Is this a Rip Off?

[xrac]

New!

Thanks very much!

I don't know very much about LI, but this sounds like a bad deal. Basically, she's looking for some burial insurance that will take care of her final expenses. She probably will stick around for another 10 yrs...but i think her money would be better spent in other areas.

Probably do better in a money market or CD.

Anyone know of a Final Expense plan with a face value of 5k?

5K face value is way to little in my opinion. What is the point if she can afford a large amount?

 

[Newby]

New!

Thanks very much!

I don't know very much about LI, but this sounds like a bad deal. Basically, she's looking for some burial insurance that will take care of her final expenses. She probably will stick around for another 10 yrs...but i think her money would be better spent in other areas.

Probably do better in a money market or CD.

Anyone know of a Final Expense plan with a face value of 5k?

Tony, If she has the money, tell her to just go to the funeral home that she will use and prepay the funeral. That gives her the most bargining power and she will get the best deal.

Make sure it is funded with an insurance contract. Make sure it is price guaranteed against inflation. Make sure they do NOT have her sign it over as irrevocable. If they have a 2-year same as cash payoff option have her pay the first two annual premiums and pay it off in full when she gets a bill in two years.

That is her best option to have it done and paid for and frees up all her other money and cash flow to live on. She won't have to worry about it any longer.

 

[TonyC]

Thanks New....

appreciate it!

 

[JMO Fan]

Pre-need is a form of whole life, often with a shortened pay period (e.g., 1, 3, or 5 years). It's often linked to inflation, so the death benefit goes up each year, and often the premium as well. People who buy often know they're near death, so rates are sky-high; healthy folks can always get a better deal (although it might be hard to get one that's linked to funeral expense inflation).

 

[Newby]

Pre-need is a form of whole life, often with a shortened pay period (e.g., 1, 3, or 5 years). It's often linked to inflation, so the death benefit goes up each year, and often the premium as well. People who buy often know they're near death, so rates are sky-high; healthy folks can always get a better deal (although it might be hard to get one that's linked to funeral expense inflation).

Many very healthy people also buy pre-need. Some of the carriers (Forethought being one) also have prefered rate classes where you have to be in great health to qualify.

It's simply the alternative to final expense and mainly for people who want a paid in full contract not a lifetime payment.

In my experience, people with money like the paid up preneed policies and people who are financially struggling go for final expense insurance. It has little to do with age or health.

 

[HomeService]

newby: final expense can be term or whole life. it is the money earmarked through life insurance- to pay final expenses- does not matter if it is whole life or term, what matters is the benefit- that pays final expenses.

 

[Newby]

newby: final expense can be term or whole life. it is the money earmarked through life insurance- to pay final expenses- does not matter if it is whole life or term, what matters is the benefit- that pays final expenses.

I would disagree. While I know that there is probably no "legal" definition of what is classified as a final expense policy, the term final expense is used to market insurance that is needed for immediate needs after death (often funeral and/or cremation and cemetery costs.

Term life insurance is not intended for permanent needs. It is not likely to be in force when someone dies UNLESS they die at a premature age.

Anyone who markets a term policy as "final expense" would either be ignorant or taking advantage of their clients ignorance. Even AARP who markets a term life policy to seniors does NOT call it a final expense policy and is clear to let them know (although many don't read it) that it is a temporary policy for temporary needs.

 

[HomeService]

final expenses are just one portion of what a family needs to pay off -upon death, after the needs analysis is done, so taking the life insurance industry to a point where we are marketing "final expense" and "mortgage protection", and having a narrow definition of such, is bad. real bad. so, using certain marketing terms to define how you fill a need... is screwed up.

I know there are people going around selling final expense, and that the market is kind of ripe for it now, and that maybe all the mortgage protection guys are shifting towards final expense. And that seniors may not need a needs annalysis done and that they may just need a final expense policy right now. This does not make labeling- a good thing.

 

[mcampbell]

That is a little above average for FE. The product we use is $1485.00 a year but isn't not term. Its only off by a little bit but term is a different product. FE is manily used for funerals like a couple people stated. You have to be careful with FE because if its not term she could pay way more then 15k.