Final Expense Insurance

Final Expense Insurance

  • Coverage up to $50,000
  • Underwriting requirements less than that of traditional life insurance policies with larger death benefit amounts
  • Helps pay for funeral, burial, immediate living expense and short term financial obligations
  • Coverage up to age 80-85 depending upon product

Final Expense Overview

Final expense insurance, what is it? Many people use the terms “final expense insurance” and “burial insurance” interchangeably. In the general sense, it is true that they are both designed to provide immediate financial support and help families cover the costs associated with a loved one's death. However, burial insurance specifically refers to an insurance policy that will cover the costs of a person’s funeral and burial. While final expense insurance refers to a life insurance policy that will pay not only the expense of a person’s funeral, and burial, but also some immediate money for short term living expenses, end of life expenses and debt. It is a way for a family to cope with the immediate bills a family might face shortly after a love one's death which include, but are not limited to the funeral and burial.

Purpose of Final Expense Insurance

Final expense policies are designed to serve a few purposes. First, as mentioned above, the policy helps families pay for the costs associated with a loved one’s funeral and burial. Secondly, a final expense policy can help families pay some of their immediate living expenses. These can include expenses such as a mortgage payment or rent, insurance, car payments, credit card debt, food, etc.. Some families also have larger life insurance policies that are designed to pay for these living expenses as well. However, larger life insurance policies of $100,000 or more can take up to three months to issue a payment after a loved one dies. If the loved one that dies is the family’s primary bread winner, the gap in between their death and the larger insurance policy payment can create a hardship. Final expense insurance policies usually pay claims to beneficiaries much faster than larger policies, so they can provide a financial bridge for a family after a loved one’s death.

Final Expense Policy Coverage Sizes

Final expense insurance policies typically provide $25,000 to $50,000 of death benefit coverage. Meaning, typical payouts by an insurance company, sometimes referred to as an “insurance carrier”, to policy beneficiaries usual falls into that range. Although some insurance carriers will classify life insurance policies with death benefits up to $100,000 as a final expense type policy, anything exceeding $50,000 in coverage is usually not considered a final expense policy by most insurance agents and insurance carriers.

Final Expense Insurance Companies

Final expense insurance policies are offered by a large number of insurance companies, which are sometimes also referred to as insurance carriers. Many times, large well known life insurance companies will sell final expense policies in addition to larger more traditional types of life insurance. Their final expense policies may even be the same product as larger death benefits they offer, with the only distinction being the coverage amount. In addition, there are a number of insurance carriers that specialize in final expense policies and do not offer any other types or larger sized life insurance policies. Some of these are national in scope, while others only serve a specific region or limited states. Many of the final expense insurance companies started as off shoots of the funeral home industry. They saw too many families that were put in difficult financial positions when a loved one died and attempted to offer insurance coverage that would help prevent similar hardships. The size of a final expense insurance company, or the markets they serve, isn’t necessarily an indication of their ability to protect families when a loved one dies. The more important factor when choosing a final expense insurance company is finding one that is stable, provides excellent service and can offer the right amount of coverage for your situation. It is best to shop around, compare coverages, companies and the policies offered.