How Much Coverage Is Needed For Final Expense Insurance? – Podcast Episode 28
In this podcast, I’m going to be discussing how much coverage is needed for final expenses. And I’ve got four talking points here today. Well, let’s start off with number one. It depends on your needs. I mean, most people would say, Well, that’s pretty common sense. But you know, a lot of people that we talk with, you know, they’ve been so busy living their lives that they haven’t thought about dying. And what what often happens is somebody close to them passed away. And they did some self reflection. And they said, Oh, my gosh, if that were to happen to me, my spouse or partner, or my loved ones, or my children or my family, they would be in dire economic stress, because they don’t have the money to pay for this, and I don’t have the assets or, or the savings or anything.
And, you know, so I just want to make sure that, you know, they’re taken care of, now to make sure they’re taken care of, you got to kind of know what’s going to happen after you pass away. Typically, that’s going to be one of two things, either a burial or a cremation. So if you’re going to get cremated, the average cost of a cremation in the United States, right now is between 1000 to $2,000. That’s if you just get cremated, and they they put your remains in a cardboard box or an urn, and send you home with somebody. Now, if you’re going to have a cremation and a ceremony, you know, probably on average would be 3500 to $4,500. But we’ve seen it go a little bit higher. If you just live in a part of the country, that’s more expensive. But on average, that would be okay. So typically what we would recommend for a cremation where you just come home in that cardboard box and earn is somewhere between 5000 to $7,000 worth of coverage.
Now you might be going well, well, Randy, you know, the cremation is only 1000 to 2000? Why do I need 5000 7000? Well, if you’re 60 years old, you probably probably hoping to live another 10 years or 20 years or 30 years. And we know that price goes up, that’s going to be our number two talking point, by the way, inflation. So we just want to make sure that you get enough coverage so that it not only pays for it now, but pays for it later. And for a cremation where you’re gonna have some sort of a ceremony, we typically recommend somewhere between 7000 to 10,000. And then for that burial, the actual cost right now is probably around $10,000. But we know it’ll get more expensive later in life due to inflation. So typically recommend somewhere between 10 to 20,000.
Which brings us to our number two topic, which I’ve kind of jumped right into is adjust for inflation, right? Because we know that, you know, a gallon of milk 20 years ago is always less expensive than it is now gas was less expensive, you know, 15 years ago than it is today, houses were less expensive 10 years ago than they are today. We know that the prices go up over time. And we just want to make sure that, you know, if you’re 62, and you’re a female, you know, you’d probably average making it to age 82. You know, on average, you could make it longer could make it shorter. But that’s 20 years. So 20 years worth of inflation.
So I The purpose of this podcast is not to go into inflationary numbers and saying, Hey, if I lived 10 years or 20 years or 30 years, how much do I need, we can do that one on one with you over the phone. Because you know, it’s going to depend on the insurance company that’s going to accept you have the most likelihood of accepting you. And then of course, we’re going to be shopping for the company that’s going to get you the best pricing to the WWE, but but also I will mention one point that if if you’re on a fixed or limited income and all you can afford, like say you wanted to Barrow if I was you could afford was $10,000 Right now, and we know that that’s the average cost of a burial. And that’s not going to inflation proof your plan in another 10 or 20 years. But if that’s all you can afford, go ahead and get that coverage right now because it’s going to number one cover the most immediate needs. None of us knows when we are going to die. So if you died, you know, a month from now that would take care of everything. But also it’s a good foundation to for that coverage. And it locks you in at your youngest and At earliest age, so if you’re 62 years old, and you get $10,000, that locks in your your rate for a 62 year old for the rest of your life. And then if you need to, at some point in the future, you can always add in more coverage, just give us a call, even if you’ve got an existing policy with somebody who we didn’t help you with, give us a call, and we can help you out coverage.
Our number three point today in how much coverage do I need for final expense insurance is consider all expenses. So certainly the number one thing you want to cover for sure is going to be that burial or cremation. That’s kind of rule number one. But, you know, typically, when most people pass away, there’s there’s some medical bills there, you know, if you, if you had some credit card bills that you hadn’t paid off, or, you know, some other outstanding debts, and even covering for some legal fees that we know are going to happen, because, you know, holy cow, it’s hard to hard to wade through all the rules and regulations and everything and make sure that everything’s handled correctly, sometimes without getting sort of some sort of lawyer or legal counsel or something like that, just to make sure things are done, right. So often, it’s wise to include some extra coverage in there. And, you know, that could be anywhere from maybe just depends, you know, medical bills, you never know about those. But, you know, we can help you understand your options based off where you live in the United States and just kind of help you understand what’s going to be a good round number. And we can run that through some calculations to give you an idea. And then and then that’s it’s your decision from that point whether to get that much coverage, or just to get some some coverage in place immediately and look at adding more coverage later.
The fourth top talking point on how much coverage is needed for final expense insurance is just consider your current assets or obligations. So sometimes people have the money to pay if they were to die right now. So let’s say you’re you’re 75, and you’ve got $10,000 in savings. Well, that’s enough to take care of things if you died right now. But, you know, what we’ve seen time and time, again, is that people had been responsible, they had that money in place, until they got a sickness or an illness. And then to get well, they drained those reserve funds. Now, that’s what that money was there for. But now you don’t have any money to pay for your final expenses or your burial. And also, if you have those health challenges, probably now you may not qualify for first day coverage at the lowest rates. So now you’ve drained your money. And now you don’t have this insurance and there’s there may be a chance that you don’t qualify for first day coverage, which is going to put you into a two year waiting period plan, there’s going to be in some cases 200% More expensive than that first day coverage. So even if you’ve got those assets, as we get older, those assets get depleted.
And the other thing is, you know, even if you have physical assets house or property or something like that, those take a long time to sell to get that money freed up. And you know, when somebody passes away, there’s a body down at the funeral home that needs to be cremated or buried. And it’s really important that that money be quickly and readily available. And final expense insurance really handles that task exceptionally well. So I hope that gives you some good tips and advice on how much coverage do you need for final expense insurance? If you have any question and if you listen to this podcast, I know we touched on enough different points that you probably don’t have one question you’ve probably got 345, maybe even six or seven or 10 questions, and those are best addressed on a one on one basis. And we can help you understand with our vast amount of experience. What’s going to be the best plan of attack for you. We can lay you out some different scenarios and get you some coverage and quote amounts. And then it’s up to you to decide. But yeah, that will give you a really good head start.
NOTE: Show notes are AI transcribed, so there may be some spelling or grammatical errors.