Understanding Final Expense Life Insurance

Published: September 28th, 2017 | Last updated: March 13th, 2018

Final Expense Life Insurance

Many people view life insurance as a way of replacing their income after they die to help out their surviving loved ones.

However, it is not always about income.

Because burials and funerals often cost a lot more than people think they do, it is important to understand options like final expense life insurance.

After all, the real point of life insurance is ensuring your loved ones are taken care of after you die and do not have to drastically change their lifestyle. Being faced with unexpected bills after your death could definitely get in the way.

There are a lot of different options for getting life insurance, each of them has different advantages and disadvantages. Not every applicant needs the sizable coverage that most life insurance policies provide. For those applicants, a final expense insurance plan could be the best option, but there are several different factors that you should consider when you’re shopping for life insurance.

Today we look at final expense life insurance plans and explore some of the different pros and cons of these plans. The article will also discuss the different options that you have and ways that you can guarantee that you have enough life insurance protection for you family.

What are ‘Final Expenses’?

As indicated above, Final Expense life insurance refers to insurance used for covering the policyholder’s “final” costs, like burial or cremation, funeral, etc. While these things may seem fairly simple, they can be surprisingly expensive. Caskets alone cost hundreds to thousands of dollars, and with other traditional expenses added on, the average price of a funeral today is upwards of $7,000.

That said, your beneficiaries are not obligated to use the death benefit of a Final Expense or burial life insurance policy for these specific costs. Like other life insurance policies, your loved ones are free to use the payout in the way they see fit. However, if they do find they need some help in paying for your final expenses, the money is there to help.

Every year, there are countless families that lose a loved one unexpectedly. On top of going through the emotional pain, they are left with trying to pay for the funeral expenses that are left by them. This can put a serious strain on their budget and make the situation a thousand times worse. Luckily, this is where a final expense life insurance policy comes in.

What is the Value of this Kind of Policy?

Final Expense life insurance policies are really like most other senior life insurance policies, meaning you can get them in a wide range of coverage amounts. However, you can usually get a policy with a death benefit value as low as $5,000 (best for basic funeral expenses) and as high as $50,000.

Now, if you’re interested in building up the cash value over time, you should know that this is indeed possible. That said, building up a good amount takes years to do. It’s best if you don’t plan on using the built up cash value to pay your premiums in the future.

Even if you are looking for a larger amount of coverage such as a one million dollar life insurance policy, we can help.

There are several key categories that you will need to calculate before you purchase a plan. The first number to crunch is your debts. Final expense life insurance policies are created for policyholders that don’t have a lot of bills that they would leave behind.  Make sure that your plan will be large enough to pay off any debts.

The next number that you should look at is your annual income. The secondary goal of your policy is to help your family replace your source of income. Final expense life insurance is built for anyone that doesn’t have family members that rely on your income.

Is There a Waiting Period?

For many Final Expense policies, there is no waiting period for the death benefit to go into effect. This is especially true if you are in good health. You can still get a policy if you have a pre-existing medical condition and/or aren’t in the greatest health in general, but be aware that there may be a waiting period involved. The exact length depends on the insurance provider used, but it could be around two to three years for the full death benefit amount to go into effect.

After the waiting period is over, your plan is going to function like a traditional insurance plan, which means that if you were to pass away, your family will get the face value of the insurance plan. These waiting periods shouldn’t impact your decision too much, but it’s something to be aware of.

How Much Does Final Expense Life Insurance Cost?

The premiums for these policies vary, depending on the death benefit value and the policyholder himself.

For example, a person in their 40s or 50s who is great health could end up paying monthly premiums around 20 dollars, while someone over 65 looking for life insurance with a medical condition could be charged a couple hundred dollars a month. We can offer you a more accurate life insurance quote, but keep in mind that the more information we have, the more precise the quote will be.

Fortunately, the good thing about Final Expense policy premiums is that they stay level for the rest of your life. There’s no need to worry about the cost suddenly going up in the future and leaving you unable to pay for it.

There are lots different factors that you need to consider when you’re trying to find the best plan to fit your needs.

It can be an overwhelming and confusing process to decide which plan is going to fit your needs the best. The first thing that you need to decide is if a final expense policy is right for you, and our agents can help you make that decision.

These plans are designed for several different groups of people that can take advantage of a final expense plan.

The most common group is elderly applicants that are looking to offset the expensive costs of a funeral. This demographic doesn’t have a massive amount of debt, but will still leave their loved ones with around $10,000 in burial costs and other related fees. Because a traditional life insurance policy is going to be expensive, and they don’t need that much coverage, a burial insurance policy is the best option.

Another group that can take advantage of a final expense plan, is anyone that is looking to save money on their insurance policy. Because these plans are much smaller, applicants can save hundreds of dollars on their insurance coverage for their family. These plans will give a minimal amount of life insurance protection at a smaller cost.

How Much Insurance Coverage Do You Need?

Before you purchase one of these final expense insurance plans, it’s important that you ensure that these policies will give you enough coverage. A vast majority of policyholders across America are under-insured, which means that if something tragic were to happen to them, they would be left with a massive amount of debt and other final expenses. There are a couple of different categories that you should account for when you’re calculating your life insurance needs.

Taking your assets and debts into consideration is the first step.

If you were to pass away, friends and family are going to be responsible for all of your outstanding debts and any funeral expenses. Make sure that your life insurance plan is large enough to pay off those bills without draining your family’s bank account.

The next number that you should look at is your annual income. Most insurance professionals suggest getting around seven to ten times your annual income.

Another number that you should consider is any future expenses that your family will run into. If you looked ahead when buying your life insurance, your loved ones will have the money that they need.


Not having any life insurance at all is one of the worst mistakes that you can make for your loved ones. It would leave them with a mountain of debt and no way to cover those expenses.

You can request a custom quote using our online form on this page, but if you would like to learn more about Final Expense Life Insurance policies, give us a call today at 1-888-552-6159.

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Doug Mitchell

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Comments (6)

  1. Michele Mirizio says:

    Hi, I’m a 57yr old female & a smoker. I live on ssd(4back prbls)which doesn’t pay much. I don’t understand life ins but I DO KNOW that I need some. I recently lost a loved who had no ins so I understand this importance. Can u please help me w/info for this? Also, maybe steer me in the rt direction? Ty

    1. Doug Mitchell says:

      Hi Michele – you can call us 888-552-6159 to get some rates.

  2. Roy says:

    According to Insurance Barometer Study 2016, 53% of U.S. consumers find final expense to be an issue of concern. Viewed from the perspective, final expenses life insurance deserve more focus that it usually has. You have done a good job informing people the very essential information they need.

    Insurance Blogger

  3. Ann says:

    This interesting Final Expense Insurance. Would like more enquiries on this and Life Insurance

  4. ann says:

    does premium go up on final expense life insurance as you age?

    1. Doug Mitchell says:

      Good question Ann. The final expense policies we have are whole life and the premiums are guaranteed to remain level. I can give you a quote – just call me at 1-800-712-8519.

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