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What is Final Expense Insurance?

Final expense insurance is also known as burial insurance is a type of life insurance product geared towards seniors.  It helps to remove the financial obligations of a family when a person dies and provides peace of mind. While standard whole life insurance policies can provide funeral and burial coverage, final expense insurance policies provide coverage with lower premiums and lower benefit amounts than traditional life insurance policies. Which is meant to cover the cost of the funeral home and burial services.

Even if you have health issues you can get approved and there generally is no waiting period. The cost for a final expense life insurance policy is affordable and can provide thousands of dollars to pay for a basic funeral service, casket, cemetery plot, and flowers. Term or whole life insurance on the other hand often exceed an individual’s needs and are out of reach for most seniors budgets.

Learn more: What you need to know about final expense insurance options.

How Does Final Expense Insurance Work?

Like most life insurance policies the beneficiaries will receive a benefit when someone dies. For a final expense insurance policy, the benefit amounts are generally much lower and meant to cover the funeral and burial expenses.  However, a person might have outstanding debt or anticipate they will leave medical bills behind. In this case, they should plan for coverage amounts to pay off these debts. Don’t get this confused with long-term care insurance as that is a different type of insurance that covers the cost of a nursing home while someone is still alive.

Coverage amounts can range from $2,000 up to $100,000, although the higher the benefit payout the higher the premium will be. Upon passing, either accidental death, terminal illness or natural causes the beneficiary will receive a check, so they can pay off of the outstanding obligations. In most cases, beneficiaries are family members but can also be a friend.

Learn more: When should I get secure a final expense policy?

Estimating How Much Coverage You Need?

The average funeral costs between $7,000 and $10,000 these days. The benefit amount paid out from Social Security at time of death is only $255.  Even if you choose cheaper options like cremation the costs can run as high as $3,500 with all the related costs. As you can see there is a huge discrepancy in the amount needed for a funeral.

Funeral planning with burial insurance requires a careful consideration of all your final needs. Consider how you want to be remembered, where your final resting place should be, whether you wish to be buried or cremated and what type of casket or urn you prefer. Talk with a licensed, reliable funeral director in your community about the cost of the services you require. A funeral director will give you a list of the services and products that it provides. The value of your senior life insurance policy should cover the expense of the package you choose, plus any additional costs.

The most basic, economical option is generally an immediate burial plan. An immediate plan is a modest service at the graveside and a simple casket. The expense of a viewing is not included in most immediate burial policies. The costs of the plot, a headstone and flowers must be paid for separately and should be included in the estimate you give your insurance provider. An immediate plan may be purchased with either burial or cremation.

A traditional full-service option, including a viewing, a hearse, a formal ceremony and entombment, and cremation is more costly than an immediate or direct package. When you consider the costs of a package, you must take every extra expense into account in order to arrive at an accurate estimate of your financial needs. Your final expense insurance benefits can include the costs of preparatory tasks like washing, dressing, and embalming. A procession, limousines, flowers and awake can also be included.

Although most mortuaries offer packages with a pre-determined set of services and products, you have the alternative to choose only the options that you want. The overall expense of the ceremony, casket, entombment, plot and other options will represent the value of your funeral insurance policy. When you’re buying life insurance, it’s important to have an accurate estimate of the amount of coverage you need to avoid leaving your loved ones with these financial responsibilities.

Learn more: Things you should know about planning a funeral.

How Much is Final Expense Life Insurance?

The specific insurance rates will depend on your age, gender, and other factors. Unlike traditional life insurance which factors in height and weight, and health factors. To get an idea a male that is 65 years of age can expect to pay around $50-$70 per month for a $10,000 policy.  The same policy for a female will run approximately $30-$50 per month.  Someone that is 70 years old and male could expect to pay $70-$100 for a $10,000 policy while a female would pay approximately $50-$90. Keep in mind you can get benefit amounts from $2,000 to $100,000 if you need more or less.

Securing final expense insurance is relatively easy. You can apply for a simplified issue plan, which requires that you complete a basic medical questionnaire and meet specific qualifications, or for a guaranteed issue plan, which requires no health questions or medical exam and guarantees acceptance of your application. If you have a serious health condition, you may be required to purchase a policy with a graded death benefit, which provides life insurance coverage after the first few years of your participation.

Learn more: Is final expense insurance affordable on a fixed income?

What is the Best Final Expense Insurance Company?

There are five independent agencies that rate the financial strength of insurance companies based on letter grades of A-D.  The better the grade the stronger financially the insurance company is.  The factors usually take into consideration the creditworthiness and how that specific insurance company performs financially compared to other insurance companies. Most people look for companies that have “A” ratings. But not all “A” ratings are the same. Some of the independent agencies have a different degree of “A” ratings adding an “A+” for their highest rating. On top of the grading, there are other factors you might want to consider like customer service and insurance costs.  We have reviewed more than twenty-five final expense insurance companies for you to help you choose.

Learn more: Review of life insurance companies.

How to Select the Right Life Insurance Plan?

Final expense insurance or burial insurance are interchangeable terms used to describe permanent life insurance for seniors, in that a policy may be issued on a term or whole life basis. Term life insurance policies provide financial protection for a set period of time, often up to the age of 80. At that time, if no claim has been filed and the policyholder is still alive, the policy will expire. Whole life policies cover you for your entire life once you’ve signed your contract, no matter when your death occurs. Age limits for purchasing a final expense policy may vary. Some insurers sell policies to qualified applicants up until the age of 75.

Although a standard term or whole life policy can cover your last expenses, traditional coverage is not the answer for everyone. If you do not qualify for a standard funeral policy because of a pre-existing medical condition, or if you have other means of providing for your loved ones after your death, final expense insurance may give you just as much protection as you need. Before you sign a contract, compare life insurance quotes from several trusted, reliable providers. Our convenient online resources make it easy to compare final expense insurance quotes in the confidential setting of your home. However, if you need the help of an insurance agent please feel free to contact us so we can help.

Learn more: Can you combine final expense insurance with other life insurance polices?

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