Life Insurance

Final Expense Insurance
This is an insurance policy in which the benefits of the policy can pay for the Funeral, burial, cremation and other expenses owed by the deceased. To purchase a Final Expense Insurance Policy, an individual must contact an Insurance Company and talk with an Insurance Agent. The Final Expense Insurance is a form of permanent life insurance, which remains in force for as long as premium payments occur, and which do grow in value.

Specifically, Insurance coverage for Final Expense Insurance across the insurance industry ranges from $5,000 to $25,000 as that is the cost of a Funeral, burial or cremation. A few Insurance Companies offer as much as $50,000 to $75,000 for Final Expense Insurance policies, but those are rare. Please note that Final Expense Insurance costs less than a traditional life insurance policy simply because of much lower coverage amounts. The cost will depend on the person’s age at the time of the purchased policy. Age increases the cost.

What is term life insurance?
Term insurance is a form of life insurance that pays out a certain amount of money, also called a guaranteed death benefit, as long as the policyholder passes away during the pre-determined term for which the policy is active.
If the policyholder outlives the initial term of the life insurance that they purchased, they can renew the policy for another term of their choosing, convert the policy to permanent coverage or let the policy expire. So let’s say that you purchase a 10-year term life insurance policy and it expires without you renewing it or converting it to a permanent policy. If you die 11 years after purchasing the policy, your beneficiaries don’t receive a death benefit because you died after the expiration of your policy.

This kind of policy has its advantages and disadvantages. On the plus side, it’s a lot cheaper than permanent life insurance because it is only valid for a set period of time and most policyholders outlive the policies that they purchase. Another benefit for some policyholders is that the premiums on the policy are based on age, health and life expectancy. If you purchase a term life insurance policy when you’re young, it’s not likely to cost you much at all. Finally, many users like term life policies because the premiums are said to be level, meaning they stay the same from one year to the next.

Though life insurance gets more expensive as you age (because your life expectancy decreases), policyholders with level premiums don’t feel this effect as much.

What is universal life insurance?
With a universal life insurance policy, you make premium payments in exchange for a set death benefit. As you pay your premium over time, part of the money goes into an account that accumulates a cash value while earning interest.
In other words, a universal life insurance policy also acts as a savings account. As the cash value grows, you can opt for a lower premium payment using the savings to make up the difference.
How does universal life insurance work?
Universal life is structured to have two distinct components. Part of your premium payment goes to the insurer, contributing to your death benefit and administrative costs. Another part goes into a savings vehicle that earns some type of interest. You have a few options of what to do with that money as time goes on.