Final expense insurance is a type of life insurance. It offers a smaller, more flexible death benefit for lower monthly premiums. While it is cheaper than traditional life insurance, the monthly costs can still increase depending on your age, coverage options, health, and tobacco use. Below is a guide to help you anticipate the average monthly costs of final expense insurance based on different variables.
Variables that Influence Monthly Premiums
The monthly premium associated with final expense insurance depends on many factors. One major factor is the face amount option. Most policy companies have a minimum “death benefit,” signifying the amount of money your beneficiaries would receive when collecting your policy upon your death. Most often, this minimum is $2,000 to $5,000. The maximum is often around $50,000.
Other variables that affect the monthly premium include age, health, and gender. Typically, older people, men, and people who smoke pay a larger monthly premium. Additionally, some policies require a waiting period while others do not. Each of these variables is explained in further detail below.
Gender:
- In all states except for Montana, men always pay more than women. This is because women have a longer life expectancy than men. Therefore, women will pay a lower premium for a longer time.
Age:
- People who are older will pay more per month. While most companies have a set age for each year, the charts below only show the average monthly premium in the middle of each decade for ease. Policy companies charge more for each year older. If you buy a policy at 65, you pay more monthly than you would have if you purchased that policy at age 55.
Health:
- Many final expense companies stratify consumers into different categories, like high, medium, and low risk. People at the highest risk level with the worst health pay the most in monthly premiums. Some people have an even higher health risk and have to purchase guaranteed acceptance policy options.
- Tobacco use is also included in the health screening because it is a major health risk. If you smoke cigarettes, all companies will flag you as a higher risk. Some companies do not include chewing tobacco, pipe, e-cigarettes, and cigars in their tobacco rating.
Coverage:
- Coverage is the last major variable that influences the price of your monthly premiums. The more end-of-life coverage you want, the more your monthly premiums will be.
- When insurance companies create pricing options, they do so while estimating the number of times consumers will be paying these premiums. People who are expected to pass away sooner will pay fewer monthly premiums, so insurance companies increase their monthly premiums to offset that loss.
Guaranteed Acceptance
Before breaking down the monthly costs, it is first important to understand your options. One option is a guaranteed acceptance option. Some people who have severe medical conditions cannot get a normal policy. These people normally include those with Alzheimer’s disease or dementia, people on dialysis, people with organ transplants, terminally ill patients, patients who use wheelchairs due to chronic disease or illness, and patients with AIDS or HIV. They must purchase a policy that asks no health questions and will guarantee acceptance, known as a guaranteed acceptance policy. These policies require a 2-3 year waiting period. If the policyholder passes away in this period, their beneficiaries do not receive the full-face amount. Instead, they receive the premiums that the holder already paid plus interest, normally about 10% annual interest.
Monthly Costs by Age, Gender, and Smoking
Below are charts that compare the average monthly premiums of final expense insurance policies. These are broken down by age, gender, smoking status, and face amount. The charts also include the guaranteed acceptance option and options with and without a waiting period.
People Age 55
| Gender & Rating | $5,000 | $10,000 | $15,000 | $20,000 |
| Female No Waiting Period | $15.80 | $28.40 | $41.00 | $53.60 |
| Female Tobacco & No Waiting Period | $20.66 | $38.32 | $55.88 | $73.44 |
| Female Guaranteed Acceptance | $18.38 | $35.84 | $53.30 | $70.77 |
| Male No Waiting Period | $19.15 | $35.09 | $51.04 | $66.98 |
| Male Tobacco No Waiting Period | $25.24 | $47.27 | $69.30 | $91.33 |
| Male Guaranteed Acceptance | $23.51 | $46.11 | $68.70 | $91.30 |
People Age 65
| Gender & Rating | $5,000 | $10,000 | $15,000 | $20,000 |
| Female No Waiting Period | $22.11 | $41.01 | $59.91 | $78.82 |
| Female Tobacco & No Waiting Period | $29.60 | $56.00 | $82.40 | $108.79 |
| Female Guaranteed Acceptance | $28.19 | $54.51 | $80.76 | $107.02 |
| Male No Waiting Period | $29.48 | $55.76 | $82.04 | $108.31 |
| Male Tobacco No Waiting Period | $41.10 | $78.99 | $116.88 | $154.77 |
| Male Guaranteed Acceptance | $34.60 | $68.29 | $101.98 | $135.67 |
People Age 75
| Gender & Rating | $5,000 | $10,000 | $15,000 | $20,000 |
| Female No Waiting Period | $37.81 | $72.41 | $107.01 | $141.62 |
| Female Tobacco & No Waiting Period | $48.54 | $94.43 | $140.31 | $186.20 |
| Female Guaranteed Acceptance | $45.60 | $90.29 | $134.98 | $179.67 |
| Male No Waiting Period | $51.37 | $99.53 | $147.69 | $195.85 |
| Male Tobacco No Waiting Period | $67.57 | $132.49 | $197.42 | $262.34 |
| Male Guaranteed Acceptance | $62.79 | $124.49 | $185.74 | $246.98 |
People Age 85
| Gender & Rating | $5,000 | $10,000 | $15,000 | $20,000 |
| Female No Waiting Period | $69.55 | $135.90 | $202.25 | $268.60 |
| Female Tobacco & No Waiting Period | $96.45 | $180.70 | $282.95 | $376.20 |
| Female Guaranteed Acceptance | $103.10 | $204.20 | $305.31 | $406.41 |
| Male No Waiting Period | $93.18 | $183.15 | $273.13 | $363.10 |
| Male Tobacco No Waiting Period | $141.39 | $279.58 | $417.77 | $555.97 |
| Male Guaranteed Acceptance | $150.43 | $298.86 | $447.30 | $595.73 |
It is important to note that the rate at which you purchase the plan is your locked-in rate. That is, you will always pay that monthly fee until you pass away.
Key Takeaways
Final expense insurance is a good way to cover end-of-life expenses for people who have difficulty qualifying or paying for traditional life insurance. Coverage can vary between $1,000 to $50,000. Many different factors affect the monthly premium of final expense insurance. The major factors are age, health, gender, and the coverage amount. Insurance companies have priced the plans so that people who will live longer will pay a lower monthly premium. This means that women, younger people, and healthier people will pay less per month but about the same overall.
To better predict your monthly premium, reach out to us today and speak with a licensed agent.
