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  • Mark Dierolf

'Final expense' life insurance as seen on TV may not be what it seems...

Updated: Jul 17, 2021

"Final expense" life insurance is often promoted on TV by famous people. The offer is for a benefit to cover funeral and burial expenses. The policy is often for $25,000 or less, but if the offer seems too good to be true, it likely is. Here's why:

1. The death benefit is small and expensive. The easier it is to qualify, the more expensive the policy is, especially for seniors.

2. The death benefit may be lost because these policies often have little or no cash value, and may lapse when a payment is missed. You may also have to wait years for a benefit, or may outlive it.

A better way to prepare is with a Single Premium Whole Life insurance policy, or a deferred annuity if you can't qualify.

A Single Premium Whole Life (SPWL) policy often offers a life insurance benefit with growth in cash and loan value.

A deferred annuity may also offer a death benefit and growth in value, but the benefit starts low and is an investment gain when it grows. The benefit for a SPWL policy starts much higher and is often tax-free to beneficiaries.

You need at least $25,000 to be in the market for a SPWL policy or deferred annuity. But if you don't have the savings, no worries.

Anyone should be able to start a bank savings account for $100 and designate a "payable on death" beneficiary to cover final expense needs.

Add a little bit each month to your savings, and the longer you live, the more you will save and have for a rainy day.

Call today and save: (831) 753-0507

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