There are so many types of life insurance policies available in the market, nowadays. So it can get a bit confusing for people to understand and choose the one suitable for them. The purpose of any life insurance policy is to help secure the financial future of your loved ones, after your sudden death.
Let’s get started with a comprehensive guide for the $25,000 Final Expense Whole Life Insurance Policy. Firstly, this is a genuinely profitable arrangement for all parties, sort of arrangement. This is one of the permanent life insurance policies.
It is everlasting till you die, it offers guaranteed Sum Assured Death Benefit Payout, it offers an accrued Cash Value over the years. Furthermore, it has level premium monthly payments without any increments over your lifetime.
What is a $25,000 Final Expense Whole Life Insurance Policy?
If I am to define a $25,000 Whole Life policy, it is a contract between the Policyholder and the insurer firm for life, which results in benefit for both. Monthly premium payments for $25,000 whole life policy go 3 ways:
- A part of the premium payment of the policyholder goes to his death benefit sum assured.
- A part of the premium goes to operating costs and insurer firm overhead costs.
- A part of the premium goes to the accrued cash value investment account.
This Whole Life policy caters to the needs of all stakeholders like policyholder, his beneficiary and the insurer company. So a $25,000 whole life policy can be termed as a peacemaker life insurance policy.
Why should you get a $25,000 Whole Life Insurance Policy?
Since it offers the death benefit payout of $25,000, which is lesser compared to other permanent life policies. Consequently, the premium payments are not high either. Standard premium payment per month for a non-smoker 50 years’ guy is around $69 whereas for a non-smoker woman of 50 years, it is about $55.
Best part of the deal is that premium payments are leveled and would not increase till your death.
What does a $25,000 Whole Life policy cover?
It offers the same benefits as the burial insurance or pre-need funeral insurance, but they require 2 years’ active period to approve claims.
The $25,000 Whole life policy is better than both of them since it offers a sure shot death benefit, cash value buildup over decades, permanent nature, and freedom of your beneficiary to use the $25,000 cash for whatever they want.
For burial or funeral insurance, the payout is given to the funeral home. But for a $25,000 whole life policy, your beneficiary is free to choose if he wants a cheaper funeral ceremony of $10,000 with cremation. And saves the remaining $15,000 as his tax free cash asset.
He can pay up your outstanding medical bills, small credit card debts or any other small pending expenses. The freedom to spend it by his choice favors the policyholder and his beneficiary.
What are different types of the $25,000 whole life insurance policy?
There are two main types:
1.Simplified Issue
A person can apply for this without having to undergo any medical exam or slow and prolonged underwriting. The underwriting process for simplified issue whole life policy is awfully quick.
As for the medical exam, there is none but the insurance agent will ask you many questions about your health. It is always better to be completely honest.
2.Guaranteed Acceptance
This is usually done without any medical exam too but this is usually for renal failure patients or Alzheimer’s patients. These are people that cannot be insured by any other type of insurance generally. It is not recommended though due to its pricey nature and 2-3 years waiting period on it.
What is the cost of a $25,000 Final Expense Whole Life Insurance Policy?
The face value is sure shot paid out at the death of the policyholder, in the form of the death benefit of $25,000. The cost is paid in form of monthly leveled premium payments of $55 onwards for non-smoker guys who are 50-59 years old, till their death.
Can you use the Accumulated Cash Value in time of need?
Yes, this is a great option since the policyholder can borrow the money from his cash value. He can take it in the form of a loan, to pay premiums or for some large unseen expense, within the range of $25,000. He can also surrender this whole life policy and collect full refund on his premiums paid till that time.
If he needs $25,000 cash right now, for some immediate emergency, he can surrender the policy or borrow a loan.
Which are the Top five $25,000 Whole Life Policy US Firms?
- Mutual of Omaha
- Aetna
- Transamerica
- Royal neighbors of America
- Foresters Financial
What are the myths and misconceptions about the $25,000 whole life insurance policy?
Firstly, let’s be clear that undisputedly, a $25,000 whole life policy is ideal. It can be used for covering your final funeral expenses, and small pending loans or debts. It is better than independent burial or funeral insurance too. Secondly let’s clear some false perceptions about whole life insurance:
Term Life Policy is better than Whole Life Policy:
Due to its affordability, people think that they should prefer term life policies. This is a misleading idea, term life is temporary and it offers premiums with annual increments.
If you bought a 30 years’ term life and outlived it, it will be very expensive to buy even a new 30 years’ term policy. Only ROP Return on Premiums term policies offer a refund, if you outlive your term policy.
With a whole life policy, firstly you pay level premiums, with no increments till you die. Secondly, this gives you peace of mind, there’s no expiry.
If you reach100 years of age and your policy matures, most firms will keep it active. And you will not have to pay premiums any longer. Yet, on death your beneficiary gets $25,000 full death benefit payout.
Buying insurance for Senior Citizens is unaffordable:
Though with the passage of time, with increase in age, monthly premium prices get higher. But they are not unbearable. Buying a health, burial or $25,000 whole life is not an accessory. It should be mandatory. It is a myth that with age or fatal disease, buying insurance becomes too difficult.
For many types of policies, only a reputed broker should be consulted. He will tell you about several no medical exams, health questions, and insurance policies.