There are various types of policies available depending on the intentions for having it in place.
Business owners may have different reasons for example key person policies or to ensure the succession of the business into the future.
Individuals may purchase for income replacement upon death, final expenses and as a cash accumulating policy for future withdrawals and other living benefits for long term care, disability and critical care riders.
The younger the policy holder is upon initiating the policy the least health conditions may be present to impact the premiums.
For those whose health disqualifies them from ordinary policies there are funeral expense policies depending on the state which differs from the final expense category. This has a very liow face value with the sole purpose of fulfilling burial expenses and not for transfering assets to beneficiaries.
Usual policies are:
Term
A term policy is best purchased when you want to have a payout within a certain time frame such as with a mortgage. Life span can't be measured so using a term policy for funeral expenses may not be the best use of money if you out live the policy.
Permanent
Whole life and Universal life policies are permanent and can stay effective usually till age 99 and can in most cases offer cash values depending on the required length for accumulation .
The most common mistake is to not calculate properly how much is actually needed because future inflation is hard to predict.
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