Planning for the future involves preparing for unforeseen expenses, especially those related to end-of-life costs. Final expense life insurance is a specialized type of insurance designed to ease the financial burden on your loved ones. In this blog, we’ll delve into the details of final expense life insurance, including its purpose, costs, and how to choose the right policy.

Final Expense Life Insurance Overview

Unlike traditional life insurance policies that may offer broader coverage, final expense life insurance is a type of whole life insurance designed for older adults, and typically provides a guaranteed payout to help loved ones cover the costs of a funeral, burial, or cremation – which can average $10,000 or more. Coverage amounts can range from a few thousand dollars to $40,000. This insurance can also help pay off outstanding medical bills, settle debts, leave money to family members, or cover any other end-of-life expenses.

These policies are easy to qualify for, with no medical exam required. As long as you fall between 50 and 85 years old, you can often get approved for a policy within days.

How Much It Costs

Final expense life insurance premiums typically range from $30 to $100 per month. The exact amount depends on various factors, such as:

  • Age: Older individuals generally face higher premiums due to increased health risks.
  • Health Status: Those with existing health conditions may encounter higher premiums or limitations on coverage.
  • Coverage Amount: Higher coverage amounts will naturally lead to higher premiums. Keep in mind, policies generally top out around $40,000.

When evaluating final expense life insurance, it’s important to weigh the cost against the benefits. Consider the monthly premium payments, but also the peace of mind and financial security it provides your family. For many, the reassurance that their loved ones will not be burdened with financial hardship during a difficult time makes final expense insurance a worthwhile investment.

Types of Plans

There are two types of final expense insurance:

  • Simplified issue final expense insurance: This type is best for people in relatively good health who are looking for a way to cover end-of-life costs. The application includes a few health questions, but there is no medical exam requirement. Coverage amounts for simplified issue policies typically go up to $40,000.
  • Guaranteed issue final expense insurance: This type is best for people whose age or health prevents them from buying other types of life insurance coverage. There are no health requirements at all with guaranteed issue policies, so anyone who meets the age requirements can typically qualify. Coverage amounts generally go up to $25,000.

How to Choose a Policy

It’s often advisable to purchase final expense life insurance earlier in life to lock in lower premiums. But if you’re starting this process late, many insurers offer policies for individuals up to age 85.

To determine a policy that’s right for you and your family, start by estimating the total costs you want to cover – including funeral expenses, medical bills, credit card debts, and any other costs a loved one may incur when you pass.

Once you have an idea of the coverage amount you’ll need, you can start comparing plans and carriers. Below are some of the factors you should take into consideration:

  • Application Processes: Evaluate the application process for different policies. Some may require you to answer health questions, while others offer guaranteed issue options.
  • Coverage Amounts: Make sure the carrier that you select offers the amount of coverage that you’re looking for.
  • Premium Payment Options: Look into the payment options available from each carrier – such as monthly, quarterly, or annual premiums.
  • Provider Reputation and Customer Service: Research the reputation and customer service of the providers you’re considering. Look for reviews and ratings to ensure you choose a reliable company.
  • Options: Some final expense policies come with optional add-ons or riders that can enhance your coverage – such as a Living Benefit Rider (allows you to tap into your policy’s death benefit if you are diagnosed with a terminal illness), Inflation Protection (helps keep the coverage amount in line with rising costs over time), or Waiver of Premium (waives your premiums if you become disabled and are unable to work).

Evaluating these factors will help you determine which plan type aligns better with your needs and budget, balancing accessibility, cost, and coverage.

Conclusion

Final expense life insurance is a valuable tool for managing end-of-life costs and providing financial relief to your loved ones. It’s important to understand the coverage options, costs, and factors influencing premiums to make an informed decision. By assessing your needs, comparing plans, and choosing a reputable provider, you can secure peace of mind knowing that your family will be supported during a difficult time.

If you’re considering final expense life insurance, obtaining a quote is a great first step. Explore your options to find the best plan that fits your needs and budget.