Final expense insurance, burial insurance, guaranteed whole life insurance—they all refer to the same type of permanent life insurance. You can buy final expense life insurance to ensure your loved ones have the necessary funds to pay for your funeral, burial, and any other expenses you may leave behind when you die.
How Final Expense Life Insurance Works and Its Features
Guaranteed Approval
Final expense insurance is typically for individuals ages 50 to 80. No matter your health, you will be approved for this type of life insurance. Coverage can begin as early as the next business day after applying.
No Medical Exam Required
To be approved for most types of life insurance, you need to have a medical exam. This exam helps the life insurance underwriters determine your mortality risk. The higher the risk to insure you, the higher your premiums will be.
» Learn more: Do I Need a Medical Exam to Get Life Insurance?
However, with final expense life insurance, there is no medical exam required and your medical records are not even taken into consideration. You pay based on your age and coverage amount. Don’t smoke? You pay less.
Level Premiums
Once your policy is approved, your insurance premiums will never increase. The table below gives an example of premium costs of a final expense insurance policy.
| Final Expense Life Insurance Monthly Premiums – Male, Non-Smoker | ||||
|---|---|---|---|---|
| Age | $5,000 | $10,000 | $12,000 | $15,000 |
| 50 | $26.49 | $51.98 | $72.19 | $89.98 |
| 55 | $30.99 | $60.98 | $80.19 | $99.98 |
| 60 | $33.49 | $65.98 | $87.39 | $108.98 |
| 65 | $40.99 | $80.97 | $108.99 | $135.98 |
| 70 | $49.99 | $98.97 | $136.18 | $169.98 |
| 75 | $65.49 | $129.97 | $185.78 | $231.98 |
| 80 | $96.48 | $185.97 | $260.18 | $324.97 |
For example:
Let’s say you’re a 70-year-old father and grandfather and you were just diagnosed with congestive heart failure. If you aren’t a smoker, you can purchase a $15,000 final expense policy for just under $170 per month—no matter what your medical records say.
Fifty percent of people diagnosed with congestive heart failure have an average life expectancy of less than five years. Let’s say you pass away after three years. You will have paid approximately $6120 into the policy and your beneficiaries receive $15,000.
This final expense lump sum, which is paid often as soon as one business day, will help your loved ones cover your funeral, in addition to medical expenses you may have accumulated.
See what you’d pay for life insurance
Lifelong Coverage
Unlike term life insurance which is designed to last a specific period of time, final expense life insurance is a type of permanent life insurance—it’s active until you die. With most final expense products, you are only required to pay the policy’s premiums until you turn 95 years old. Even if you are still alive, your final expense policy is still active, but you no longer have to pay for it.
Graded Death Benefit
Something to note is that final expense policies often come with a two-year graded death benefit. This is what that means:
- With the exception of accidental death, if you die within two years of buying a final expense policy, your beneficiaries will only receive the total amount of premiums you paid, plus a little interest, but not the full death benefit amount.
- If you die because of an accident within two years of buying a final expense policy, your beneficiaries will receive the full death benefit amount.
- After two years have passed since buying the final expense policy, your beneficiaries will receive the full death benefit amount no matter what causes your death.
When to Buy Final Expense Life Insurance
If you are relatively healthy, applying for traditional life insurance is a better idea. With traditional term life insurance, you can get more coverage for your premiums. With final expense life insurance, you are paying higher costs in order to be guaranteed approval and not have your health come into play.
However, we understand that sometimes life doesn’t go as planned. Perhaps a friend passed away unexpectedly, they didn’t have life insurance, and you saw its devastating impact. You don’t want your family to deal with the same devastation, but you’ve waited too long and your health is declining. If traditional life insurance isn’t an option, final expense life insurance can save your family from financial struggle.
In 2017, the average funeral cost in the U.S. was $8,755. Also, 75% of families spend more than $10,000 on end-of-life medical bills. If you’re worried about leaving debt behind to your loved ones, it’s not too late to buy life insurance.
About the writer
Natasha Cornelius, CLU
Senior Editor and Licensed Life Insurance Expert
Natasha Cornelius, CLU, is a writer, editor, and life insurance researcher for Quotacy.com where her goal is to make life insurance more transparent and easier to understand. She has been in the life insurance industry since 2010 and has been writing about life insurance since 2014. Natasha earned her Chartered Life Underwriter designation in 2022. She is also co-host of Quotacy’s YouTube series. Connect with her on LinkedIn.
I see that a lot of final expense polices are term policies that end at age 90.
I want a final expense policy that will go beyond age 90. My family members all lived very long lives – past 90. I don’t want to have a policy that ends at age 90 and the insurance company gets my money with no payout.
Hi Barbara, final expense policies may only require premium payments until age 90 or 95, but the coverage lasts your lifetime (or until age 100 or 121). However, if longevity and good health run in your family, a traditional permanent life insurance policy such as whole life or universal life may be a better option for you. Final expense life insurance is beneficial for individuals with poor health, but if you’re still eligible for traditional permanent life insurance, check out those options before buying a final expense policy. You can learn more about the different permanent products here: Guide to Whole Life Insurance and other Permanent Life Insurance
How do fine out if I’m a beneficiary of a final expense funeral plan
Melton, is the person who owns the plan alive or deceased? If they are deceased, you can try putting your information and their information into a few websites: NAIC.org, missingmoney.com and unclaimed.org.
Hello Natasha, your blog has actually helped me to understand that when should i buy final expense insurance for which i was actually thinking for quite sometime now, one more thing i am bothered about is that, what are the tasks of Final Expense Insurance ? Can you please list them?
Hi Lucas,
Final expense life insurance is a type of permanent life insurance that pays your beneficiaries a death benefit (usually a smaller amount often between $5-25K) when you die. Traditionally, this money is used to pay for your funeral, burial, and other end-of-life expenses, but it can be used for anything.