How do you convince a senior citizen they need funeral expense insurance? What is the advantage to them purchasing final expense insurance rather than a prepaid funeral?
One of the most important steps to selling your client final expense insurance is making them understand its value. The policies normally have a low death benefit of between $5,000 to $25,000. Therefore, it is usually easier to qualify for than other forms of life insurance and is more affordable for seniors.
Even with those quick facts, they may be hesitant to purchase. To learn how to overcome their objections, keep reading. We will provide you with everything you need to know so you can convince potential clients that final expense insurance is a “must-have” policy.
Average Funeral Expenses
Advise your client that today the average funeral cost is between $7,000 to $12,000. This price covers transporting the remains to the funeral home, embalming, and preparation of the body. Also included in the price are the casket, viewing, basic service, and burial.
If the family chooses cremation, the average funeral will cost $6,000 to $7,000. Above and beyond the funeral costs are the expenses for the cemetery, monument, marker, and flowers. Your client can put into writing what their desires are so their family can comply with their burial wishes.
When your client purchases final expense insurance, it provides their family with financial security. Their family will be able to provide a burial that gives them closure without going into debt on funeral expenses.
Stress to your client that although the main selling intent is to cover funeral expenses, their family members may use the insurance payout to cover medical expenses or other debt. When preparing your sales script, plan to show them the costs of some items relative to a funeral.
Make your client aware that one of the most substantial costs their family will encounter is the price of a casket. There are numerous material options. Your client may want to purchase a sufficient amount of insurance to cover the type of casket they prefer to be buried in.
Let them know that through their purchase of final expense insurance and putting their burial wishes into a will and trust, they make sure that their family is able to afford to purchase something beyond a fiberboard or cardboard casket.
- Fiberboard/Cardboard—$20.00 to $350.00 unfinished without lining
- Fiberboard/Cardboard/Softwood—$200 to $1,000 with lining
- Solid Pine Cloth Covered—$850 to $2,000
- Metal—$1,200 to $5,000
- Stainless Steel, Copper or Bronze—$3,000 to $10,000
- Veneer Finish of Engineered Wood—$1,200 to $3,500
- Veneer Finish of Exotic Hardwoods—$1,200 to $7,000
- Wood Casket of Softwood—$1,000 to $3,000
- Wood Casket of Hardwood—$2,000 to $10,000
- High-End with Decoration and Customization—$15,000 to $30,000
Explain to your client that they may purchase a policy that provides a payout high enough to ensure they are buried in a casket that meets their own personal desires, plus coves all other expenses associated with a funeral. This allows their family peace of mind in being able to send the client out in style.
Cemetery Plot Costs
One shocking expense your client may not be aware of is the cost of a plot in a cemetery. If they already have a spot purchased great, if not, their family will need to finance that purchase.
There are several types of plots available. They or their family will be able to select a single plot, companion spot, family burial plot, or a plot for cremated remains. In addition, some cemeteries have special areas for those who undergo cremation, such as urn gardens, crematorium, or columbarium memorial walls.
When your client is considering a burial plot, the cost will depend on whether they plan to be buried in a rural location or urban cemetery. Rural plots are less expensive than urban areas. A single burial plot will run your client’s family between $200 to $2,000.
If your client plans to have their burial in a private cemetery, the plot will cost between $2,000 to $5,000. However, if the area is densely populated, the cost for a cemetery plot can be as high as $25,000 for a single and $50,000 for a double.
Even if they are having their remains cremated, the cost for the burial of ashes can run anywhere from $350 to $2,500. The cost is lower in a public cemetery and over $1,000 in a private cemetery.
Make sure your client understands that their family will need to pay for a grave marker in addition to the plot. This will cost between $300 to $800 for a flat marker and $1,000 to $3,000 for an upright headstone.
If the cemetery requires a grave liner or burial vault, there will be an additional $400 to $5,000 fee depending on the construction materials. The cemetery will also charge an interment fee for the opening and closing of the grave. This will cost anywhere from $350 to $1,000 in a public cemetery and $600 to $3,000 in a private cemetery.
Depending on where your client is located, the family may need to purchase a burial permit, which is generally less than $20. Again, the funeral director will know whether this is a requirement for burial.
Final Expense Insurance v. Prepaid Funeral
Your client may feel funeral expense insurance is not necessary because they have a prepaid funeral plan. They may also be hesitant to buy final expense insurance because they are considering a prepaid funeral.
Explain to your client that a prepaid funeral is a preparation strategy in which they lay out all the funeral details. The funeral home is paid in advance, and there are risks with that type of purchase.
Prepaid Funeral Costs and Coverage
When your client purchases a prepaid funeral plan, they decide what funeral home will perform their funeral. Then, they select everything pertaining to the funeral, including the casket, service, headstone, and obituary.
The risk with this type of purchase is that there is no guarantee the funeral home’s reputation will not become tarnished, or they may go out of business. It is also possible your client will pay considerably more for this option than the funeral home’s actual expenditure to perform the funeral.
The average cost of a prepaid funeral is:
- Cremation with no funeral service—$2,000 to $4,000
- Cremation with a funeral—$6,500 to $8,500
- Burial with no funeral service—$3,500 to $4,000
- Burial with a funeral—$8,000 to $10,000
Explain to your client that their monthly payment will be considerably higher than it will be for a final expense insurance policy, depending on what your client selects. For example, most pre-paid funerals are funded with a pre-need life insurance policy that has to be paid up in 10-years or less. It is priced the same for males and females and non-smokers pay the same as smokers. And it’s priced as a guaranteed issue even if the insured is healthy. For these reasons your final expense premium will be MUCH lower and you will never lose a case when the person is looking for a low monthly premium for their funeral coverage.
Another significant problem is that there is no guarantee that their funeral will be paid in full at the time of their death. If the cost of their funeral plan increases, their family may need to pay the difference.
Funeral Expense Insurance Costs and Coverage
Because of the low death benefits, premiums for final expense insurance are inexpensive, often only $5 to $10 per week when purchasing a $5,000 to $35,000 death benefit. In addition, the typical client age to market this insurance to is 50-85 years.
There are many benefits to your client, including:
- No medical exam, so everyone qualifies regardless of their health
- Low monthly premiums
- Premiums are payable on a monthly or yearly basis
- Beneficiaries receive a cash payout to provide help with funeral expenses or any other debt
- Some policies earn dividends depending on the provider
- You pay a fixed premium for the duration of your policy
This is an ideal policy for senior citizens who no longer need life insurance to provide income to their spouse or children. It is also a good option for those who do not have any life insurance and want to make sure their decedents can afford their funeral expenses.
When selling the insurance, be sure you explain any waiting periods. For example, if the policy you are promoting has a waiting period of 1-2 years, that is a good reason for those in the younger age range to purchase the policy now.
Because the policy provides a cash payout to the designated beneficiary, they can use the funds in any manner necessary to close your client’s estate. In addition to their funeral and burial, the family may use the funds to liquidate the estate, pay creditors, pay for a newspaper obituary, and more.
Why Your Client Needs Final Expense Insurance
The cost of funerals and burials continues to rise with inflation. When you combine this with the instability of the job market, there is no guarantee that family members will have the funds to finance a funeral 5, 10, or 20 years down the road.
Family members do not need the emotional stress of not being able to pay the funeral expense of a loved one without incurring insurmountable debt. By purchasing final expense insurance, your client brings peace of mind to both themself and their loved ones that funeral costs will be covered.
If you have any questions about selling final expense insurance, contact us at Final Expense 101. In addition, we offer training and educational materials to our members that will help you develop a lucrative career selling final expense insurance.