Taking up a final expense insurance policy is one of the best things you can do in your 60s and 70s. It offers financial stability to your loved ones when you pass away.
Very few people focus on the provider’s background when selecting the package. But as you’ll see later, it can prove detrimental, and you can end up paying higher premiums. Therefore, one must check the provider’s background with the help of experts’ review before buying a policy. For instance, Gary P. Cubeta’s review of John Hancock final expense life insurance on the Insurance for Final Expenses website provides a great insight into the policy if you’re planning to buy it.
Why Check An Insurance Provider’s Background?
Insurance providers are for-profit companies. And, they have their working methodologies that impact their financial strength. Five independent agencies, including Moody’s, AM Best, and Kroll Bond Rating Agency, rate the companies for their financial stability.
When the company goes through a rough financial period, they cannot provide the coverage or the settlements. In such cases, you’ll see the company getting stricter with the processing of claims.
Insurance companies go bankrupt even though laws mandate them to set aside a certain amount as a reserve. When they do, things get complicated for the policyholders. Eventually, you’ll receive benefits from the state government. But that may require a few extra steps.
Therefore, it’s always recommended to go with an insurance company with robust financial health.
Final Expense Scams
Final expense insurance policies are affordable and are approved quickly, which scammers take advantage of. The burial insurance market is full of bad actors who operate behind the scenes and sell scammy packages. Even companies are not immune to the accusation of not disclosing the entire terms when offering an insurance policy.
In 2014, there was a scam that targeted older adults with a Ponzi-like prepaid funeral scheme. It was operational in 16 states and resulted in $450 million worth of damage before being busted by the FBI.
While prepaid funeral expense policies aren’t scams by themselves, it’s the insurance companies and agents who turn them into a scam.
Another final expense offer you should be wary of is the ‘No Question’ final expense policy that accepts you over the phone. Any agent would have to talk to you regarding your health before they provide the coverage.
How To Select The Right Insurance Provider?
To select the right insurance provider, you must work with a reputed insurance broker in your area. The independent brokers work with multiple carriers and will help you choose the appropriate plan for you.
As opposed to agents who are employed by the insurance carriers, brokers are independent. They are not obliged to sell a particular number of policies in a month. So they can offer you the plan that’s best suited for you.
The brokers will even suggest to you if you should get burial insurance or pre-need insurance. If the funeral costs are about to go up, opt for pre-need insurance to negate the inflation. The broker will be in a better position to advise you on these aspects of policy coverage.
It’s advisable to check from your side the latest ratings of your insurance provider. Rating agencies publish the insurance ratings regularly. Preferably, go for a provider that obtains a higher ranking on their insurance products, price, dependability, and coverage.
But the broker plays a more significant role in deciding the best package for you. So irrespective of whether you need a John Hancock final expense life insurance or some other policy, contacting a reputed broker in your area will significantly ease the process for you.