Final expense is a term that we use to refer to costs that come up when a loved one passes away. Of course, this is a stressful time for all of us. But these costs can really add to our normal issues when we have to deal with the loss of a loved one. Some examples of these costs are funerals, burial plots, travel, transportation, hotels, and settling debts.

These costs are not trivial either. An average US funeral can cost $8,000 or more. That is only the burial costs, and does not include other expenses like travel, housing, lost work time, and settling any debts our loved one may have left behind.

About Final Expense Insurance

That is why final expense policies are being marketed by many top insurers these days. It is very common to see ads for them on tv, the internet, or in magazines. These are simply whole life insurance policies with fairly low death benefits ($2,500 – $25,000) that were designed to be easy for older people to apply for and get accepted for. They usually are marketed to people from about age 50 to age 80 (sometimes age 85). So the time to consider these is typically in middle age or retirement years.

Do not just buy the first policy you happen to find either. As with any insurance, not all policies or companies are exactly the same. By finding the right company and type of life insurance policy for you, you can save hundreds of dollars in premiums. Look here for Over 50 Life Insurance Quotes.

If you are looking for life insurance for older people, make sure you know the difference between term and whole life. Also pay attention to the difference between simplified vs guaranteed issue policies.

If you would like to learn more about whole life, consider reading – Define Whole Life Insurance for more information.

Single premium life insurance, or SPLI, is whole life insurance that is funded – as the name implies – with one large premium right up front. This is different than the way we usually think about paying for our life insurane premiums with multiple premiums paid over a span of years, or even a lifetime. For more information, refer to Single Premium Life Insurance Explained.

Aside from the most obvous difference, the way it is paid for, what else is different?

• Because it is funded right away, with that one large payment, an SPLI policy has the potential to build a cash value very quickly. Some policies earn money on the cash portion at a fixed interest rate, and some will be tied to a market index, like the S&P 500.
• The money grows tax deferred. There will not be the need to pay taxes on growth in the account  like you would have to on a regular bank savings account.
• This cash value gives the owner some options. In the future, it could be used as an asset. That means it can be borrowed against, cashed in, or sold in a life settlement.
• So in addition to paying for life insurance, that premium can actually help build an asset that can be used while the owner is alive.
• As for the insurance part, it can be used to turn one sum of money into a much larger estate. Let us say a 65 year old has $12,000 in cash that is not needed to live on. This is just an example, but that $12,000 might be turned into a $100,000 face value life insurance policy. Of course, you understand that actual rates depend upon many factors like the insurer, current premium charts, age of insured, health, etc.

So what’s the downside of single premium life insurance?

Well, of course, the insured person needs to have the money to set aside. If you do not have the cash to fund the policy, that you do not expect to need for several years, this may not be a good option for you. A traditional life insurance policy, and more liquid forms of savings or investments, could be a more flexible and better option in that case.

If a product like this interests you, you can get exact quotes from insurers or agents in your local area. Visit here: Over 50s Life Insurance.

One common thought on the whole term life insurance vs whole life insurance debate is the fact that whole life grows a cash value. This means that whole life has a surrender value, and may even be able to be used in a life insurance settlement transaction. Term lasts for a period of time, and if it is not used, it expires.

But there is one rider (addition) that can be added to some term policies to make them more attractive to consumers who are doing some long term planning. This is called a return of premium (ROP) rider. It costs a bit more, but in return, it will refund all premiums if no claims are made against the policy. This is a way to get one last benefit out of an expired policy – a big check in the mail!

There are some conditions. The policy must be kept in force (paid for) for the term to collect the full benefit. In general, no claims can be made against the policy. i.e. if it pays out a death benefit, it will not pay out a return of premium. Get more information on how ROP term life works.