There are several types of whole life burial insurance policies going by different names. They aim to lessen the financial burdens of your loved ones when you pass away. But when trying to find the best final expense insurance, the last thing you want is more confusion.
So, if you are looking into options like Mutual of Omaha final expense insurance, check out interpretations of Gary P. Cubeta from Insurance for final expenses to understand how they work.
Basic Information About Burial Insurance
Sometimes, many pre-paid arrangements named as burial insurance are not what they claim.
Final expense insurance is for people above 55 years of age. This age restriction depends on the company you choose and these policies cover the costs of funeral services and other merchandise after your death.
Features of burial insurance:
- Limited underwriting
- Guaranteed qualification
- Low death benefit
You can pay the premiums in a lump-sum or choose weekly or monthly payments. Most policies do not need a medical exam, but you should answer some health-related questions.
All these features may not be available with prepaid products that funeral homes sell. Furthermore, even with final expense insurance policies, several factors can affect your eligibility and premium.
What Factors Affect Your Rate?
Like most market instruments, insurance policies have no single plan that fits everyone. However, they also work for profits, and so, the companies would like to minimize risks. Since there is no in-depth questionnaire or medical exam, premiums tend to be more expensive.
Some factors and living habits that can affect your insurance are:
Burial insurance is usually available for ages 50 and up. So, you can say that these policies are available for older persons. With age, there will be some health complications, and the risk of death is higher.
If a younger individual takes out insurance, the provider is less likely to pay up soon. That means their risk is also more. Hence, the older you are, the more premium you pay.
Per studies, women outlive men, and hence, they have more odds of living past 90 or even 100. While this is beyond your control, men typically pay 24% higher in premiums. Therefore, older men pay the most.
If you have a long history of medical conditions, the insurance provider takes a greater risk on you. Combined with the above factors, your medical history cannot be diminished when you buy health or life insurance.
Examples are complicated health conditions of your family, such as heart stroke, cancer, etc. If you have pre-existing medical conditions in the last two years, your life insurance rates increase.
So, the insurance companies ask for a medical examination, checking your heart condition, cholesterol levels, blood pressure, and others.
However, burial insurance rarely requires an exam, and the questions are fewer and simpler. One main question that they ask is whether you smoke. Statistically, smokers have shorter life spans than those that do not smoke.
So, it will be a loss for the provider to insure you. But there are some companies that offer the same rates even if you are a smoker.
Your Job and Burial Insurance
During the underwriting process, even the profession you are in plays a big role. If the work you do day-in and day-out is highly dangerous, insurance companies charge more rates. Ideal candidates for burial insurance are retired persons and seniors. But the retirement age in many industries keeps on increasing.
People in careers like firefighting, police, transportation, etc., are more prone to work injuries. Furthermore, the rates will depend on a combination of all these factors. For instance, a retired elementary teacher school pays less than a construction employee who smokes.
While some questions may feel intrusive, your personal habits can tell a lot about you. Apart from smoking, other habits like excessive drinking can put your life at more risk.
Besides, if you love racing cars every weekend, that is something your insurance provider should know. Other high-risk activities are skydiving, bungee jumping, etc.
They may cut your life short, and you will be a financial risk to the company. Hence, you are looking at a higher premium.
Reckless Behaviors and Burial Insurance
Although you are currently a responsible citizen and abide by the law, your past mistakes can haunt you. For example, you got arrested for drinking and driving or for possession of drugs.
Such reckless acts also can raise your insurance rates. As the policy covers your end-of-life costs, an increased risk of dying puts you in a tough spot.
Whatever you pick from providers like Mutual of Omaha final expense insurance or any other company, these factors carry weight. But the priority given to them varies with insurance providers. Therefore, request quotes from your agent and get maximized value for your dollar.