What Is Final Expense?

Final expense insurance is a whole life insurance policy that has a small death benefit and is easy to get approved for. Final expense insurance is also called funeral insurance, burial insurance, simplified issue whole life insurance, or modified whole life insurance.

Final expense insurance has a death benefit designed to cover expenses such as a funeral or memorial service, embalming and a casket, or cremation. However, beneficiaries can use the death benefit for any purpose, from paying property taxes to taking a vacation.

Key Takeaways

Final expense insurance is a small whole life insurance policy that is easy to qualify for.

The beneficiaries of a final expense life insurance policy can use the policy’s payout to pay for a funeral service, casket or cremation, medical bills, nursing home bills, an obituary, flowers, and more.

However, the death benefit can be used for any purpose whatsoever.

The death benefit is usually somewhere between $2,000 and $35,000.

The average cost of a funeral ranges between $7,000 and $12,000.

 

 

Understanding Final Expense

Final Expense Insurance In Action

Let’s say you’re retired, no longer have life insurance through your employer, and don’t have an individual life insurance policy. Neither do you have a nest egg large enough to ease the financial burden on your spouse and/or kids when you die.

 

You’re considering a new life insurance policy. So, you contact a life insurance agent and start the application process. This includes answering a few basic questions about your health. The death benefit is what you’re looking for, but the premiums are too expensive because of your age and health.

 

Unfortunately, the insurance company doesn’t issue policies with a death benefit that’s small enough to make the insurance premiums fit your budget. At this point you might give up, assuming that you can’t afford life insurance.

 

Final expense life insurance is designed to solve this problem.