Final Expense Life Insurance
Written By Doug Mitchell
- Doug Mitchell, CLU
Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health. Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.
- Fact Checked by
Holly Mitchell &
- Holly Mitchell
Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.
Rob Pinner &
- Rob Pinner
Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.
Louis LaBash
- Louis G. LaBash
Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.
- Updated on September 26, 2024
Many people view life insurance as a way of replacing their income after they die. However, it’s not always about income. Burials, cremations, and funerals often cost much more than people expect. Final expense life insurance is designed to cover these costs so that your loved ones are not left with a financial burden during a difficult time.
Let’s explore what final expense insurance is, how it works, and why it might be the right choice for you or a loved one.
What is Final Expense Life Insurance and How Does it Work?
Final expense insurance, also known as burial or funeral insurance, is a type of life insurance policy specifically designed to cover the costs associated with a policyholder’s final expenses, such as funeral, burial, cremation, and related costs.
While these may seem like straightforward expenses, they can actually be quite costly—often exceeding what many people anticipate. According to the National Funeral Directors Association, the average funeral cost in 2024 is just over $11,000.
Final expense insurance can help cover these costs, so your surviving family is not burdened financially. Unlike traditional life insurance policies that offer larger death benefits for covering expenses like paying off mortgages or replacing income, final expense policies typically provide lower death benefits, ranging from $2,000 to $50,000. This makes them a more affordable option for individuals who may not need a large policy but still want to ensure their final expenses are covered.
Benefits of Final Expense Insurance:
- Easy to qualify for, even with pre-existing medical conditions.
- Affordable premiums that are locked in and never increase.
- Provides peace of mind knowing your loved ones won’t struggle financially after your passing.
How Much Does Final Expense Life Insurance Cost?
The premiums for final expense insurance vary depending on the death benefit value and the policyholder’s age and health. Here’s an example to give you an idea of the cost:
| Age | Female $12,000 (Monthly) | Male $12,000 (Monthly) |
|---|---|---|
| 50 | $28 | $36 |
| 60 | $38 | $51 |
| 70 | $62 | $83 |
| 80 | $116 | $148 |
As shown, the older you are when you purchase your policy, the more it will cost. For instance, a 60-year-old male purchasing a $12,000 policy may pay around $50 per month, while a 75-year-old will pay over $108 per month.
The cost to insure females is typically less than males. You can use the calculator on this page to get a more personalized estimate.
What’s the Difference Between Final Expense and Burial Insurance?
There isn’t any difference. Final expense insurance is marketed under various terms like burial insurance, funeral insurance, or simplified issue whole life insurance. All of these policies serve the same purpose—covering end-of-life expenses.
Typically, these policies are purchased by older adults between ages 45-85. Whole life insurance is often the preferred product because it offers lifetime coverage and fixed premiums, unlike other life insurance policies that don’t provide these features.
Do I Need a Medical Exam to Qualify?
No. Final expense insurance policies usually come with simplified underwriting. This means no medical exam is required, and the rates reflect the ease of qualification. While prices may be slightly higher than traditional life insurance, insurers are aware of the medical issues most seniors face, making it easier to qualify for coverage.
Types of Final Expense Insurance Plans:
- Level Benefit Plan: Offers full death benefit coverage from day one. This plan is typically available to individuals in good health.
- Graded Benefit Plan: For those who may not qualify for the level plan due to health conditions. It pays a percentage of the death benefit over the first few years, eventually offering full coverage.
- Guaranteed Issue Plan: This plan is for individuals with severe health conditions. It has a two-year waiting period before full benefits are available.
Who Should Consider Final Expense Insurance?
Final expense insurance is ideal for individuals who want to ensure that their loved ones aren’t left to cover funeral and burial costs out of pocket. It’s especially important for seniors who:
- No longer have employer-sponsored life insurance.
- Hold a term life insurance policy that may expire.
- Do not currently have life insurance due to age or health issues.
Another group that often buys burial insurance are those over 40 who, due to certain health issues, can’t get approved for a traditional policy.
How Much Final Expense Life Insurance Do I Need?
The amount of final expense insurance you need depends on your anticipated end-of-life costs and any outstanding debts. A good starting point is enough to cover your funeral, burial, or cremation expenses. Many people also choose to leave a financial legacy for loved ones or donate to a charity.
Funeral and Cremation Cost Estimates
- Funeral Costs: The average cost of a funeral and burial in the United States is just over $11,000 in 2023. This includes services such as embalming, body preparation, the casket or urn, transportation, and burial fees. Additional expenses may include flowers, obituary notices, and catering.
- Cremation Costs: The average cremation costs between $1,500 and $3,500, not including any services. Adding a basic memorial service can bring the total to around $5,000.
Frequently Asked Questions (FAQs):
What is final expense life insurance?
Final expense life insurance is a policy designed to cover funeral, burial, and other end-of-life costs, ensuring your family isn’t left with financial burdens.
How much coverage do I need for final expense insurance?
The amount you need depends on expected funeral costs and other debts. Most people opt for $10,000 to $15,000 to cover typical end-of-life expenses.
What’s the difference between final expense and burial insurance?
There’s no difference; both refer to the same type of insurance designed to cover end-of-life costs.
Can seniors with health issues qualify for final expense insurance?
Yes, many insurers offer guaranteed issue policies for seniors with health problems. These policies typically come with higher premiums.
How much does final expense life insurance cost?
The cost varies based on factors like age and health. For example, a $12,000 policy for a 60-year-old male can cost around $50 per month.
Get your free final expense life insurance quote:
To protect your loved ones from the financial burden of funeral costs, start by gathering a personalized quote from the calculator on this page. Our carriers are ready to offer you affordable coverage that fits your needs.Gert