Final expense insurance, sometimes called funeral or burial insurance, covers the costs associated with end-of-life. These costs could include the cost of the funeral, medical bills, or other outstanding bills. While final expense insurance is a good deal for many people, it may not be the best option for people who already have life insurance or people with a sizable savings. Read more to understand whether or not final expense insurance is a good deal for you.
What Final Expense Insurance Covers
Final expense insurance is designed to cover costs associated with the end-of-life, but it can be used for much more than that. Typically, final expense insurance pays somewhere between $2,000 and $50,000 as a death benefit. This death benefit can be used by the family or loved ones to cover anything from funeral and burial costs to remaining medical bills, property taxes, or however the recipients see fit. The flexibility of the policy is one of the major benefits for beneficiaries.
The Cost of Final Expense Insurance
The actual cost of final expense insurance depends on many factors. These include the state in which you reside, your gender, age, overall health, and health insurance status. Depending on your age, death benefit, and health, expect to pay between $50-400 per month. Many different companies can provide quotes, so be sure to compare quotes before buying a policy.
The Benefit of Final Expense Insurance
The major benefits of final expense insurance include the cost and the ease of qualification. These policies are often less expensive than life insurance policies. Of course, this means that the death benefit is a smaller sum than in traditional life insurance. This tradeoff, however, is worth it for many people. Additionally, final expense policies are easier to qualify for than life insurance policies. This is especially appealing to older people in poor health without a life insurance policy and without substantial savings to cover their end-of-life expenses.
The Difference Between Final Expense Insurance and Life Insurance
Final expense insurance is very similar to life insurance. Final expense insurance is essentially a more affordable life insurance policy. As stated above, the death benefit can be used to cover expenses from funerals to property taxes to vacation for the loved ones. Life insurance is generally a larger, more expensive policy that pays a larger sum upon the policy holder’s death.
Another major benefit of final expense insurance is that these policies often have no term limit. For example, some life insurance policies only cover the policyholder until a certain age, such as 85. Final expense insurance policies most often do not have this age restriction. However, this is specific to each policy, so be sure to double-check the age restrictions.
Final expense insurance is a great option for someone who does not want to pay the higher premiums associated with large life insurance policies or who cannot qualify for life insurance. The actual cost of final expense insurance can vary widely depending on different variables. The cost may be worth it to offset expenses loved ones face after your passing.
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