Final expense insurance is designed to cover the bills that your loved ones will face after your death such as medical bills and funeral expenses. Final expense insurance is often mistaken for burial insurance, only there is a slight difference. Burial insurance covers strictly the costs of a burial. However, final expense insurance covers final expenses in addition to the burial.

Do I need final expense insurance?

That depends. If you already have term or whole life insurance, your loved ones can use your existing policy to pay final expenses. If you have term life insurance and you outlive the policy term, you may want to consider final expense insurance at that point. 

Can I afford final expense insurance?

Your age will determine how high your premiums will be. That’s because insurance companies take on more risk when insuring older folks, given the fact that they’re statistically closer to death. Basically, if you buy final expense insurance when you’re 45, you’ll pay less each month than if you wait until you’re 75.

Pre-paid funeral vs. Insurance

Many individuals choose to handle their burial arrangements by prepaying upfront - before they need them. Prepaying ultimately gives you the most control. You can hire the best funeral director, pick your burial plot, and even design how you’d like your funeral services to go. However, the pre-paid option could leave your loved ones with less options at the time they need them the most.

For example, there may not be a refund for pre-paid services should you end up moving to another area, the funeral home could go out of business, or an unscrupulous company might charge your family more money beyond what you agreed upon.

Purchasing final expense insurance may give you less control, but could be the right option for your loved ones who will receive a lump sum to handle all your expenses when needed.

What type of final expense insurance is best for me?

The best final expense insurance is the one you can qualify for, and will last your whole life. You have two main choices for whole life burial or final expense insurance. These are known as simplified issue and guaranteed issue.

Simplified issue

These policies provide the best value for those individuals in good health. The premiums are generally lower if you pass a series of medical questions and physical exams. Simplified issue policies are not guaranteed and are offered to those individuals who’s health is a lower risk to the insurance company.

Guaranteed issue

These policies are guaranteed and require no exam or health questions.  Everyone between the ages 50-80 can qualify. These policies are not always the most affordable option for final expense insurance. Premiums will generally be higher on guaranteed issue life insurance because the risk to the company is higher.

What is most important?

Whether you choose a life insurance policy that covers funeral expenses and then some, a dedicated final expense insurance policy, or funeral pre-payment, you’ll be doing your loved ones a huge favor. Taking the time to consider and document your end-of-life wishes may be a little uncomfortable now, but it will make all the difference for those you love when the time comes.