Final Expense
What is Final Expense Insurance?
Final expense insurance (also known “burial insurance”) is a form of a whole life insurance policy with a small death benefit. Final Expense policies are easier for seniors to get approval. Often it requires answering only a couple of health-related questions, but a medical exam is not necessary.
Death benefits usually range from $5,000 to $25,000, with the premiums being paid either weekly or monthly. Most often the benefit is designed to cover funeral-related expenses such as the funeral, cremation, embalming, memorial service, and a casket. However, most final expense insurance policies allow the death benefit to be used for any purpose,.
Advantages of Final Expense Insurance
- Policies are widely available, even to applicants with health issues
- No medical exam is called for
- Policy premiums are fixed
- Death benefit is guaranteed, although some plans require a 2yr to 3yr waiting period for full benefit payout.
- The policy is guaranteed to never expire as long as the premiums are being paid
- Death benefit can be used for any purpose and is not taxable
Disadvantages of Final Expense Insurance
- Relatively low death benefits, which may not turn out to be beneficial if the insured person is younger
- One missed premium payment may terminate the policy (also true for other insurance types)
- With a final expense policy you will likely pay premiums for the rest of your lifetime.