Thursday, October 29
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Final Expense No Exam Life Insurance: Necessary or Not?

Final expense no exam life insurance is a specific type of policy designed for one thing and one thing only: To cover the cost of funeral and burial expenses. For this reason, no exam is required. When an exam is required as part of the life insurance application process, approval can take 4-6 weeks. When there is no exam, approval can be immediate or take just a few days. When dealing with a life insurance policy whose sole purpose is to cover funeral costs, no one wants to wait weeks on end for approval.

Who is Final Expense Insurance For?

Final expense insurance is usually purchased by older people who have been denied coverage from a traditional policy. The fact is, standard term policies offer higher coverage and better premiums than final expense, but the other fact is that some people simply can’t qualify for term. For these people, final expense no exam life insurance may be the only way to ensure that their loved ones don’t get burdened by costly end-of-life expenses. For those concerned about the cost of final expense life insurance, you can get a free quote here.

No Medical Exam Required

As a type of whole life insurance, final expense doesn’t have an expiration date. The policy is valid until the death of the policyholder (as long as they’ve paid the monthly premiums). However, unlike traditional whole life insurance policies, the final expense does not require a medical exam. This means that you can skip the blood tests, urine samples, the half-hour appointment, and the general inconvenience. The lack of a medical exam means several things for a life insurance policy:

  • Approval is easier
  • Approval is quicker
  • Premiums are higher because the insurance company has no way of assessing its risk

Types of Final Expense No Exam Life Insurance

There are two main types of final expense life insurance: simplified issue and guaranteed issue.

Simplified Issue

Simplified issue life insurance can be sold as term or whole life insurance, depending on the carrier. It’s ideal for people who may not be able to qualify for a traditional life insurance policy but are not considered uninsurable. The application process includes answering a few health questions, but there are not as many questions as a traditional application and there is no medical exam.

Guaranteed Issue

Guaranteed issue is a type of whole life insurance that can be sold as final expense insurance or as general life insurance. The application includes only a few knockout questions to make sure that the applicant doesn’t have a terminal illness. If they don’t and are also under the age limit (usually 80 or 85), they are guaranteed approval. This type of life insurance is primarily for high-risk people who would not qualify for any other type of life insurance. It’s more expensive than a simplified issue and coverage usually goes up to $25,000.

Using Final Expense Life Insurance

The purpose of final expense life insurance is to cover the costs of a funeral and/or burial. While the beneficiary is not legally required to use the funds for that purpose, if they don’t, they will be going against the wishes of the person who purchased the policy.

If you want to purchase final expense insurance, you can take the following precautions to ensure that the death benefit will be used for its intended purpose.

  • Choose someone you trust as the beneficiary
  • Name the funeral home as your beneficiary
  • Write down your final wishes so they are clear

Benefits of No Exam Final Expense Life Insurance

Final exam life insurance may not be everyone’s first pick, but circumstances sometimes dictate that it’s their only one. However, just because this may be your only option doesn’t mean it doesn’t come with benefits.

  • Less costly – A final expense policy might be more expensive than other types of life insurance when it comes to the amount of coverage you get for the premiums you pay, but since the coverage doesn’t go that high, your premiums won’t be through the roof.
  • Focused death benefit – The death benefit from traditional life insurance policies can be used for any number of things, but the death benefit from a final expense policy ensures that it will be used to take care of your end-of-life needs respectfully.
  • Online application – You can apply for final expense insurance entirely online and get approved immediately

Disadvantages of No Exam Final Expense Life Insurance

The main disadvantages of this type of life insurance are the limited coverage and the relatively high cost for what you are getting.

For these reasons, the final expense is usually only purchased by people who cannot qualify for a traditional type of life insurance.

Deciding if No Exam Final Expense Insurance is Right For You

The question of whether a final expense no exam policy is right for you is only something that you can answer. Only you know your specific health situation, finances, and the financial situation of your loved ones. Armed with knowledge, you can look into final expense policies offered by various carriers, see what the best deal is, and decide whether it will serve your particular situation.

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