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Life Insurance UmbrellaWith life comes unexpected challenges, but some things we can predict. Everyone will die, so end-of-life and funeral expenses are certainties. Many of us also leave dependents who need financial security after we’re gone. But what if traditional life insurance isn’t an option? For those with high-risk profiles or special needs, some solutions can provide peace of mind.

Understanding Your Risk Profile

Risk profiles can vary, but several factors can increase your odds of higher premiums or rejection. Health issues, including chronic physical and mental illness, could lead to skyrocketing premiums. Having multiple conditions can make it significantly harder to get a policy or reasonable rates. Being male and over age 40 adds even more risk. Toss in tobacco use and you may find it nearly impossible to buy coverage.

Quotacy mentions that high-risk occupations come with higher premiums. Some examples include active military personnel, horse jockeys, aircraft pilots, roofers, truck drivers, power line workers, garbage collectors, farmers, ranchers, steelworkers, and those in logging, fishing, or mining. Certain law enforcement, medical first responders, and firefighting jobs carry higher risks as well: smokejumpers or SWAT officers, for instance. Insurers look at high-risk hobbies like skydiving and rock-climbing in the same way. These all increase your odds of dying young. Think of it this way: A 50-year-old truck driver with diabetes will pay more than his healthy female counterpart in her late 20s.

Simplified or Guaranteed Issue Life Insurance

Your unique risk profile may or may not prevent you from getting traditional permanent or whole life insurance. If it does, you can still purchase simplified or guaranteed issue coverage. NerdWallet insurance expert Georgia Rose explains that these term life policies don’t require medical exams. Unless you’re terminally ill, in a nursing home, or diagnosed with HIV, your chances of approval are quite high. Keep in mind that many of these have upper and lower age limits – usually 40 to 85 years old – plus lower coverage amounts and graded death benefits. They typically offer last-resort coverage for people who can’t get approved elsewhere.

Funeral and Burial Insurance Policies

If you’re only concerned about covering your funeral expenses, you may consider a funeral or burial insurance plan. The Insurance Information Institute reveals that these are usually whole life policies with payouts ranging between $5,000 and $25,000. They’re mostly available through insurance companies and brokers, but some states permit funeral homes to sell this coverage. You won’t need to undergo a medical exam, but you’ll probably have to answer some questions about your medical history. Premiums for burial insurance tend to be low and are paid weekly or monthly.

You may have heard of “pre-need” funeral plans. These allow you to set up your memorial arrangements and pay in advance through monthly premiums. Strictly speaking, they aren’t insurance policies. You’re just paying for your memorial service plus cremation or casket costs, flowers, your burial plot, headstone, and fees for digging your grave.

Investing in Self-Insurance

A funeral insurance policy or burial plan may be a great option if you don’t have dependents. If you have a family, however, they’ll need assistance after you die. SmartAsset discusses self-insurance: placing the amount you’d pay for life insurance premiums into an interest-bearing account. Mutual funds are common savings choices, but other interest-earning accounts may allow you to grow your savings. Meanwhile, you could also allocate funds toward paying down large debt: mortgages, car loans, and other liabilities you’d leave behind for your estate.

We often think of life insurance as a vital resource. When your risks make it harder to get coverage, however, you still have other ways to handle funeral expenses and debts. Nontraditional life policies, funeral plans, and self-insurance can provide essential funds to take care of your needs and those of your family.

Category: Funeral

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