Should I Get Life Insurance or Final Expense Insurance?

Planning for the inevitable is a crucial aspect of financial management, especially when it comes to ensuring your loved ones are taken care of after you are gone. Life insurance and final expense policies are two common options people consider to provide financial protection for their families and cover end-of-life expenses.

ORCA Life has been in the insurance industry for almost 30 years, and we understand the importance of choosing the right policy for your wants and needs. We have seen it all and have continued to stay loyal to our values of opportunity, responsibility, community, and accountability. With our years of industry experience, we can guide you toward the right policy for you, so you can be confident your loved ones are protected.

Should I Buy A Life Insurance Policy?

Life insurance is a contract between the policyholder and an insurance company, where the insurance company agrees to pay an amount of money, known as the death benefit, to designated beneficiaries upon the death of the insured person. In exchange for this coverage, the policyholder pays a premium to the insurance company during their lifetime.

People purchase life insurance policies for various reasons. Firstly, it serves as income replacement, ensuring that loved ones maintain their standard of living and can cover expenses after the policyholder’s death. Additionally, life insurance helps settle outstanding debts like mortgages and loans, relieving family members of financial burdens. It also covers the cost of a funeral and burial expenses, alleviating the financial strain during a difficult time.

There are many different types of life insurance policies, including term life insurance, whole life insurance, universal life insurance, and more. The amount of coverage and benefit amount you receive will depend on the premium you pay. This can lead to life insurance being a more expensive option for end-of-life coverage.

Life insurance offers financial security and peace of mind, addressing various needs such as income protection, debt settlement, and estate planning. It serves as a valuable tool for protecting loved ones and preserving your legacy.

Should I Buy A Final Expense Policy?

A final expense policy, also known as burial insurance or funeral insurance, is a type of life insurance policy specifically designed to cover end-of-life costs, such as funeral home and burial expenses, medical bills, and outstanding debts. These policies typically offer smaller death benefits compared to traditional life insurance policies, providing a more affordable option for those who still want end-of-life coverage.

Policyholders designate beneficiaries who receive the death benefit upon their passing, which is paid out in a lump sum. This payout allows beneficiaries to access funds quickly and use them to cover immediate expenses.

There are many benefits to a final expense life insurance policy. Firstly, it provides a way to ensure that funeral expenses are covered, relieving family members of the financial burden after the insurer’s death. Burial costs can be significant, including expenses for caskets or cremations, burial plots, and other related end-of-life expenses, and a final expense policy can help ease that burden.

The death benefit provided by final expense policies can ensure that loved ones are protected for your burial expenses. However, there is no guaranteed money after end-of-life expenses are covered. So, while it may be a less expensive option, it does offer less coverage.

Comparison of Life Insurance and Final Expense Insurance

When considering life insurance versus a final expense policy, it is essential to understand your specific needs and financial goals. There are special life insurance and final expense policies for customers who are in bad health or have pre-existing medical conditions. Both types of policies, life insurance and final expense insurance, require an underwriting process, where the insurance company assesses your risk. If they determine that your health conditions pose too high a risk, they may decline to sell you certain insurance policies. However, policies, such as guaranteed issue policies, are designed to provide coverage for individuals who may not receive it otherwise. Guaranteed issue policies allow applicants to waive the medical exam and health questions, however, they usually come with less coverage and higher premiums.

Life insurance provides more comprehensive coverage, offering financial protection for your loved ones in the event of your death. It can replace lost income, pay off debts like mortgages and loans, fund education for children, and provide for your family’s long-term financial security. Life insurance policies typically offer higher coverage amounts and greater flexibility in terms of the type of policy, coverage options, and premium payments. They require a more detailed application process, including a medical exam and health history assessment, and are suitable for individuals who want broader financial protection and investment opportunities.

On the other hand, a final expense policy is a simpler and more focused option specifically designed to cover end-of-life expenses. These policies offer smaller death benefits and simplified underwriting processes, making them more accessible for individuals with health issues or pre-existing conditions. Final expense policies provide peace of mind knowing that your funeral expenses will be covered and that your loved ones will not be burdened with these costs. They are a more straightforward and affordable option for those who want to ensure their final expenses are taken care of without the complexities of traditional life insurance.

Ultimately, the choice between a life insurance policy and a final expense policy depends on your individual circumstances, financial needs, and preferences for coverage and flexibility. It is essential to carefully assess your options, consider your priorities, and consult with an insurance agent to make an informed decision.

 If you have any further questions, please don't hesitate to contact ORCA Life or simply call 844-851-3846.