Final expense insurance is a life insurance policy that has a lower death benefit, usually intended to cover final expenses and burial costs. Also known as burial insurance or funeral insurance, it’s designed for older adults who are ready to make end-of-life plans, typically age 50 and older.
It may be purchased as a secondary policy to supplement benefits from other life insurance or as a form of guaranteed issue coverage that doesn’t require a medical exam.
The premiums for final expense insurance policies are typically higher than many other policies with a lower payout. If you are considered high-risk for insurance carriers, however, final expense insurance may be easier to qualify for than other types of policies. It’s also a good option once you pass a certain age or develop health problems.
Final expense insurance was created to help older adults cover end-of-life costs, like funeral expenses. According to the National Funeral Directors Association, the average funeral cost with embalming, ceremony, and burial can easily add up to $10,000 or more.
A final expense insurance plan prepares you financially for everything that goes the typical funeral cost, including:
The payout from a final expense plan comes with no strings attached, so your loved ones can use it however they need. Many families use the proceeds from a final expense insurance plan to cover costs like:
Take all these costs into consideration when deciding how much final expense insurance to buy. A life insurance agent can help you choose an amount that will meet you and your family’s needs.
There are a range of affordable Fidelity Life products to choose from based on your situation and financial responsibilities.
Since final expense is designed for older adults, it’s generally easier to qualify for than traditional term or permanent life insurance plans. You won’t have to take a medical exam to be considered eligible, and approval happens quickly in most cases.
Final expense is typically a type of permanent life insurance, which means that you’ll be covered for your entire life as long as you continue to pay your policy premiums. Once you purchase a final expense plan, your insurance company is obligated to cover you, no matter what happens with your health.
There are two main types of final expense insurance:
Simplified issue is considered the best type of permanent insurance for people who deal with minor health issues and may not qualify for traditional plans. Instead of a medical exam, applicants answer a health questionnaire as part of the approval process. This allows the insurer to assess the level of risk and determine your premium rates and coverage options. With a short application and no test results to wait for, you can often get approved on the spot.
Simplified issue is also generally the most affordable type of final expense insurance and offers higher coverage amounts than other no-exam policies.
Guaranteed issue works best for people with serious health conditions who aren’t able to qualify for any other type of insurance. This plan is quick to issue with no medical exam, health questions, or any other health requirements. Because the risk is higher, these plans generally offer lower coverage amounts and you may pay significantly more for your coverage than a simplified issue plan. But if you’ve been turned down for other policies due to health reasons, guaranteed issue can help you get the protection you and your family need.
Keep in mind that guaranteed issue often comes with a graded benefit, which means the full benefit is not paid out until the policy has been active for a certain length of time. If you die in the meantime, your family would likely receive a lower payout or be refunded the amount you paid in premiums.
Final expense insurance can prevent your family and loved ones from having to pay out-of-pocket for expenses ranging from burial costs to medical bills to credit card debt. A final expense insurance policy, also known as burial or funeral insurance, has a higher premium and lower death benefit than a conventional policy.
Interested in exploring final expense insurance options? Here’s how it works:
Burial or funeral insurance is a popular life insurance product if you are a mature adult or a senior.
In fact, most carriers offering final expense products have a lower age limit for qualification. Fidelity Life final expense policies, for example, are available when you are age 50.
There are upper age limits for final expense coverage, too, depending on your carrier and policy. You can apply for a Fidelity Life final expense policy up until age 85.
Some policies stay in force until death (assuming premiums are paid), while others pay out at age 100.
For many people, final expense is a logical next step once many of their major financial responsibilities, like raising children and paying mortgages, are past them.
People often shop for final expense insurance when:
Final expense insurance has many benefits for older adults looking to pay for a funeral or related costs. Almost any senior can purchase a final expense plan without a health exam, and they also typically pay out quickly when a claim is made. This allows beneficiaries to avoid out-of-pocket costs.
For many people, final expense insurance can be a better option to cover funeral costs than a prepaid funeral plan. A final expense death benefit is guaranteed, after any required waiting period. Prepaid funeral plans have a number of features that might make them problematic. The funeral home could go out of business, or you may move to a different city after you’ve already paid the money for the prepaid plan.
Other sources of support, like provisions in a will or a Social Security Death benefit, also have limitations. Wills often take time to go through the probate process, requiring your loved ones to wait months for funds, and Social Security benefits rarely exceed a few hundred dollars.
Burial insurance can help you ensure your family doesn’t have to incur the costs of your funeral and burial expenses out-of-pocket or navigate the headaches of a prepaid plan.
If you’re nearing retirement age or already retired, and looking for a way to cover end-of-life costs, final expense is probably a good fit for you.
If you still have bigger expenses, you may want to consider purchasing a term or permanent policy life instead. Fidelity Life offers up to $150,000 in term life coverage up to age 70, and permanent policies with up to $150,000 in coverage until age 85.
Choosing final expense can help ease financial stress for your loved ones by making sure you don’t leave bills and debts behind. It’s an affordable and simple way to take care of your family, even after you’re gone.
During a challenging time, a final expense policy can ease the burden of burial costs, medical bills, and more.
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