If you have seen issues for guaranteed issue life insurance, you may think it is too good to be true. How can an insurer hope to profit if they do not require a medical exam or even ask any health questions? Well, I hope you do not spend a lot of time worrying about how life insurance companies make money. Trust me. They have ways.

Guranteed issue, or no questions life insurance, work because they usually use a waiting period instead of health underwrting exams or questions. These means that a terminaly ill person cannot take out a million dollar policy and hope he or she has a good chance of passing that benefit on the the family.

How Long Are Life Insurance Waiting Periods?

Policy terms will vary by insurer, but the insured person may have to survive 24 to 35 months before the beneficiaries will get the whole amount. Before that time, some policies may refund premiums, some may even pay interest on the premiums, and others may pay part of the whole death benefit. It is important to understand these policy terms before you purchase your own life insurance so you know if is a good idea or not.

Learn More About Simplified vs. Guaranteed Issue Life Insurance

You may find simplified issue policies, that do not require exams, but ask a few simple Yes or No questions that do have immediate death benefits.  Learn more about guaranteed and simplifed life insurance here.

Please do not run out to buy the first policy you see on TV either. You can compare no medical exam term life quotes here with our fast and free online quote system!

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Funeral Planning With Life Insurance

I know that it sounds odd to use the word funeral and life in the same phrase, as in funeral life insurance! This product is meant to cover the expense of funerals and burials, which can cost thousands of dollars these days.  It is, actually, a smaller whole life policy that has been designed for this reason, and also designed as an affordable way to plan for funerals and other end-of-life expenses.

Note: More About Low Cost Funeral Life Insurance

The face values vary, but are usually from a few thousand dollars to a few tens of thousands of dollars. It is hard to get exact figures for the average costs of funerals today, but estimates run from $8,000 – $10,000. Besides, other expenses tend to crop up when a loved one passes away. People take time off of work, they may have to travel, guests have to be fed. So it is always better, as in all things, to have more money than you need than less money than you need.

Funeral Insurance vs. Pre Payed Funeral Plans

Sometimes you may also see this product called some other names like burial policies, final expense insurance, or senior life insurance. These different titles all, pretty much, refer to the same product. Another product, called a pre-pay funeral plan, is a bit different.

I am never one to tell people what they should purchase, a funeral policy or a pre-paid plan, but just one to ask them to compare products before they buy! Here, in my hunble opinion, are some advantages of a burial policy.

Advantages of Funeral Life Insurance

• The death benefit is cash for the beneficiary to use as they see fit.
• Many funeral homes will accept an assignment of the death benefit to pay for funeral expenses.
• The family is not locked into one funeral home or company.
• With pre-paid funeral plans, you may actually be paying interest on a loan, so even though you have small monthly payments to make, you may pay more in the long run.

Of course, there are also some advantages to pre-paid plans, but that is not in the scope of this article today.

Sometimes a person will purchase a policy for themselves. An average purchase is probably middle aged and thinking about retirement or estate planning. Sometimes the family will purchase the plan for a loved one. They do this to make sure they can take care of their family member when the time comes.

Find Affordable Burial Policies

Rates will vary by age, general health, and where you live.  Of course, rates will also vary by insurer, and so will the types of plans you can buy!   It is quite easy to compare premiums here: Final Expense Insurance Rates.

Also, if you would like more information, refer to this article: What Is A Burial Policy?

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Term Vs Whole Life Insurance

Many people who are shopping for a life insurance policy are still confused by the difference between whole and term life! This is one fundamental thing to understand in order to purchase the right type of coverage. Lucky for us, it is actually pretty simple.

Permanent Policies

The first type of life insurance was whole life. Sometimes it is called straight or ordinary life. The name pretty much sums up one major difference between it and term. It will cover a person for their WHOLE LIFE as long as the policy is kept in force. There is no expiration date. Most of these policies do say they will remain in force until age 100, or some advanced age like that. At that time, they will pay out the death benefit even if the lucky insured person is still alive.

Whole life policies also can grow a cash value over time. This cash account may be useful too. It means it can be borrowed against, cashed in, or even used in settlement transactions. But of course, these permanent policies are more expensive than term.

Temporary Policies

Term, on the other hand, does have an end date. It may be 20 or 30 years in the future, but the policy will still end. It does not, in general, have any money value beyond pure insurance, and that is only while the policy is still in force. There are some hybrids or additional riders that can change this, but this is generally true.

Which Is Best – Whole or Term?

So you must decide which type of lfe insurance policy would be of more use to you! If you are just trying to cover yourself for a period of time, even if it is a few decades, you will find that term lfe is cheaper! If you want permanent protection, you need permanent coverage. 

 Sometimes you can have it all though. You may choose to buy a larger term policy for your current needs, and then purchase a smaller permanent policy to cover you during your retirement years. That way you won’t have to decide between term or permanent policies!

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