What is Final Expense Insurance?

Final expense insurance is a type of permanent life insurance policy that can help older individuals reduce the burden of end-of-life expenses for their loved ones.

What does a final expense life insurance policy provide?

While most of your big life expenses are behind you, like paying off a mortgage, covering college tuition, and paying for a wedding, there’s still one major expense to plan for. Funerals cost an average of $10,000, which can be a major burden to loved ones, and a high unexpected expense. It’s a heavy burden to put on your loved ones, as they mourn your loss and deal with their grief.

Final expense insurance provides beneficiaries with a payout to cover costs like:

• The funeral service
• Burial or cremation
• Medical bills
• Nursing home
• Debt pay off

If funds remain, your loved ones can use the funds for other items like a savings for a child or donation to a charity you cared about.

The low coverage amount makes this type of insurance affordable. Once you purchase a final expense plan, you lock in your premium, so it won’t increase, even if your health declines. Your coverage can’t get canceled because of health issues either.

Final expense insurance also builds cash value over time. You can borrow against your cash value while you are alive. You can also use it as collateral when attempting to get funding.

FAQ

Is burial insurance the same as funeral insurance?

Yes, final expense insurance is often referred to as burial or funeral insurance.

Are there alternatives to final expense insurance?

Term life insurance is the most affordable life insurance option and the death benefit can be used for final expenses. However, if your term life insurance runs out before you pass, you may need to get final expense insurance.

How will my family get the funds?

When you pass, your beneficiaries will contact the insurance company and notify them of your passing. The insurance company will work with them to disburse the payout.

Types of Final Expense Insurance

There are two main types of final expense insurance. Simplified issue final expense insurance is for people in good health who are seeking coverage for end-of-life costs. To apply, you will answer a few health questions. Coverage for this type of plan typically goes up to $35k.

Guaranteed issue final expense insurance is best for people who can’t buy other types of life insurance coverage because of their age or poor health. There are no health requirements required to get approved for this type of final expense insurance. Coverage typically goes up to $25k.