Insurance products aren’t always easy to understand. However, there may not be a product that people within and outside of the industry misunderstand more than final expense insurance. It’s worth getting to know, though, as this product fulfills a vital need for many people. Final expense insurance is a small life insurance policy that covers the cost of a funeral and other final expenses after death. As an insurance broker, you may be missing out on valuable opportunities to serve your clients if you don’t fully grasp this product. Here’s what brokers should know about final expense insurance, including why it’s important and what to do before offering it.
What Is Final Expense Insurance?
Final expense insurance is a type of whole life insurance that can cover all the expenses that arise after a person’s death. The idea is for the plan to pay for costs such as funeral arrangements, burial plots, headstones, and other final expenses. This product can range from a few thousand dollars to tens of thousands of dollars depending on the policyholder’s needs.
Why Is It So Important?
Final expense insurance is important because it helps ease the financial burden on grieving families. The cost of a funeral can be overwhelming, and without insurance, many families end up taking on debt to cover their loved ones’ final expenses. Final expense insurance ensures that families don’t have to worry about the financial aspect of a funeral during a difficult time.
What Should Brokers Understand Before Selling?
Final expense insurance is fundamentally different from a traditional life insurance policy. It’s a smaller policy with a lower premium, and its design is to cover expenses associated with death and burial, not general expenses. There are also unique considerations for marketing insurance products specifically to seniors. Brokers must keep in mind that most of their prospective customers are on a fixed income. This means approaching each potential sale with sensitivity, empathy, and care—this is not the time to score a big upsell but rather build your integrity long-term.
What Are the Details of This Policy?
Brokers should recognize that final expense insurance policies are underwritten differently than traditional life insurance policies. Policyholders are not usually required to undergo a medical exam, and underwriting is often simplified. However, this also means that premiums can be higher, and policies may have exclusions or limitations. Brokers should clearly explain these details to their clients before selling a final expense insurance policy.
How Can You Market This Product?
Brokers can effectively bring attention to final expense insurance offerings through demographic targeting—these policies are most relevant to seniors. Brokers should also educate their clients about the importance of having final expense insurance, as many people are unaware of this product and how it works. Additionally, brokers can partner with funeral homes, senior centers, and other organizations that cater to seniors to increase their exposure and generate leads.
How Do Brokers Benefit?
There are many benefits to offering final expense insurance. What brokers should know first and foremost is that it can help them expand their portfolios and offer a wider range of products to their clients. While you must approach the topic delicately, of course, it does bear mentioning that seniors are often willing to pay higher premiums for the peace of mind that comes with proper coverage. Most important is the long-term benefit—offering final expense insurance can help brokers build long-term relationships with their clients. By selling this product, you’re providing a valuable service that will benefit clients and their families.
