What is Final Expense Insurance?

Final expense insurance is the name given to specially designed whole life insurance policies that are engineered to cover the very limited and immediate cost to one’s passing. There are many names used to describe such insurances like; Burial insurance, funeral insurance and pre-need plan. These plans are usually capped at $50,000.00 in benefit and are marketed heavily towards the over-age 50 crowd.

What can Final Expense be used for?

At it core, the coverage is expected to be used for all costs associated with funeral, cremation, and medical care expenses. Because it is designed to serve the senior market, they usually also carry special riders like grandchildren coverage and nursing home benefit coverage. Being whole life insurance, their permanency and cash value make it the go-to for those who can not afford to contribute to a plan that will cancel. There are also plans in this market that will initiate a contract for those who may otherwise not be eligible for any other type of coverage. These are called guaranteed life plans. These plans do not inquire about the health status of clientele because they mandate that all insured’s first make it through a elimination period where coverage is limited to only the return of premiums. This period is normally 2-3 years depending on the provider. One should be wary of purchasing plans promising “no medical questions” or “guaranteed” without fully understanding the terms of such.

What are the costs of Final Expense?

These plans are priced in-line with your standard whole life plan with the exception of the the planned maturity date. In a standard whole life plan, maturity dates (date the coverage becomes permanent) are usually within the expected life time of the insured. Common dates are attainment of age 65, or within 10 and 20 years of initiating the policy. The shorter the time period between the start of the policy and the date of maturity, the higher the price of the premiums needed. In final expense plans, the common maturity dates are age 101 and 121. Clearly both ages are non-typical of the human life-span. This is done to lessen the price of the policy so that those in the senior market can afford the coverage. For detailed pricing on final expense plans, use our proprietary software to shop rates and check out our rating on who has the cheapest final expense plans on the current market.