What is Final Expense Life Insurance?
Final expense is a smaller permanent life insurance policy typically intended to help older adults cover funeral costs and other end-of-life expenses.
Also sometimes called “funeral insurance” or “burial insurance,” final expense life insurance typically provides a guaranteed payout to help loved ones pay for a funeral service, burial or cremation, doctor or hospital bills, or other immediate expenses after a death. Like other types of permanent insurance, final expense insurance will never expire as long as you keep up with your premiums.
Since coverage amounts are lower than other types of life insurance, like term or permanent insurance, the premiums for a final expense policy tend to be affordable. Coverage amounts can range from a few thousand dollars up to $100,000, in some cases.
Final expense insurance is easy to qualify for, with no medical exam required. As long as you fall between the age limits of 50 to 85 years old, you can often get approved for a policy within days
What Does A Final Expense Life Insurance Policy do?
Curious about the purpose of final expense life insurance? The definition of final expense includes any policy meant to help ease the financial burdens of your final send-off.
As an older adult, many of life’s biggest expenses are behind you, like paying off a mortgage or saving for a child’s college tuition. But there’s still one big expense to plan for: your funeral. The average funeral costs more than $9,000 today, burdening loved ones financially while they’re already grieving.
Final expense insurance can help. The payout comes with no strings attached, so your family can use it to pay for:
A funeral service
Burial or cremation
A post-funeral gathering
Flowers, music, obituary, or other funeral arrangements
Medical Bills
Nursing home or other residential care
A nest egg for a child or grandchild’s future
A special trip
A donation to a charity that’s meaningful to you or the deceased
This kind of insurance is typically a good option for people whose age or health makes it difficult to qualify for other types of plans. While it’s more expensive dollar for dollar than term life insurance, the lower coverage amounts help to make it affordable. Once you lock in a premium, it stays the same for the entire policy, which is helpful if you’re on a fixed budget. You also can’t have your coverage canceled because of health issues once you’re approved, giving you and your family peace of mind.
Benefits Of Final Expense Insurance
There are several benefits of final expense life insurance, including:
Ability to build cash value: Like other kinds of permanent insurance, final expense insurance builds cash value over time. You can borrow from that cash value during your lifetime or use it as collateral for a loan, giving you another way to pay for expenses as needed.
Like other kinds of permanent insurance, final expense insurance builds cash value over time. You can borrow from that cash value during your lifetime or use it as collateral for a loan, giving you another way to pay for expenses as needed.
Your family has the flexibility to use the death benefit to pay for burial or funeral costs, medical bills, credit card debt, or anything they choose.
Unlike traditional permanent life insurance policies, burial insurance coverage amounts are much smaller, designed to only cover your funeral costs and related debts. It’s not meant to replace your income, cover large expenses, or work as a retirement plan. Final expense insurance also doesn’t require a medical exam, like many other life insurance policies do. You’ll only need to answer a few health questions to apply, and approval is quick and easy.
