It’s actually – THE OPPOSITE – If you are between the ages of 45-60 years old and you are healthy, then no advisor, agent, company or broker should be pushing Final Expense or Burial Insurance on you.
Final Expense makes NO SENSE and is NOT in your best interest.
In the most simple terms, final expense insurance was designed as the last opportunity for people over the age of 50 to get life insurance. That is a half-truth, the half-truth is that too many healthy people are getting sucked into the Final Expense insurance trap, especially when far better options are available.
Final expense policies are VERY LOW face value policies and are expensive, dollar-for-dollar far more expensive compared to term policies. Final expense insurance is designed specifically for just that, final expenses (cremation, funerals, etc), a few months of bills, and maybe a couple of dollars left over – AND THAT’S IT.
For some people, that is all they want and need – and that is great. For others, though, they may have different wants and needs and final expense may not meet those needs.
There are people that purchase final expense without the knowledge or information that there are MUCH BETTER options available for the same payment – Is this you?
That is why you are here and what we are going to talk about!
Please, take a minute to watch the video below or listen to it as you continue reading the article.
I would recommend that IF you are healthy, between the ages of 45-70, and looking for life insurance (final expense or whole life) that you put forth some due diligence and understand your options. You can also find a trusted advisor and ask them to help you evaluate your options. The facts are that you DO HAVE OPTIONS, you just need an advisor to help you identify those options.
WITHOUT EXCEPTION there are MUCH better options if you are healthy, between the ages of 45-60, and looking into (or recently purchased) final expense life insurance – PERIOD, END OF STORY – DO NOT LET ANYONE TRY TO CONVINCE YOU OTHERWISE.
Sorry for the screaming (capitals) however for me, this is a sore spot for these reasons;
I do not know what the industry averages are for final expense policy lapse but I do know that the lesser the disposable income in a household, the higher (MUCH HIGHER) the policy lapse rate is. The reason is that agents, companies and the industry are selling policies with too high of a premium AND consumers do not feel they are receiving a fair policy benefit for that premium.
Truth be told, you can get more benefit and save money – BUT – some companies do not mind if your policy lapses because they have your money and don’t have to pay any claim.
Agents, on the other hand, want to make sure your policy does not lapse for one year, we will save that story for another day though.
Sorry for derailing the conversation, we are very passionate about helping consumers be informed and make the best decisions possible.
Healthy people between 45-60 should be provided advice and options that include both participating whole life and Indexed Universal Life (IUL’s), IUL’s up to age 55’ish.
What is a Participating Whole Life policy? A participating whole life insurance policy is eligible to earn dividends. Generally speaking, a dividend is nothing more than earnings that a company distributes to policyholders. Most mutual companies offer participating whole life insurance policies. Examples include; Foresters Advantage Plus, Mass Mutual, Penn Mutual, State Farm, Securian (Minnesota Life) and more.
As advisors, when we work client cases for Final Expense vs. participating whole life policies, the advantage for a participating whole life policy vs. final expense is between 3-5 times MORE MONEY and MORE BENEFIT for participating whole life.
IF YOU ARE HEALTHY AND 45-60, IT’S FREE MONEY!
Think about this for a minute;
When you purchase final expense (NON-PARTICIPATING WHOLE LIFE), you are exchanging $1 today for in exchange for $1 when you are 100 years old (FYI – For a non-participating whole life policy, your cash value will equal your death benefit at age 100).
As opposed to purchasing participating whole life (dividend-paying policy) where you can expect to get $3-5 for every dollar you put in! NOT ONLY THAT YOUR DEATH BENEFIT WILL BE 3-4 TIMES GREATER AT AGE 100.
We are not going to get into too much detail in this article, please do understand that if you are between 45-55, healthy and a non-smoker and an agent is pitching final expense – THIS IS NOT IN YOUR BEST INTEREST.
Similar to a participating whole life policy, IUL’s will return to you even MORE cash value and grow to an incredibly high death benefit over time, for the same dollars you would pay into a final expense policy. These cases are insulting to the clients, consumers, the industry and every advisor.
If you are between the ages of 45 and 60, are healthy and not certain what are the best options to protect your assets, your family and your legacy, this article was written for you.
We recommend you into a participating whole life policy, the following carriers have the best products in the marketplace.
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