proper documentation to prove what has taken place. By maintaining the proper documentation, this gives you and your family the proper peace of mind that things will be taken care of properly.

There are disadvantages of pre-payment for a funeral. One of the biggest problems is that it is less flexible than burial insurance. If you decide to change your funeral arrangements or you decide to move, you and your family may not receive the money back that was already paid. Another negative possibility is that the funeral home could potentially go out of business altogether and there will be no means of retrieving those funds. Final expense insurance has the benefit of providing your surviving relatives with a payout that can be used in anyway and anywhere they see fit. In this scenario, you have much less control; however, your family has much more flexibility in what they choose to do.

The Bottom Line

If you would like your final wishes documented but do not want to commit to any particular funeral parlor, it is possible for you to combine burial insurance with documentation that clearly states your final preferences. You should always have a will, and this document should be kept in the same location for ease of access. This documentation would detail things such as whether you prefer being buried or cremated, and whether or not you prefer an open casket ceremony or a closed casket ceremony.

You may choose to opt for a life insurance policy that will provide for your family after you pass away. You may choose to purchase a dedicated final expense life insurance policy simply to cover burial costs. You may even decide to pre-pay for your funeral expenses. Regardless of your decision, all of these will put you and your loved ones in a much better position to take care of your final wishes. Putting in the effort to deliberate and create documentation to support your end-of-life wishes could be slightly uncomfortable now; however, it will make a world of difference once your time has come and your loved ones are left to grieve and fulfill your wishes.


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Life Insurance and Smoking Cigarettes

One of the most important investments you will ever make on your family’s behalf is life insurance. Life insurance is one of the only ways we have to reassure ourselves that we can still ensure that our loved ones are taken care of in the unfortunate event something happened to us. Although finding life insurance can be an arduous task in and of itself, there are many things that can cause the process to be even more difficult.  For example, life insurance and smoking cigarettes do not mix well.

Studies show that smoking cigarettes drastically reduces our life expectancy and are generally not good for our health. The last 50 years of data make this clear and insurance companies place great emphasis on these numbers when rating for life insurance premiums.

Because of these this, finding quality life insurance coverage at an affordable rate can be an almost impossible task. Life insurance for smokers can range from costing two to four times as much as a comparable life insurance policy for a non-smoker.

Smoking Cigarettes is Expensive!

Smoking is a very expensive habit. If an individual were to smoke a single pack of cigarettes per day that cost $5 per pack, that same individual would accumulate an annual smoking cost of $1,825 to maintain his or her habit. Although it is obvious that this is a very costly habit, there are many hidden costs that make it even more expensive in the long run such as medical problems that must be paid for due to smoking-related complications, higher homeowner’s insurance rates, and higher health insurance rates.

All of these same cost factors come into play when it comes to life insurance and smoking tobacco. An individual who smokes can expect to pay at least twice as much for life insurance coverage than an individual who does not smoke simply because smokers have a much shorter life expectancy than non smokers, and the insurance carrier knows that a payout on the policy is much more likely to occur sooner than on a policy for a nonsmoker. Here we will discuss some things to keep in mind for smokers and recent ex-smokers that could help in finding affordable life insurance coverage.

Even as a smoker and regardless of your health status, anyone should be capable of finding quality and affordable life insurance coverage that will help them and their family in the future. In the event of your unexpected demise, your loved ones would be left to pay for your burial and any final expenses and debts that you may have left behind. Failing to carry the proper life insurance coverage could be one of the worst decisions that you could make for your family. However, it is possible to find quality life insurance coverage that will fit into your budget.

Getting Affordable Rates as a Smoker

The most important thing to know about life insurance and smoking is that you have to find the right company and representative to help you on your journey. Although this is not usually a relationship that consists of daily communication, it is one of the biggest key roles you will need to be filled to help you on your way to ensure you get exactly what you need. One way you could begin your search would be to begin calling life insurance companies in search of quotes. However, there is definitely a better route that could be taken.

We have the means to make it simple for you to reach out to us and receive a large number of competitive life insurance quotes for smokers and ex-smokers to make the search as simple as possible for you and your family. Getting the lowest rate possible is dependent on a variety of factors including lifestyle, coverage amount, age, family medical history such as cancer or diabetes, and any other health factors and pre-existing conditions can also play a role. Another option that could be taken is choosing a life insurance company that does not require a medical exam, however, this will always lead to receiving a higher rate.

The point here is that the key to finding the best life insurance for smokers and ex-smokers, it is of the utmost importance that you get as many quotes as possible and compare as much as possible until your family’s needs and budget can be met.

Best Ways to Save

Reduce the Length of the Term: The factor that could cause you to receive higher life insurance quotes could be the length for which you have chosen for the life insurance policy to last. It is important to find a balance between what you can afford and what term will be most suitable to your family’s needs.

Reduce the Amount of Coverage: One of the first things to keep in mind when attempting to receive a lower rate on life insurance as a smoker or recent ex-smoker is to do an evaluation of exactly how much money you will need to leave behind for your family and for how many years it will be needed by your family in your absence.

The way this is done is by calculating exactly how much it costs to run your household. After this is done, add in the remaining amount of your home mortgage that needs to be paid off by your family in your absence and any other factors including your children’s future college education.

The next step is to create a comprehensive list of all the things that are important to you and your family and find out exactly how much coverage is necessary to see that these things happen in your absence. Also, calculate how long your family would need the money necessary to pay off the remaining debts and any interest accrued by them over time.

Consider Annually Renewable Term: Although this is not a viable long-term solution, individuals interested in life insurance for a short time frame, or for those with a very tight budget may consider the annual renewable term as a viable option. Keep in mind that initially this may be the cheapest option, but over time the rate will increase every year as time goes on. Because of these things, it is better to purchase longer-term or permanent life insurance sooner rather than later.

Quit Smoking: If you plan to quit smoking in the very near future, not only is this the best thing you can do for your insurance rates, but it is one of the best decisions you can make for your family. If this is the case and getting life insurance now is something that you still feel that you need to do, a short-term insurance policy can fill this need. In this scenario, you can get life coverage now and also be able to apply for long-term or permanent coverage when you have completely stopped smoking and receive a much lower rate. Always remember that each year you remain tobacco-free, it will lower your rates more and more as time goes on. Usually, after just one year you will receive a Standard Non-Tobacco Rating with most life companies. Furthermore, after you have gone three entire years without using any tobacco, you will become eligible for the best rates available and not penalized by a smoking history.

In most scenarios, a smoker will have to have been tobacco and nicotine free for a full year to get a non-smokers insurance rate. In some cases, however, a smoker may have to have been tobacco and nicotine free for up to five years before some companies will offer a nonsmoker’s rate. After receiving a nonsmokers rating, the insured is not usually mandated to perform any further testing for nicotine use.

Help is only a Click Away

No two life insurance companies view smoking the same, because of this, the rates an individual receives when searching for life insurance and smoking cigarettes could be wildly different from one another. It isn’t very difficult to see why it is so important for you to get as many quotes as possible from as many companies as possible to find the proper life insurance policy that is going to fit your family’s budget and coverage needs. Our insurance agents are here to help you and your family get the most affordable and highest quality life insurance, because they deserve it. Don’t hesitate any longer on getting the life insurance protection that you and your loved ones need.

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Life Insurance with a Felony Conviction

When applying for fully underwritten traditional life insurance, most insurance carriers are going to inquire about any felony convictions you may have had in the past. It makes sense – if a life insurance company is willing to check your motor vehicle record for your driving behavior, then they would likely search your history for any felonies that may have been committed. These are just some of the things that go into the underwriting process to determine how acceptable a potential insured person will be to purchase life insurance with a felony conviction.

There is one major point that should be made here. Simply because a person has been charged with a felony does not make them a felon. Only if a person has been convicted of a felony are they classified as a felon. The vast majority of the time, the insurance carrier will need to know how much time has passed since you were convicted of your felony charge. Most carriers will also need to know the details of any sentences you were to serve for said conviction. Of all these things, the most important to almost any life insurance carrier will be, what was the nature of the charge and conviction you received.

Insurance Companies look at Felony Convictions Differently

As far as the underwriting process goes, many insurance carriers have very different criteria that are examined and weighed through the process. Each carrier interprets the information they require differently, and many have completely different types of information that is required. Infractions, (whether felony or not) that are most likely to cause problems for a life insurance applicant would be:

  • Larceny
  • Driving while intoxicated or under the influence of drugs or alcohol (1st offense is a misdemeanor)
  • Crimes involving property
  • Drug-related crimes
  • Assault

Because these five crimes make up over half of the current prison population, these are the offenses that pose the greatest concern to life insurance carriers. These crimes, in some cases, are not life-threatening inherently when committed. However, the time that one will spend in prison once convicted could be. Moreover to this point, convictions are much less likely to become a barrier to buying life insurance with a felony when the crime committed is larceny or assault.

Some Good News

The bright side of this story for individuals seeking life insurance coverage that have one or more felony convictions is that not all insurers have the same guidelines. There are some carriers that will offer an individual coverage, however, there are some that will not. That being said, an individual’s first step when seeking insurance coverage should be to contact us and discuss your current situation in order for our licensed insurance professionals to be better able to determine ahead of time which, if any, insurers will be able to offer coverage.

The quality of the insurance professional you utilize is just as important as the insurance carrier you choose to apply to. Submitting a life insurance application with a life insurance carrier that has a track record of denying coverage to individuals with felony records would make no sense. The independent life insurance professional that we connect you with will know exactly who will be your best option when seeking coverage.

The Deal Breakers

Some felony convictions are all but a guarantee that a traditional life insurance company will deny life insurance coverage. These are :

  • Child molestation
  • Drug Trafficking
  • Rape
  • Murder
  • Kidnapping
  • Conspiracy to commit any of the offenses listed above

A conviction for any of the aforementioned charges will result in a declination of coverage from all traditional life insurance carriers. However, individuals in this category will still be permitted to purchase “Guaranteed Issue” life insurance from a carrier and also Accidental Death life insurance as well.

Drug-Related Felonies

Individuals who may have previously made an attempt to obtain life coverage through a traditional life insurance carrier and were denied may still have remaining options that are not simply limited to “Guaranteed Issue” life coverage.Generally speaking, most life insurance carriers will automatically decline applicants that have prior drug-related felonies. However, there are carriers that will still consider offering coverage depending on how the individual may answer the following questions:

  • Have you ever been incarcerated?
  • If so, how much time did you spend imprisoned?
  • How much time has passed since you were charged and then convicted of the crime?
  • How long ago were you released from your last incarceration?
  • Are you currently on probation or parole? If so, for what time frame?
  • If you were on probation or parole, how long ago was it terminated?

The answers given to these questions will be the best determining factors in allowing an underwriter to assess how eligible an individual is for life insurance coverage. The exact nature of an individual’s charges and convictions are important because some convictions have a higher recidivism rate than others. Generally speaking, underwriters use this information about an individual’s criminal record to determine how likely they are to be reincarcerated for another criminal offense.

Be mindful of the fact that being incarcerated is considered a life-threatening circumstance. The amount of time that has passed between the date of application and the date an individual was convicted and or released from prison is the most important detail here. The reason this detail is so important is that the underwriter assigned to this case will want to see exactly how much a potential insured’s lifestyle has changed since they were released from prison.

Felonies involving Alcohol or Violence

Primarily felonies involving alcohol usually are related to operating a vehicle while intoxicated. However, violence related felonies can be just as likely contributed to the use of alcohol.

In cases of this sort, underwriters are on the lookout for at least a two-year gap between the time of conviction and the time of probation before considering the opportunity to offer life insurance coverage. In the event you have been denied life coverage after two years has passed, you have likely applied for coverage with the incorrect insurance carrier and should give our office a call for help.

Challenges Agents Face when You Reveal Your Felony

Good insurance agents know on initial contact that it will take a considerable amount of work to find life insurance coverage for an individual that has a record containing a prior felony conviction. If you take the typical call center agency approach, most likely you will be denied coverage based on criminal history due to the agent not being motivated to spend additional time and resources on your case because it may result in a declination even after the agent has invested the necessary time to properly scout the potential carriers to obtain life coverage for you.

This, however, should not deter you from contacting an independent insurance agent that has access to multiple life insurance carriers and is willing to put in the time, energy, and effort to see to it that you acquire life insurance with a felony conviction.

A knowledgeable independent insurance agent will know after your first conversation if traditional life insurance is the route that you should take, or if a “Guaranteed Issue” life insurance carrier will be more suited to your needs based on your particular situation. Your agent will have the necessary experience and know how to assist in your life insurance purchasing decision to allow you to make the most informed decision possible.

Independent insurance agents that specialize in hard-to-place and high-risk cases appreciate the challenge that comes along with this type of business and are more than willing to represent you and your best interest to block any hindrances and help you obtain the life insurance coverage you need.

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