Final Expense Insurance is the recommended life insurance for seniors. It is designed to cover the burial or cremation expenses, funeral expenses, and other end-of-life expenses.
The coverage can be smaller to fit in the budget, and it is guaranteed to stay affordable due to fixed payments and benefits. Additionally, it is guaranteed to stay in force until the end of life.
Final Expense Insurance is non-medical and may be guaranteed acceptance. The claims are also processed quicker than other types of life insurance.
The financial ratings of the companies are important factors to consider, as companies have to stay solvent for many years in the future in order to pay the full benefit.
The customer experience is multi-faceted and involves the following main aspects:
(A) Premium: the lowest the better
A lower premium means a higher coverage for the same money.
(B) Application process: the easiest/safest the better
The application process is very important. It may be complicated to find an email to read disclosures and signing a document electronically. It requires a reliable internet connection and emails often go to spam folders. Some applicants have a very difficult time reviewing and e-signing the application.
The feeling of safety on an application by phone is achieved by limiting the amount of personal information provided on the first part of the call and the credentials provided through text messages, emails and websites.
On the first part of the call the applicants talk to their licensed agents and answer a few health questions. The agents qualify them according to their health class and present the companies with the lowest rates.
On the second part of the call the agent add the company to the call in a conference, and they finish the application directly with the insurance company.
Most insurance companies are very reputable and many are more than 100 years old. Their financial rating is public information and the most popular rating is the A.M. Best.
- Best: phone application with voice-signature
- Second best: Online application (filled up by the agent) with voice-signature
- Third best: Online application with e-signature (requires email and internet connection)
- Worst: Paper application
(C) Underwriting process: immediate-approval is best.
As I mentioned before, final expense insurance is non-medical. However, in order to qualify for first-day coverage and lower rates, the applicants need to be approved for that rate class. Every insurance company uses the MIB (Medical Information Bureau) and other sources to evaluate the prescriptions and medical diagnosis. This process may take from a few seconds (with companies that use automated systems) to a couple of days in others.
- Immediate approval
- Underwriting review with approval within a couple of days
- Underwriting review with additional questions
(D) Features and riders: some companies offer free additional features and/or very convenient riders.
- Living benefits: access to most or all benefit if diagnosed as having 12 months or less to live
- Additional accidental insurance
- Child or grandchild coverage
- Disability waiver
(E) Forms of payment accepted.
The best way to set up a life insurance payment is through a bank draft. Credit cards and debit cards get lost, which requires paperwork to update the payment information with the insurance company. Sometimes the stopped payments may go unnoticed for a couple of months and premiums may pile up and policies may lapse.
On the other hand, there are some seniors that don’t have a bank account. They simplify their finances by closing their bank accounts and getting a direct express debit card, where social security or disability are deposited. Additionally, there are some flexibilities that some companies offer that can make it easier for the insured to stay current if they have a bank account.
- Social security billing, which guarantees that the policy will always be current.
- Some companies accept direct-express card
(F) Customer service.
Some companies answer the call in a shorter time than others, and/or require less paperwork to make updates on your policy.
Based on customer experience, the top ten companies are:
|Carrier||First-Day Coverage||Partially First-Day Coverage||Guaranteed Acceptance|
|Family Benefit / Trinity Life||X||X|
|Royal Neighbors of America||X||X|
|Mutual of Omaha||X|
|American General – AIG||X|
|Guaranteed Trust Life||X|
|Sentinel Security Life||X||X|