One of the things that can intimidate people when they consider a life insurance need is the amount of coverage they should purchase.

Commercials promoting life insurance often suggest large benefit amounts, often hundreds of thousands of dollars. Even life insurance agents, in working with clients, find potential benefit amounts can easily surpass a client’s real need.

That large number and the actual application process can turn people away from purchasing any kind of plan. And when final expense costs can range from $2,500 to more than $10,000, the absence of any life insurance can still create a financial struggle for some families.

But there are life insurance programs that can provide enough coverage to cover basic burial costs and reduce the amount of underwriting necessary to put them in place. 

Often called final expense plans, these policies can be written for benefits between $5,000 and $25,000. They have reduced underwriting in that the applicant just needs to answer a few questions about medical history.

These policies may carry additional benefits such as riders that waive premiums if the insured faces an extended hospital stay and allow the insured to withdraw funds without penalty if he or she is diagnosed with a terminal illness.

The policies may also accumulate internal cash value that can be used in case of emergencies.

Policy applications are not guaranteed, however. Significant or chronic health care issues can exempt some applicants from coverage or create plans that “step up” benefit amounts over a short period of time.

But these plans can be good for people who want “just enough” tax-free money for burial costs so survivors are not forced to liquidate other assets.

Alan T. Girton is a veteran agent with Indiana Farm Bureau Insurance. To learn more, visit https://www.infarmbureau.com/agents/Alan-Girton-Howard-Kokomo-IN