What is Final Expense Life Insurance?

Final expense insurance, also known as burial insurance or funeral insurance, is a type of life insurance that is specifically designed to cover funeral and burial expenses. It typically provides a limited amount of coverage, such as $5,000 to $25,000, and may be more affordable than other types of life insurance.

Final expense insurance is designed to help cover the costs associated with a funeral and burial, such as the cost of a casket, burial plot, and funeral services. It can provide financial protection for an individual's loved ones and help them to avoid the financial burden of paying for funeral and burial expenses.

Final expense insurance is generally easier to qualify for than other types of life insurance, as it typically does not require a medical exam. However, it is important to carefully consider the terms and limitations of a final expense insurance policy before purchasing one.

These policies may have exclusions or restrictions on coverage, and the premiums may be higher for individuals with certain health conditions. It may be helpful to speak with a financial advisor or insurance agent to determine if final expense insurance is a suitable option for you.

Here are some key things to know about final expense life insurance:

• Coverage Amounts: Policies usually range from $2,000 to $40,000 in coverage. The average policy is around $10,000.
• Eligibility: You can qualify regardless of your health if you are between 50 and 85 years old. There are no medical exams required.
• Premiums: Premiums are based on your age at the time of purchase and don't increase. The older you are, the more expensive the policy. Premiums are usually paid monthly or quarterly.
• Cash Value: Final expense policies accumulate a cash value over time that you can borrow against if needed. However, the primary purpose is covering funeral costs.
• Beneficiaries: The death benefit is paid directly to your chosen beneficiaries to cover end-of-life costs and is not part of your estate.
• Purchase Period: Policies only require premium payments for a set time period, such as 5-30 years, after which coverage continues even if you stop paying.

So in short, final expense life insurance provides affordable guaranteed coverage to pay for funeral and burial expenses without a medical exam. It gives peace of mind that end-of-life costs will be taken care of.

Who should purchase final expense life insurance?

Here are some situations where final expense life insurance may be appropriate:

• Seniors with limited assets/savings: The policy can cover funeral costs so as not to burden family financially.
• Unmarried or childless seniors: There may be no one else to pay for final expenses without this policy.
• Seniors concerned about medical exams: The no medical exam aspect makes qualification easier for older applicants.
• Those wanting to plan ahead: Getting coverage earlier when premiums are lower allows people to prepare for the future.
• To supplement existing policies: Can help fully cover expected funeral costs if an existing policy payout would fall short.
• For peace of mind: Knowing funeral costs are covered even if savings are depleted by end-of-life medical bills.
• To leave assets to heirs: Can help maximize assets that can be passed on to family or charities.
• For cremation costs: A smaller policy could cover just a basic cremation service.

The best candidates are generally senior citizens with limited financial means and no one else to pay for their final expenses after they pass away. Having this policy prevents leaving funeral costs as a burden on family or creditors.