Final Expense Insurance
The costs related to a funeral and immediately after someone passes can be surprisingly high, and these unexpected costs can leave family members and loved ones with bills that they might not be able to pay. Final expense insurance allows you to ensure that those you leave behind are not given the burden of paying for all of these expenses out of their own pocket in the event of your death.
The ins and outs of final expense insurance can seem daunting, but it’s important you understand how this coverage could help your loved ones have everything they need after you’re gone.
The basics of final expense insurance
Unfortunately, the bills that come after a death can pile up, probably a lot more than most people expect. Final expense insurance can help family members and loved ones cover the “final costs” associated with your life–this could include anything from medical bills to funeral expenses.
You might also encounter this type of coverage referred to as:
- Final expense life insurance
- Burial insurance
Regardless of what it’s referred to as, this coverage is essentially a way to help family members and loved ones deal with both expected and unexpected costs after your death.
Also keep in mind that final expense insurance is under the umbrella of “permanent” life insurance, meaning that as long as you pay your premiums, it will not expire. In other words, your policy will be in effect until your beneficiary receives the death benefit.
What costs does final expense insurance cover?
The main things final expense insurance is concerned with covering are funeral-related costs—but it’s more than just a prepaid funeral package. In addition to helping with costs directly related to the funeral and burial or cremation, final expense insurance can even help with costs like outstanding debts, probate fees, and unpaid medical bills.
Some costs you can expect to be covered by your policy:
- Cost of opening ground
- Transportation fees
- Basic service fees
When purchasing a final expense insurance plan, make sure to check all the plan details before assuming something is covered. Costs covered by final expense insurance are not limited to the above list, and depending on the funeral your family or you decide on having, you may different costs that need to be covered.
How much does final expense health insurance cost?
Because it’s not as extensive of coverage as whole life insurance, or even term, final expense policies are pretty affordable. You can expect final expense health insurance to cost somewhere between $30 to $70 a month. Keep in mind that this will depend on factors like:
- Coverage extent
- Insurance company
Final expense is less expensive than most life insurance policies, but keep in mind that it’s because this insurance is intended to help your beneficiary cover costs usually incurred right after your death. It is not meant to sustain your beneficiary for an extended amount of time.
While it may seem extensive to have an insurance policy for a single life event, funerals can cost anywhere between $7,000 and $12,000.
How is Final expense insurance different than life insurance?
It’s tempting to assume final expense insurance is the same thing as life insurance, but there are some differences between these types of coverage. When you have a term or permanent life insurance policy, you’re ensuring that your beneficiary (the individual receiving the benefits from your life insurance policy) has ongoing support after you pass away. Your life insurance policy revolves around your earning power, and the earning power you would have had for the rest of your life.
Unlike life insurance, your final expense insurance policy is only intended to cover expenses immediately after you pass. Your final expense insurance policy will be proportionate to the cost of funeral related expenses. Due to this, you can expect your final expense policy to cost a lot less than any life insurance policy, but it is not a replacement for your income after you pass.
Who should get final expense insurance?
Final expense insurance is disproportionately popular among seniors, likely due to its focus on covering funeral related costs. Traditional life insurance is considered more fitting for younger people who may be leaving behind high-cost expenses like children to provide for, mortgage payments, and maybe less savings on top of all those costs. With that said, young people can still benefit greatly from final expense insurance, especially considering that premiums are usually more affordable the younger you are.
This policy is also a great choice for those at the end of their lives, with no debt, a decent amount of savings, and no major costs ahead of them. If you find yourself in this position, it’s likely that your beneficiary won’t need your whole income replaced—the savings that you have, along with other investments, will keep them afloat, and your final expense policy will just help them cover funeral and end of life related costs.
Where can I get final expense insurance?
You can buy final expense insurance from a wide selection of carriers, just like with any other kind of insurance. Some examples of companies that sell quality and affordable final expense policies:
- Mutual of Omaha
- Royal Neighbors of America
- Foresters Financial
- Prosperity Life
- Liberty Bankers Life
- Gerber Life
- American Amicable
- Baltimore Life
Is it hard to get final expense insurance?
In most cases final expense insurance will only involve a medical questionnaire and not a medical exam. Depending on what kind of coverage you’d like, the level of detail of the questionnaire might vary. You may also find that final cost is relatively affordable compared to other types of life insurance policies.
Is it worth it to buy final expense insurance?
It may be tempting to not purchase final expense insurance, but this type of coverage is an affordable and practical way to support your family, loved ones, caretakers, or anyone else involved in organizing and paying for your funeral. You’ll likely be benefitting from more extensive coverage than a pre-paid funeral package would have.
Additionally, if you are older, it’s a less expensive type of life insurance that won’t support your beneficiary for multiple years, but will help them through the process of getting your matters sorting after you’ve passed.