Is Final Expense a Ripoff?

Some people don't want an old, beat up, used truck. But that is their only viable option. It is almost the same with burial. It makes little rational sense to pay thousands of dollars for a fancy funeral when the money saved by buying a cheap cremation plan could be put to better use... like maybe a not-so-beat-up truck? OK, so these are not people who think rationally. I understand and won't argue. That said, I wager that if you offered your average FE prospect the choice of a $899 one-time cremation plan (payable in monthly installments for a fixed period) vs. a $50 a month pay-for-life FE policy, that more often than not, the cremation plan would be bought.... especially when you can tell them about the nicer truck they can afford... or maybe the (used) bass fishing boat they always wanted... or whatever will give them years of pleasure in this life, as opposed to an expensive one-day send-off to the next. Of course the comp for FE is greater than that for the cremation plan, so this demographic never really gets the choice. In answer to the question the thread title asks, I say yes... but I hardly expect anyone here to agree!! :yes:


I've heard there are people that actually finance weddings. I hope I never meet anyone that dumb but I've heard they exist. They actually didn't know they could go to the justice of the peace and get hitched for $25 and use the rest to buy a bigger house or put in a swimming pool.

These are college educated middle class people I'm talking about too.
 
1) Clients commonly buy final expense coverage for other than the final expense cremation or burial cost.

2) Most of these people (a) can't afford to drop nearly $1,000 on the spot for anything (that's their monthly budget), and (b) couldn't qualify for an installment plan with their poor credit history.

3) Many are skeptical of the funeral business and would never give that much money over to them at once. They are the equivalent of used car salesmen in many communities.

4) At that price point, there is no large commissionable upside to selling a bargain-basement product like that. You need some significant markup to make that make sense in hiring a field force to push the product.

As the rule goes and is proven in this example, the poor always pay the highest price.

And poverty is a mindset and choice.
 
How is buying a small policy at the end of your life an expensive way to deal with it? A 30 year old buys 10K for $144 per year, dies at 75. He has paid $5040. If he wants until he is 70 and buys. $10k for around $800 per year, he have paid only 4K at his death. The trick knowing when you are going to die. :)

It's not necessarily an expensive solution, but the point is the insurance is expensive compared to other options.
 
1)
As the rule goes and is proven in this example, the poor always pay the highest price.

And poverty is a mindset and choice.

I'll take your word for the first statement, but you are spot on correct with the second... except of course for many (most?) of those who are disabled at birth or at a young age. No one chooses that!

And most people (especially in many states) can't afford a good DI policy and most companies don't offer them as a group plan.

I don't think FE solves a need, but it does solve a 'want' so I guess it has a place in the world of insurance.

Now that I think it through a bit more (from the posts here,) who is to say that wanting a nice funeral and maybe leaving a few hundred bucks after its cost to family member is any worse (or different) than wanting a bass fishing boat?

Labeling it a 'ripoff' is probably too extreme.

I think the best service an FE agent could provide is when they are writing FE to the parent that they try like hell to get in front of the children and sell them a better solution... either GUL or WL... both of which are a much better value than FE.
 
It's not necessarily an expensive solution, but the point is the insurance is expensive compared to other options.

I know that but I was just pointing out that while it may seem more expensive to buy at older ages because of the amount of the premium, it really works out close to the same since the rates at all ages are based on the same mortality table.. Of course, it is really expensive to wait to buy it when you are older if you happen to be one of those that doesn't make it to be "older"..

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I wonder why we only consider life insurance to be a rip off if a person pays on it for many years and doesn't use it or pays more into it than the plan will pay in death benefits if they live long enough? We don't think of car insurance that way and yet over the years we will pay more than a car is worth in comprehension and comp coverages and get nothing back if we don't use it. Wouldn't that be at least as big a rip off as any life policy?
 
I know that but I was just pointing out that while it may seem more expensive to buy at older ages because of the amount of the premium, it really works out close to the same since the rates at all ages are based on the same mortality table.. Of course, it is really expensive to wait to buy it when you are older if you happen to be one of those that doesn't make it to be "older"..

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I wonder why we only consider life insurance to be a rip off if a person pays on it for many years and doesn't use it or pays more into it than the plan will pay in death benefits if they live long enough? We don't think of car insurance that way and yet over the years we will pay more than a car is worth in comprehension and comp coverages and get nothing back if we don't use it. Wouldn't that be at least as big a rip off as any life policy?

This thread has me hopping mad. Got me to thinking about all the health insurance premiums we've been paying over the years and I never use it, not even medications (Praise God!). I want a refund!

p.s.- While President Obama has been a real "consumer's president", it's shameful he let "Big Health" skate with this travesty.:skeptical: Feel the Bern!:twitchy:
 
Is a tote your note car lot charging 40% a rip off? As Readern says these people will forever pay more for many things because of their payment past. Plus most Fe people are in very poor health and a much bigger risk to the ins company than the avg middle class insured.Were i'm strugging with Fe is the words "Immediate day one benefit", I have many clients asking "If I die tomorrow my beneficiary can take this policy to the funeral home for payment correct" That's not true. I'm hearing conflicting story's on if the funeral home will accept a contestable policy and perform the funeral and wait for payment. Some people have told me yes and some say no.So if we told every client " oh by the way don't die the first 2yrs because it could take 6 months to pay". In Aetna's last news letter the whole compliance corner was about how its the agents duty to explain contestability to the client.So Fe is a a ripoff in that regard because I know few agents explain that.
 
How much experience do you have selling final expense to a final expense market?

I'll take your word for the first statement, but you are spot on correct with the second... except of course for many (most?) of those who are disabled at birth or at a young age. No one chooses that!

And most people (especially in many states) can't afford a good DI policy and most companies don't offer them as a group plan.

I don't think FE solves a need, but it does solve a 'want' so I guess it has a place in the world of insurance.

Now that I think it through a bit more (from the posts here,) who is to say that wanting a nice funeral and maybe leaving a few hundred bucks after its cost to family member is any worse (or different) than wanting a bass fishing boat?

Labeling it a 'ripoff' is probably too extreme.

I think the best service an FE agent could provide is when they are writing FE to the parent that they try like hell to get in front of the children and sell them a better solution... either GUL or WL... both of which are a much better value than FE.
 
I'll take your word for the first statement, but you are spot on correct with the second... except of course for many (most?) of those who are disabled at birth or at a young age. No one chooses that!

And most people (especially in many states) can't afford a good DI policy and most companies don't offer them as a group plan.

I don't think FE solves a need, but it does solve a 'want' so I guess it has a place in the world of insurance.

Now that I think it through a bit more (from the posts here,) who is to say that wanting a nice funeral and maybe leaving a few hundred bucks after its cost to family member is any worse (or different) than wanting a bass fishing boat?

Labeling it a 'ripoff' is probably too extreme.

I think the best service an FE agent could provide is when they are writing FE to the parent that they try like hell to get in front of the children and sell them a better solution... either GUL or WL... both of which are a much better value than FE.


I know you are highly educated and above all of us because you have said so many times.

But I've got some news for your highly educated and refined ass, FE is a marketing term for small face whole life policies.

So, while you advocate that we sell whole life as a better option you should realize that whole life is exactly what we sell.

How that passed by someone of your self proclaimed intelligence is just astonishing.
 
I know you are highly educated and above all of us because you have said so many times.

But I've got some news for your highly educated and refined ass, FE is a marketing term for small face whole life policies.

So, while you advocate that we sell whole life as a better option you should realize that whole life is exactly what we sell.

How that passed by someone of your self proclaimed intelligence is just astonishing.

Kept opening this post waiting on you to respond LOL! I knew it was coming. I couldn't respond since I'm not intelligent enough for him.
 
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