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March 14, 2013

As an insurance agent, I tend to buy many of the same policies that I sell to my clients. That’s because having hundreds of clients has put me in a rare position to actually see these policies come to rescue for many people.

Several years ago our agency began offering an affordable cancer insurance policy. Three of the people who purchased this policy contacted me within a year with news that they had been diagnosed with cancer. I helped these clients submit their claims and then watched as the policies poured out thousands of dollars in benefits at a time when my clients needed it most. I quickly purchased a cancer policy for myself and my family.

However, final expense life insurance was the very first type of life or health insurance that I bought for myself, and I purchased it age 21, long before I became an insurance agent. I had just graduated from college and had thousands of dollars in student loans to pay off. Though I started a good job right out of school, my family knew it would take me many years to pay those loans off. In the meantime, my parents were at risk of assuming those loans if anything should happen to me. A final expense policy was the perfect affordable solution.

Final expense is a type of whole life insurance. Whole life, by definition, covers you until the end of your days, or until you turn age 100, in most cases. This means the policy actually accumulates a small cash value over time, but most importantly, the policy doesn’t expire as long as you continue to pay your premiums. My mother was savvy enough to know that buying insurance when I was young and healthy was important, because you never know when that might change. My premium was $25.45/month for a $25,000 death benefit. I know the amount by heart because nearly 20 years later, that same premium is still being deducted every month from my checking account.

Some years after I purchased the policy, I added a term life insurance for a larger amount to help pay off my mortgage if something happened to me. I also purchased a key man life insurance policy that pays proceeds to my brother. In the event of my death, he can keep the agency afloat with the proceeds until such time as he can find someone qualified to replace me. During all those years, however, I never once considered cancelling my final expense policy, and that’s because it’s the one policy that will absolutely still be with me when I pass away. It has no term limits.

final expense life insuranceHaving a burial policy means that I can rest assured that my wishes will be carried out upon my death. I’d like to be buried in a cemetery in Michigan where my grandparents and other family members have been laid to rest. I don’t have to worry about where I’ll be when I die or if I will burden my family with unnecessary expenses, because I’ve got a policy that will pay to repatriate my body to the location of my choice.

Many final expense policies have a feature in which your beneficiary can sign over the policy to your funeral home. This removes all the hassle and strain of them having to pre-pay burial expenses while waiting weeks for a term life policy to verify death before paying benefits. Having a policy like this gives you the peace of mind that should anything happen to you, your family won’t be strapped for cash when trying to make decisions on funeral expenses at a time when they are already emotional and grieving.

Another great feature of some final expense policies is the ability to buy more insurance at certain regular intervals in the future with no underwriting. My current policy allows me the opportunity every 3 years to buy more whole life insurance regardless of your current health. Having bought my policy when I was 21 has enabled me to increase my benefits over the years without any concern that I might not qualify medically for insurance.

A good friend of mine in the industry sells final expense policies, and a few years ago he was meeting with a longtime client for an annual review. The client disclosed that he had just been diagnosed with stomach cancer and had less than 6 months to live. My friend saw that he was in his enrollment window for his existing final expense policy. He assisted his client with purchasing $50,000 of additional extra life insurance for his family. The client passed away 4 months later, knowing that his family had more than enough funds to pay for his last expenses.

To be sure, one can easily become “insurance poor” if you buy any and every type of insurance that comes your way. However, a good final expense policy is one that you know will actually pay benefits one day. There are no expiring terms or special health conditions required to activate the policy. It will be with you for all of your days, and then some days beyond that to take care of your family. Affordable and simple, it’s one type insurance I couldn’t live without.

Author's Bio

Danielle Kunkle is the co-founder of Boomer Benefits, an insurance agency specializing in Medicare insurance products and final expense policies for seniors.

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