Final expense insurance is used to cover the charges of affairs specifically related to your death. This may include the cost of a funeral service, burial, and other expenses associated with your “final expenses.” This coverage is often known as “burial insurance” or “funeral insurance.” The face amount of this coverage isn’t high, with benefits usually varying between $5,000 and $50,000 per policy.
The Federal Trade Commission figures that many funerals can cost well over $12,000. If you don’t have the prepared cash to pay for your burial or don’t want your estate to be taken up with fees incurred by your death, a final expense insurance plan may be for you.
Final Expense Insurance Facts
- Final expense insurance is a sort of permanent life insurance. This type of coverage does not run out and is more expensive than term life insurance. Term life insurance runs for a certain time frame before ending. Permanent life insurance stays in place for as long as the payments are paid.
- Permanent life insurance policies have a cash value. This value accumulates over the duration of the coverage. The cash value is paid out as part of the death benefit when you pass away. You can also withdraw funds out of the policy, assuming that the coverage built up cash value over the years.
- Final expense insurance seems to have a lot in common with guaranteed acceptance life insurance. Conventional life policies require an evaluation into your health along with a clinical exam. However, guaranteed policies don’t require exams. Instead, applicants are frequently insured after answering only a few questions.
Do I Need Final Expense Insurance?
That depends. If you currently have a term or whole life policy, your family can use your current policy to pay final expenses. If you have term life insurance and the term is about to run out, you may want to consider final expense insurance at this stage.
Alternatively, if your loved ones have adequate financial resources to take care of the final expenses when you die, then there is absolutely no reason to buy final expense insurance. One additional point is that if you are considering relying on the death benefit payment from Social Security to pick up the slack, you may want to reconsider;
One additional point is that if you are considering relying on the death benefit payment from Social Security to pick up the slack, you may want to reconsider; it’s only $255. You may also want to read how much life insurance do I need.
How does Final Expense Insurance Work?
Just like with other types of life insurance, the owner of a final expense life insurance policy may name an individual, or individuals, as their policy beneficiary to receive the death benefit payment. The beneficiary is a spouse or a family member that you trust to carry out the payment of your final expense payments.
A permanent final expense life insurance policy won’t have an expiration date. Thus, as long as the premiums are paid for, coverage will remain in place. In addition to the coverage that is offered with a permanent plan, this type of policy will also incorporate a cash value element where cash builds up on a tax-deferred basis over time.
Top Final Expense Companies
There are many companies that offer final expense insurance, each one with different benefits and stipulations. Working with a licensed insurance agent can help you match your individual needs and budget with the right company. Below are some of the top companies that offer final expense insurance:
- AIG – Guaranteed issue policies up to $25,000 for those 50- to 85-years-old.
- MetLife – Guaranteed issue policies for those ages 50- to 75-years-old.
- Settlers Life Insurance Company – Policies are available from $1,000 to $50,000 for those up to 85-years-old.
- Gerber Life – Guaranteed issue policies are available from $5,000 to $25,000 for those 50- to 80-years-old. The policy also accumulates a cash value that can be borrowed against or used to pay premiums for a period of time.
- Foresters – Policies are available from $2,000 to $35,000, depending on your age. There are some health questions you will need to answer, but if you can qualify, this is one of the best-priced companies.
- Americo – Guaranteed issue policies in amounts from $2,000-$30,000 for those 50- to 85-years-old. Some policies have an accelerated death benefit rider which will pay up to 50% of the face value early if you are diagnosed with a terminal illness.
- Sagicor – Policies are available for ages 18 to 85 and have an accelerated death benefit rider if you are diagnosed with a terminal illness.
- United Home Life – Policies from $5,000 to $100,000, depending on your age, but are available for ages 20 to 80.
- Assurity – No medical exam policies $5,000 to $50,000, amounts vary by age.
- Baltimore Life – Policies have a graded death benefit, which means that they pay 25% coverage the first years, 50% coverage the second year, and 100% the third year.
- Mutual of Omaha – Policies from $2,000 to $40,000 that also have a cash value option. There is also an accelerated death benefit rider which will pay out early if you are diagnosed with a terminal illness, or spend more than 90 days in a nursing home and will remain there for the rest of your life.
- Transamerica – Policies from $1,000 to $50,000, depending on your age. This is one of the best policies for older applicants who need more coverage.
- American National – Policies from $2,000 to $50,000.
Final Expense Insurance Sample Rates
Final Expense Level Benefits Male
Final Expense Level Benefits Female
*All rates quoted on this page are for a super-preferred healthy individual who does not use tobacco. Monthly rates are updated as of Jun 2016 and are subject to underwriting approval.*