The 4 types of final expense insurance.

There are four types of final expense insurance:

• Level benefit/immediate
• Graded Benefit
• Modified Benefit 
• Guaranteed Issue.

Level Benefit/Immediate Final Expense Insurance

A level benefit/immediate final expense insurance policy is typically for applicants with no health issues or very minimal health issues. Usually all health questions are answered no.  This policy is effect on the first day it’s issued.  If the applicant dies, the beneficiaries named on the policy will be paid an immediate death benefit.

A level benefit policy will offer the lowest premium, highest face amount and most additional rider options. If you can qualify for a level benefit policy, you should purchase that policy.

Graded Benefit Final Expense Insurance

A graded benefit final expense insurance policy is issued if you cannot qualify for a level benefit policy.  If you have some health issues, answered yes to one or more of the health questions, are outside of the height and weight range and/ or you may be taking a medication that excludes you from a level benefit policy.

A graded benefit policy will not pay an immediate death benefit. There is a 2-3 year waiting period for full death benefit.  The graded benefit policy will pay your named beneficiaries 20%-30% of the face value amount if death is in the first year.  70% of the face value amount is paid if death occurs in the second year. The full death benefit is paid to your named beneficiaries in the third year and beyond. The payouts vary depending on the insurance company.

Your premiums will be higher. Your maximum face value will be lower than a level benefit policy because the of the risk the insurance company is assuming.  You may be limited as to the riders you can select.  If you only qualify for a graded benefit policy, we will always try to place you with an insurance company that will pay your named beneficiaries the full death benefit as soon as possible.

Modified Benefit Final Expense Insurance

A modified benefit final expense insurance policy is typically issued to applicants that have serious health issues and cannot qualify for a graded benefit policy. Like the graded benefit policy there is a two-year waiting period before death benefit is paid. However, the insurance company will only payout a return of premium with a percentage of interest the first two years.  In the third year and beyond the full death benefit will be paid to your named beneficiaries.

Your premiums will be higher. Your maximum face value will be lower than a graded benefit policy because the of the risk the insurance company is assuming.  You may be limited as to the riders you can select. Modified level policies are rare. If you only qualify for a modified benefit policy, we will always try to place you with an insurance company that will pay your named beneficiaries the full death benefit as soon as possible.

Guaranteed Issue Final Expense Insurance

A guaranteed issue final expense insurance policy has no health questions.  There is also a two-year waiting period before the death benefit is paid.  If death occurs during the two-year waiting period, the named beneficiaries will receive the return of premium plus interest. The full death benefit is paid in the third year and beyond.

Your premiums will be higher. Your maximum face value will be lower than a graded benefit policy because the insurance company is assuming a lot of risk. You may be limited as to the riders you can select. Guaranteed issue policies tend to be cheaper than a modified benefit policy.