Is Final Expense Insurance Permanent?
Consumers who want to protect their loved ones by having insurance that pays for final costs are searching for affordable options with reliable benefits. Final expense insurance is the perfect choice for these consumers, because it provides funds for family members at a very difficult time. With this specialized type of insurance, the covered individual's final costs, such as funeral and burial expenses, will be covered by the policy. If you are searching for this type of coverage to protect those that you love, you may be aware of all of the benefits that final expense insurance provides. However, perhaps you did not know that you can purchase a policy that is permanent, which means you will have insurance that builds cash value as you pay your premiums.
How Permanent Insurance Works
Final expense insurance typically is available for individuals age 40 to 85, though each insurance company has various age requirements. This type of insurance is often less expensive than other varieties of term and whole life insurance, and is also usually less difficult to purchase because a physical exam is typically not required of the applicant. When a permanent policy is selected, it is paid for with premiums until the age of maturity, which also varies depending on the policy selected. For example, some policies mature as soon as age 80, while other may be in force until age 100. Once a permanent final expense insurance policy is purchased, the insurer cannot cancel it as long as the insured pays the premiums on time.
A permanent final expense insurance policy builds cash value as the insured pays the premiums. The premiums vary depending on the value of the policy. For example, an individual who is seeking this type of policy may only need $2,000 worth of coverage. Or perhaps he or she may want to provide extra money for loved ones for other expenses, and may select a $50,000 policy. The amount of the coverage selected will determine the amount that must be paid in premiums.
Benefits of Permanent Insurance
Some of the benefits of a permanent final expense insurance policy are that it gains cash value as each premium is paid, and the premium amounts will decrease in price as the policy amount is paid. Some policies may even be paid in full over time. When premiums are paid on permanent insurance, the policy will gain value over time, and provide an amount that is tax free to the insured's beneficiary or beneficiaries.
Another benefit of permanent final expense insurance is that as it is paid for in premiums over time, the insured can borrow against the cash value. This benefit can come in handy in a time of financial need. However, for optimal coverage amounts when loved ones need money for final expenses, it is best to avoid borrowing against a permanent insurance policy if possible. Leaving the policy in tact will maintain its value for future needs.
Permanent final expense insurance is an ideal type of policy for older individuals who might not be able to get other types of life insurance because of health concerns. This type of insurance also offers a great way to supplement other varieties of policies in an individual's insurance portfolio because it is valuable and will help family members have access to the money they need for final costs. The value and peace of mind that a permanent policy offers is worth the cost so the insured can stop worrying about expenses that are left behind and instead direct his or her attention to life and enjoying time with loved ones.