What Exactly Is Final Expense Insurance?

final expense insurance funeral costs burial fees

The death of a loved one is an emotional burden that no one deserves. Luckily, there are plenty of resources to help you through that journey. However, there aren't many resources to help you with the financial side of things. 

Funerals and burials, even cremations, cost a lot of money. Unless you had prepared for the death and set aside money, it can be difficult finding the funds to pay for funeral services. What can help you is final expense insurance. 

Today, we'll tell you all you need to know about final expense insurance. Let's jump right in to learn more about end of life costs and coverage policies. 

What is Final Expense Insurance? 

Final expense insurance is often referred to as "burial insurance" or "funeral insurance". Final expense insurance is a whole life insurance policy. Whole life insurance policies are your standard, traditional life insurance policy, but they aren't always permanent. 

With final expense insurance, the beneficiaries of the policyholder will receive a death benefit anywhere between $2,000 and $25,000 upon passing. This death benefit is meant to help aid beneficiaries with death-related costs like final medical bills, funerals, burials, cremations, etc. 

In order for your beneficiaries to receive the death benefit, you must pay your premiums on time. You can pay them monthly or weekly. 

What's the Difference Between Final Expense Insurance and Life Insurance? 

Now you may be wondering what exactly the difference is between final expense insurance and regular life insurance. The only real difference is that final expense insurance will typically offer a smaller face amount. This is because burial insurance concerns itself more with death-related costs whereas your regular life insurance covers income replacement. 

Just like regular life insurance, you can use the death benefit received from the final expense insurance however you'd like. You can use it all for end-of-life costs or you can use some for those costs and the rest to go on vacation. It's entirely up to you. 

Types of Final Expense Insurance 

Now, there are actually two different types of final expense insurance. To help guide you through the two, let's take a look. 

Guaranteed Issue 

Guaranteed issue policies tend to be the more expensive option. This is because guaranteed issue policies take on high-risk individuals just so long as you don't have a terminal illness. 

Guaranteed issue policies also offer the lowest maximum coverage amount. This is typically around or below $25,000. 

Simplified Issue 

Simplified issue policies tend to be less expensive than guaranteed issue policies. These policies will have you take a medical survey so as to identify preexisting conditions and whatnot. Simplified issue policies take on moderate-risk individuals. 

A benefit to this type of final expense insurance is the coverage amount is a lot higher than that of guaranteed issue policies. The policy coverage amount tends to go up to $50,000. 

Post-Mortem Assistance 

Having to pay for a funeral service or a burial out of your own pocket can negatively affect you and your life. Sitting down with loved ones and discussing final expense insurance is a great way to ensure you have the funds to cover end-of-life costs

Did you find this article on final expense insurance to be helpful? Be sure to share it with others who could use this insurance information. If you would like to see more financial security content like this, check out the rest of the Insurance articles on your blog.

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