Final Expense Insurance: What is it? Should you get it?

The loss of a beloved is a challenging time that rains pain and grief to the deceased’s family and close friends. The financial burden of making funeral arrangements, hosting mourners, and paying necessary bills is usually left on the family’s shoulders for them to bear along with the loss of their beloved. If the deceased happens to have left behind a medical bill, the weight becomes even more solemn, causing the family to start sourcing for financial help while they should be mourning. 

If you are looking to lessen your family’s financial burden when the difficult time comes, read on to learn about the financial expense insurance. This article will discuss details on:

  1. What final expense insurance is and what it covers
  2. The different types of final expense insurance
  3. How much final expense insurance costs
  4. Who is eligible for the insurance and if it’s worth considering
  5. Who sells final expense insurance and how to apply

What is Final expense Insurance and What Does it Cover?

Final Expense Insurance is a type of life insurance elected to help cover the insured’s final medical, funeral and/or burial costs. The death benefit received through these insurance policies is used to pay for items like a casket, cremation, and other materials required for honoring yourself or a loved one at passing.  

Final Expense Insurance can also be referred to as “Funeral Insurance” or “Burial Insurance”. Like other long-life insurance options, these policies will not expire, however, you’re required to pay the agreed premiums associated with your policy up until the end of your life. This varies from other insurance services in that the payable fee can be high, while the death benefit may be small in comparison.

Keep in mind though that, unlike other insurances that require a medical exam for you to qualify, Final Expense Insurance only requires that you answer a few questions to qualify.

Types of Expense Insurance

Final Expense Insurance comes in two primary packages to choose from:

  • Guaranteed issue life insurance:
    This package is designed for people with severe health conditions that keep them from sourcing other policies and senior citizens who don’t qualify for traditional insurance. Usually, these packages offer coverage amounts that range from $5,000 to $25,000 which are payable to the deceased policyholders elected beneficiaries. In most cases, no medical questions are asked, and it is rare to be turned down when applying for a policy in this category.
  • Simplified issue life insurance:
    Like guaranteed life insurance plans, people applying for this insurance typically don’t qualify for traditional insurance. However, with simplified issue insurance, a detailed questionnaire of your medical history is required, with the exclusion of medical exams. This plan is primarily focused on covering people with moderate health risk and usually offers coverage of up to $50,000.

Cost of Taking the Insurance

The cost of Final Expense Insurance is comparatively higher than those of life insurance due to the type of health risks packages are designed to cover. Premiums might vary depending on age and provider, but you could still end up paying the same amount or even more than a lifelong insurance plan would cost, though with less coverage and fewer benefits.

Who is Eligible for Final Expense Insurance? Is it Worth it?

People who apply for Final Expense Insurance are mostly those that do not qualify for traditional life insurance. This includes:

  • People above a certain age, mostly 65 years of age or older.
  • People with severe health conditions, such as cancer or HIV.
  • People who earn little or no income.

The answer to whether a plan is worth it or not depends on the above factors. If you are younger than 65 years of age and in perfect health, it would be advisable to take traditional life insurance as it is much more cost effective and has better coverage benefits for you.

However, if you are older, suffering from a critical health condition, or can’t qualify for traditional life insurance, then final expense insurance could be an excellent option for you. Note that it is very important that you consult with an expert who can aid you in comparing different policies before you settle on selecting one.

Where and How do You Get Final Expense Insurance?

Most life insurance companies sell some form of funeral or burial insurance. This includes companies like Lincoln and Transamerica. Speak to an insurance expert for more information if you think that final expense insurance is something you or a loved one could benefit from.

Applying for insurance is an easy task, requiring you to sign your policy papers and answer straightforward questions. You might also be required to give your social security details and payment details.