Final Expense

The life insurance nobody wants to talk about—including me.

Taking care of our families when we are no longer here to do it is one of our most important obligations—and one of the most uncomfortable conversations to have.

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Roderick BondsFinal Expense · A necessary conversation

Life has a beginning and it has an end. Being prepared for both is important. Planning to help put grandchildren through school is enjoyable to discuss. Final expenses are the other side of the coin.

If I could avoid this conversation, I would. You probably would too. But it is too important to leave until the time comes when we can no longer deal with it. I can only promise to approach it with respect, consideration, and concern for you and your family.

— Roderick Bonds

Before comparing policies

Understand the waiting period.

If a company does not ask about your health, there is a waiting period. Always. Two years, sometimes three. If death from natural causes occurs during that period, the family does not receive the full death benefit. The policy returns the premiums plus interest.

There is no such thing as a no-health-questions policy with day-one natural-death coverage. If you see one advertised, something is being left out of the ad.Accidental-death provisions may provide immediate coverage. The policy contract controls the exact benefit.

Types of Final Expense

Three basic forms.

The names sound similar. The health questions, waiting periods, benefits, and purpose are not.

Simplified Issue

No medical exam is required, but the application asks health questions. The answers determine the benefit structure and price.

Level or Preferred: Immediate full coverage from day one, with no medical exam, although basic health questions are required. This generally offers the lowest cost for healthier applicants.
Standard: Immediate coverage with somewhat higher premiums to account for minor health conditions.
Graded Benefit: Pays only a stated portion of the death benefit for natural-cause death during the initial graded period, then transitions to the full benefit.
Modified Benefit: Provides immediate accidental-death coverage, but natural-cause death during the initial waiting period generally results in a return of premiums plus interest or another limited benefit stated in the policy.

Guaranteed Issue

No medical exam and no health questionnaire. Acceptance is based on age eligibility.

Waiting period: A two-to-three-year waiting period applies. If natural-cause death occurs during that period, beneficiaries generally receive paid premiums plus the interest specified by the policy rather than the full face amount.
Accidental death: Many policies provide the full accidental-death benefit immediately. Exact terms vary and must be read before purchase.

Funeral Plans

A funeral or preneed plan is purchased through a specific funeral provider to fund prearranged goods and services.

Specific arrangements: The plan identifies the funeral home and the services being arranged.
Direct use of funds: The money is earmarked for the designated provider and the specified funeral arrangements rather than paid as unrestricted cash to a beneficiary.

A difficult subject. A necessary conversation.

Know exactly what the policy pays—and when.

Roderick will explain the health questions, waiting period, natural-death benefit, and accidental-death provision before you decide.

Let’s talk about it