If you’re thinking about how to pay for final expenses sometime in the future, then you’ve probably already heard about “self insurance.”
Self insurance sounds like a good idea, especially because of recent disruptions of insurance coverage caused by Obamacare.
But, self insurance is just a fancy way of saying “no insurance.”
Without real insurance in the form of a good final expense policy, you’ll risk leaving a burden of debt on other family members.
The myth of self insurance
Self insurance simply means having enough cash saved and earmarked to pay an unexpected expense at the time when it’s needed most.
Some big companies rely on self-insurance, especially if they operate risky businesses that insurers won’t cover.
Corporations are able to use favorable accounting methods for money set aside as a self-insurance fund.
Until that money is needed for a future emergency, companies can use it to pay for a variety of ordinary business expenses.
But, none of these advantages apply to individuals who self-insure.
Self insurance usually doesn’t cover final expenses
When used by individuals, self-insurance is usually unsuccessful.
That’s because most people have trouble saving cash specifically to pay for funeral expenses.
After all, if they had saved enough money to pay for a funeral then they wouldn’t need insurance in the first place.
Fortunately there’s an alternative to self insurance.
Final expense insurance doesn’t leave anything to chance
If you want to rely on personal savings to cover final expenses, you’ll be counting on your own cash-saving ability instead of paying monthly premiums for burial insurance.
You would need to squirrel away an envelope stuffed with cash.
And, you’d need to start saving early in order to gather enough to pay for a funeral and perhaps even some other family debts.
Of course, the reality for most Americans is far different.
Even if you’re frugal, you probably won’t be able to stash enough cash to pay for burial expenses and other debts such as car loans and credit card bills.
Or, you might save plenty of cash over time, only to see it spent at the last minute by “outsider” family members with poor judgment.
Homemade burial insurance doesn’t work
In theory a trusted family member would be responsible for safekeeping the cash you’ve accumulated for funeral expenses.
But, during family emergencies these cash hoards have a way of quickly melting away through last-minute funeral expenses.
That’s why self insurance usually wastes your legacy and burdens the family with debt.
Final expense life insurance avoids the shortfalls of self insurance
Instead of self-insuring, for most people it’s best to rely on the right final expense insurance policy to cover all funeral and burial expenses.
Good burial insurance will help you and your family avoid all the personal pitfalls and financial shortfalls that result from failed “self insurance” savings plans.
Fortunately there are a wide range of final insurance policy coverage options available.
Choose your own burial insurance premium
The other advantages of a burial policy include monthly premiums based on coverage amounts.
Simply by paying your chosen monthly premium, you’ll have exactly the right amount of final expense life insurance coverage to meet your family’s needs.
Best of all, you can choose the person who will control the money and handle the arrangements.
How much do final expenses cost?
The cost of funerals and burials has risen steadily over the years.
The average cost for a funeral in communities across America is currently between $10,000 to $15,000.
Beyond the cost of a casket, there are numerous other funeral and burial costs including transportation and food for out-of-town family members.
The right final expense insurance policy covers all debts
Few people have enough cash saved to replace an actual life insurance policy.
Luckily, there’s plenty of burial insurance available to cover expenses up to any reasonable amount you may choose.
Beyond ensuring that all your final expenses are covered by the insurance policy, you can increase the coverage to pay off overdue bills and other debts, too.
So, when choosing a monthly premium option you’ll want to add enough coverage to pay off everything, including car loans, credit card bills, and even home equity loans.
That way you’ll have peace of mind in knowing that even the old debts will be paid at an appropriate point in time.
Final insurance is the best solution
For Americans living on a tight budget, a final expense policy is the most practical form of senior life insurance.
That’s because final insurance coverage isn’t based on medical exams or blood tests, and there’s no age limit to qualify.
It’s usually the only life insurance option available for people who are elderly or in poor health.
By paying a small monthly premium you can receive the protection of a seniors life insurance policy to cover funeral expenses and much more.
Are you thinking about self-insuring?
Before you self-insure, you should first take a look at your final expense insurance coverage options.
Your family will be glad you did!