Final Expenses
When calculating the amount of life insurance coverage you need, don't forget to plan for your final expenses. Final expenses may include but are not limited to:
Final medical expenses — The usual idea behind life insurance is to prepare for an untimely end. Untimely ends are usually caused by illness or accidents, which often precipitate formidable hospital bills.
Funeral costs — Even without the burial plot, the average cost of an American funeral exceeds $7,000. Add the cost of a grave, and your bill easily exceeds $10,000.
Probate costs — A number of bumps in the road may arise before one's heirs receive possession of an estate. Wills may be contested. Creditors may lay claim on properties. If probate becomes an issue, there will also be court and attorney fees to pay.
What type of life insurance to buy
You should choose a policy based on the primary purpose for your life insurance coverage. If that purpose is covering your final expenses:
- In the case of unmarried individuals with no dependants, term life insurance is a good choice because it is affordable and simple.
- For individuals who are planning their final arrangements because of present health concerns, guaranteed issue life insurance may be more realistic. Guaranteed issue life insurance requires no health questions and no medical examination at all.
If you have multiple purposes for life insurance, you may find it beneficial to buy more than one policy.
