In this podcast, I’m going to be discussing the five benefits of purchasing burial life insurance earlier. So yeah, when it comes to final expense, life insurance, early bird gets the worm as they say. And the number one thing that’s going to happen when you purchase insurance earlier versus later, is you’re going to get lower premiums.
One of the biggest benefits of purchasing any type of life insurance product early is that you’re going to get lower premiums, as long as you go with the right insurance companies. But all things considered, the younger you are, the lower the risk of you passing away to the insurance company. And the lower likelihood that the insurance company is going to have to pay out a death benefit, which means you get lower rates. And in so many cases, you’re better off getting your insurance earlier, because you will not overpay in many cases, in that earlier period of time, you will get rates that are so much lower that you won’t overpay that.
And if you get it later in life, you’ll end up overpaying even though you’ve delayed it not paid premiums. So it’s really important, though really important to make sure you select the right insurance company. And that can be very difficult as a consumer, because insurance kind of seems daunting and kind of kind of confusing sometimes. And if you’re not an insurance agent, you don’t know that stuff. To be honest, there’s a lot of new life insurance agents that aren’t even that experienced, they don’t know how to get you the best deal.
So at funeral funds of America, we’re a broker, which means we work with a bunch of different insurance companies, they all have different pricing, they all have different underwriting criteria. They all ask different health questions. And the reason we do that, and we work with so many of them is we specialize in first day coverage or benefits. And what that means is that hypothetically, if your policy were issued, approved and went into force today, say you had a $15,000 policy and you died tomorrow, the insurance company would have to write out that check for $15,000. And, you know, good for your family members bad for the insurance company, right.
But that’s the that’s the risk that the insurance company accepts. And, you know, they know statistically that they know really, very accurately based off the statistics they keep when the average person is going to die, or certainly on a per 1000 People basis. And that’s how they calculate the premiums. And because of that, you get lower lower rates. So it’s always going to be to your benefit to shop early versus later. The other benefit of purchasing life insurance early or not on number two topic is guaranteed coverage. Now, this is really important, because you know how I feel about guaranteed issue life insurance, I’m talking about guaranteed coverage.
Guaranteed coverage means first day coverage, that means you get covered from the very first day, there’s no two year waiting period, your policy, God forbid, you die sooner than anybody expected your policy is going to pay out. We do not recommend two year waiting period plans, they are just so much more expensive in many cases are going to be around 200% plus or minus 200% more expensive in some cases than our lowest price first day coverage plan.
So you absolutely want to avoid guaranteed issue, life insurance, but definitely go with guaranteed coverage that comes with first day coverage plans. Now, there’s some companies out there that only sell their own products. A lot of those companies are those plans with two year waiting periods. You know, a lot of them you see on TV, you know, they’re like 990 Something plan and it sounds so good. And Marge, we’ve got to get insurance right away. And and, you know, then then the guy comes on and says hey, you can get this insurance only 990 something and you know, it looks good, you got to do it.
And you’re led to believe that you’re probably going to get 20 30 40 $50,000 with the coverage. And the fact is, is in most cases in so many cases, one unit of coverage might be four or $500 You know that’s not enough to pay for a burial or cremation or anything like that. Much less, you’re going to overpay, almost 200%. And there, you’re going to overpay every single month for the rest of your life. And they’re gonna suck you with a two year waiting period. So yeah, guaranteed coverage I’m talking about here’s firstly, coverage, that’s what we specialize in funeral funds in America.
The third benefit of purchasing burial life insurance early is peace of mind. You know, anybody who gets this insurance or considers this insurance wants it for one reason, they just don’t want their family members or loved ones or children to be burdened in any single way, especially at the time of their death. Because here’s the deal, everybody’s going to die, everybody knows they’re going to die.
So just take care of this. Because if you don’t take care of this, your children, your family members, they’re going to worry about how they’re going to pay for this when you do die. And that’s just a terrible legacy to leave behind. You know, your expenses, your financial responsibility, making somebody else pay for that, because chances are your family members and children and friends aren’t going to have that money to pay for your burial or cremation in so many cases, they’re going to have to put it on a credit cards, and they’re going to be paying 26% interest. And they will likely be paying on this years and years and years. And that’s just not the loving thing to do.
If you love and care about your family members and children, you know, don’t place a huge financial burden on them without their knowledge, and then throw that financial burden. And it’s a time in their lives, when they’re dealing with your loss and trying to come to terms with what their lives are going to be without you. And then, you know, then on top of that, they’ve got to figure out how to pay for everything. So peace of mind is such a huge deal. And if you just get this insurance earlier versus later, you’ll get better pricing, we can pre shop all the different insurance companies for you. Even if you’ve gotten health or medical issues, 90 to 95% of the time, we’re able to get you first day coverage or benefits.
The fourth topic today in purchasing the benefits of purchasing burial life insurance earlier is it’s easier to qualify. Typically, the younger we are the less health problems we have. As we get older, our bodies tend to break down and, you know, time, time stop for nobody. But yeah, the it’s easier to qualify number one, because because your age, some insurance companies have age requirements that you have to fit in. And if you’re over that age requirement, you won’t qualify. And then all of the first day coverage plans out there are going to ask health questions and they’re going to, you know, as we get older, we know we’re on more medications and stuff like that.
So the companies that we work with, like the high blood pressure, the cholesterol, the diabetes, you know, all of that stuff’s okay for first day coverage, and even like, past heart attacks, and stents and cancer and stuff, as long as it’s been a specific period of time, and that depends on each insurance company. But as long as it’s been a specific period of time, you can still get first day coverage. And we just do not encourage people to get to your waiting periods automatically. If you qualify for first day coverage.
100% Do not settle for a two year waiting period plan, you’re gonna have a two year waiting period, you’re gonna have to overpay on a monthly basis, you will overpay every single month for the rest of your life. And you’re in you’re just it’s that that two year waiting period. Nobody knows when they’re gonna die.
And, you know, we’ve heard of people dying one day before the two years ended up so like two years minus one day they die. No insurance company’s not going to pay for it. They will not pay for it just return premiums plus an interest payment on top of that. So yeah, just get this insurance earlier. I know. So I know. So often people are busy living that they don’t think about dying, but you know, consider the dying is just as much a part of life is living so and being born.
So the fifth and final benefit of purchasing life insurance, burial life insurance early is more time to build cash value. So all the whole life insurance plans out there build cash value. And I’d like to demystify that a little bit. I always tell people, you know, if you’re getting a 10 or $15,000 policy or 20,000 There’s never going to be enough money in there to take like a Caribbean cruise.
You’re typically anyway unless you’ve had it like multiple decades and stuff. But that’s really not what this insurance is intended for. It’s not in intended for frivolous things. And, you know, some people you know, the people that get the final expense insurance or are typically on a fixed or limited income, typically Social Security or disability, lower income, you know, they haven’t been able to save up and pay for this burial. So these, these policies make wonderful sense for them.
It’s a way to be responsible and show care and love towards your family members. So they don’t have to pay for this stuff at the worst time in your life. But by the same token, these policies do build up cash value. So you know, worst case scenario, if the refrigerator or the washing machine broke, you may have enough cash value to pull that money out and pay for that refrigerator or whatever the appliance might be. Here’s the challenge, though.
Most of the time, when people are pulling that money out of their policy out of the cash value in the policy, they don’t have the money to pay it back, there’s a reason why they were pulling that money out, they didn’t have it in their their checking or savings account. And if they don’t have that money, Now chances are they probably won’t have that money later.
So what ends up happening is you’ve got a $10,000 policy, and you borrowed 10 $1,000 cash value out of it. If you were to die, now, the insurance policy is only going to pay 9000, right, because you borrowed 1000, they’re not going to pay that 1000 that they lent you out of the cash value. And the challenge with that is if you just go and make your regular payments, say it’s $50 a month, and you don’t, you don’t pay the interest rate, when you actually borrow against the policy, they charge an interest rate, typically around 4%, something like that pretty good rate really.
But yeah, if you don’t pay your regular premium, plus the interest rate, they’re going to start pulling the interest rate out of your cash value too. And that will deduct your policy. And now we’ll pay less than 9000. So it’s $5 Less, now we’ll pay $8,995. And then, you know, the next 1990, and it just keeps going down. So if you do borrow money out of your policy, at least call the insurance company and find out how much that interest payments going to be, at least stay up on that so that your policy is going to have that $9,000. Or if it were a $15,000 policy, it’d be 14,000.
And then, here’s how we recommend using the cash value, we recommend just planning to never do anything with your cash value.
And what we recommend is long as your agent sets the policy up, you can actually have the policy set up. And this is the way we do it. Because it’s a really nice financial safety net for your policy, you can actually set that policy up so that if for some reason there’s an interruption in your payment, like maybe your account info gets hacked or stolen, or, you know, you change bank accounts, change checking accounts, something like that, but you forget to change the billing with the insurance company, the premiums can be deducted and paid out of your cash value. And that keeps your policy in force and keeps it from lapsing.
You do not want to get paid years and years into your policy and have a lapse just because of the banking error or something like that. And that gives you time to to realize, Oh, I forgot to switch the banking over to you know, the new account or the new new bank or whatever it is. And then you can go and take get that taken care of.
And then we always recommend you pay back the premiums because you you know your premiums haven’t been drafted out of your out of your checking or savings account. Right. So always pay that back and get your policy hole so that you’re not incurring those interest charges and you’ll always have that full 10,000 15,000 20,000 25,000 Whatever it is. So I hope that’s been helpful. Five benefits of purchasing life insurance early boy, there’s some legitimate benefits of doing that.
NOTE: Show notes are AI transcribed, so there may be some spelling or grammatical errors.