Last chance insurance can help cover funeral costs
In an ideal situation, people buy life insurance long before they need it. They get a good rate because they are young and healthy. But people with short life expectancies, whether because of their age or an illness, have an option for life insurance, too. Guaranteed life insurance, also known as last chance insurance, can cover people who are otherwise not insurable.
Pros
This type of insurance is generally aimed at individuals between ages 50 to 85, according to Colonial Penn Life Insurance Company. No physical exams are needed to qualify for last chance insurance. In fact, some insurance companies give applicants a policy as soon as they pay for it--this makes getting last chance insurance considerably easier than any other type of life insurance.
Cons
Last chance insurance policies have some drawbacks. Most importantly, it is significantly more expensive than a term-life insurance policy. For example, a 50-year-old man would pay $200 a year for a term-life insurance for $25,000, according to Bankrate.com. But the same man wanting the same coverage would have to pay at least $800 a year for last chance insurance, Bankrate.com reports. Additionally, compared to other life insurance policies, the coverage for last chance insurance is small. If you want more than $50,000 of coverage, you must buy multiple policies.
Alternatives
Individuals who are not insurable look for other options before choosing last chance insurance, Bankrate.com reports. Research any unions or associations loved ones are involved in, because sometimes individuals can qualify under their relatives' group life insurance, according to Bankrate.com. A nursing home pre-burial program, which is essentially funeral insurance, is another less expensive alternative to last chance insurance.
Tags: last chance, chance insurance, chance insurance, last chance insurance, life insurance, life insurance, according Bankrate