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Article Archive >> Business

Your Insurance Matters: Your Insurance Matters Why Final Expense Insuranc

Your Insurance Matters
Why Final Expense Insurance?
by Shirley R. Lamdan, CLU, Hagerstown, MD

Why final expense insurance? Final expense insurance is life insurance to cover end-of-life expenses. Traditionally, people have regarded final expenses as just funeral and cemetery (or cremation) costs. Nowadays, however, there can be many additional items that need to be paid as well, including medical bills and other outstanding debts (loans, credit card balances, etc.).
Today, retirees have many more demands on their savings than in the past. As a result, sufficient cash to cover all the final expenses may simply not be available. Many factors account for this shortage of funds: the ever-increasing cost of living hits seniors very dramatically; fewer retirees are receiving regular pension checks; living longer can easily use up more savings; higher out-of-pocket health care and long term care costs can drain savings; and fewer seniors have permanent life insurance - once a dependable source of cash.
What to do? Plan ahead and shop carefully for life insurance for final expenses. Consult an experienced and independent insurance professional who will offer you many cost-effective choices -- even if you have health problems.
You don't have to limit yourself to those plan offers you receive in the mail! They can be outrageously expensive and could cost you much more than the options available with an insurance professional.
Another minefield to beware of is the prepaid funeral or burial plan. There are some reputable companies handling these, of course. However, there have also been numerous news accounts of terrible problems involving these plans. Often, as well, the amounts of these benefits can be insufficient to cover typical end-of-life expenses.
Just the other day, a life insurance offer arrived in our mail. My careful reading, including the (many) footnotes, revealed that the insurance rates: were outrageously high (more than FOUR times higher than the average applicant might pay through an independent insurance representative); would increase over time; and were not guaranteed.
The really scary part of this mail insurance offer: the life insurance protection would end at age 80! (Unless, before age 80, I exchanged for another coverage - at even higher premiums.)
PLEASE DON'T ASSUME that if you have health problems that your health issues will block you from excellent product choices. Today, your experienced insurance professional will have many life insurance products available - for everybody. If necessary, the insurance representative will identify several guaranteed-issue life plans for you to compare.
Consider the time you take to shop wisely for final expense insurance as money in your pocket. It is as necessary to shop for this product as you would any other important purchase.
How much final expense coverage is enough? Since there are always more expenses than just a burial or cremation, as we have already discussed, it is best to carry a permanent life plan of $25,000 to $50,000. Shopped properly by an experienced insurance representative, this coverage will definitely be more competitively priced than those mail offers.
Universal life will be more affordable than whole life but many people still prefer the whole life. Make certain, however, that your agent shows you that the permanent plan is GUARANTEED past age 100. The guarantees are what you are looking for.

Since 1982, Shirley R. Lamdan, CLU, of Hagerstown, MD, has been serving individuals, corporations, and nonprofits with independent retirement and insurance services. She can be contacted at 301-791-9427 or 800-628-3449. Her email is slamdan@lamdanselect.com. The website is www.lamdanselect.com.

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