What Is Final Expense Insurance & Burial Insurance // 2020

By Sa El Published: May 10, 2020

No one wants to leave their family with debt, and final expense insurance can help prevent financial hardship associated with end of life costs.

Burial insurance covers your funeral and cremation costs, meaning your family does not have to pay for these services out of pocket.

final expense insurance

How do you know if you need final expense insurance? And what does it cost? 

I'll answer these questions and more, so you have an accurate idea of when and why to get final expense life insurance.

​In This Article



What is Final Expense Insurance?

Final expense insurance is a policy that focuses on the senior market to help cover your funeral costs and final expenses.

It's a type of whole life insurance that comes with fewer restrictions than other life insurance plans.  

It can be expensive, especially if you are on a set income, but well worth it if you can't get traditional coverage.

Burial insurance only covers funeral costs, but that doesn't mean your family can only use the money for that.

Some people leave enough money to cover more than the burial.

The good news is that your family keeps that extra funds to use as they need it, whether it means covering lingering medical costs or using it for a future vacation.

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Get quotes and sign up online without talking to an agent. But, we are here if you need us. 

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You can get life insurance coverage within minutes of getting your quotes and applying.

Most final expense insurance policies give you up to $40,000 of coverage. You also don't have to go through medical exams or medical records in the same way you would for life insurance.

However, you will probably have a telephone interview to complete your application.

There are a few other points to consider when you're thinking about getting burial insurance:

  • Your premium won't change once you set it
  • Your death benefits will never decrease
  • Your policy won't expire, as long as the premiums are paid.
  • You can borrow from your policy as it gains cash value (not recommended!)

How Does it Work?

Final expense insurance functions much more simply than life insurance. It's more fixed, and it's much easier to qualify.

That's why many people who can't qualify for an underwritten life insurance policy opt instead for burial insurance.

When you sign up for burial insurance, you're getting a policy that benefits your family after your death.

Your beneficiaries will receive a designated un-taxed (usually) amount of money based on your policy coverage. That amount usually ranges from $2,000 to $40,000.

It's essential that you have a responsible beneficiary because once they receive the funds they get to choose what to do with them. 

However, once they receive the payout they can start paying for your final expenses. 

They All Mean the Same Thing

You may have noticed we've used different terms for final expense insurance, so let’s make things clear.

Whether you call it final expense insurance, burial insurance, or funeral insurance, they all serve the same purpose—covering funeral and cremation costs.

Don't worry—no matter which one you ask about, any insurance agent will know what you are talking about and the insurance company should know they're all the same as well. 

Burial Insurance vs. Life Insurance

While burial insurance and life insurance share some similarities, they also have some key differences.

Many people look at the benefits of burial insurance without considering what life insurance may have to offer, and vice versa.

Before you decide to buy funeral insurance or life insurance, consider these aspects of both:

  • Cost
  • Benefits
  • How to qualify
  • Your current health situation

Above all, burial insurance is easier to purchase—you can even buy it over the phone or online; however, the same does not hold true for multiple types of life insurance.

Most life insurance policies, aside from no exam life insurance and guaranteed issue life insurance, require you to submit your medical history and answer health questions, as well as have a medical exam.

Then, the insurance company decides whether they want to give you coverage.

Life insurance gives you more coverage—up to $1,000,000 instantly. Burial insurance only goes up to $40,000 in most cases. At the same time, you pay a similar monthly premium for both.

In many cases, final expense insurance should be your last resort. This policy is quite similar to guaranteed issue life insurance in a handful of ways.

Sometimes, people with high-risk health conditions can't qualify for life insurance, so burial insurance is the next best thing, especially since you don't have to answer health questions.

However, you shouldn't choose burial insurance without first trying to qualify for traditional  life insurance.

Most people can qualify for fully underwritten life insurance, which means your family gets a more substantial death benefit.

Do I Need Final Expense Insurance?

Whether you need final expense insurance depends on your situation. If you already have whole life insurance, you don't need to worry about it.

The death benefit from that policy will cover the cost of your funeral or cremation.

However, if you have term life insurance, you may need it in the future. Since term life insurance expires after you hit a certain age or reach the end of your term, you cease to have that coverage if you die after it ends.

For example, if your policy expires when you're 75, but you live to 97, that insurance no longer covers you. In that case, final expense insurance may be worth considering.

Similarly, as I mentioned in previous sections, some people can't qualify for underwritten life insurance policies.

If this is the case for you, consider getting burial insurance to cover your end of life expenses. The only time you are still unlikely to qualify for funeral insurance is if you have what the insurance industry calls a "knockout" condition.

Knockout conditions usually encompass terminal illnesses like cancer, congestive heart failure, dementia, and others.

Insurance companies consider these to be high-risk conditions, and none will qualify you with any of those types of situations.

​At that point, a guaranteed issue policy would be your only option.

Lastly, if your family can afford to pay for your funeral costs out of pocket, you don't need funeral insurance.

It may benefit them if you do decide to get it, but sometimes you and your family may prefer to leave more money in your will rather than have you pay for burial insurance over several years. 

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Best Features of a Final Expense Policy

Final expense insurance comes with plenty of features that make it stand out as a valuable option.

Especially if you don't qualify for traditional coverage.

While these features still don't make it ideal for everyone, consider the benefits when you're looking at policies.

final expense life insurance

No Medical Exams and Minimal Underwriting

While funeral insurance does have some restrictions for knockout conditions, virtually every other health condition outside that category is fair game.

You don't need to visit a doctor for an exam to qualify, and all you'll need to do is answer a few questions.

You can even get a guaranteed issue policy if you need one. Many insurance companies offer this type of policy, though the rates and coverage will adjust accordingly.

No Surprise Policy Changes

Once you lock into a burial insurance policy, nothing changes. Your premiums won't go up, your death benefit won't go down, and you can count on your policy to stay consistent.

Fast Approval Times

Remember how we said you can purchase your policy online or over the phone? That means you get fast approval on your policy.

While your approval time depends on the insurance company, many will approve you in minutes.

Take it Wherever You Go

Burial insurance is favorable because no matter where you move, you can keep the same policy.

While life insurance policies are often portable as well, pre-need funeral insurance is not. It can be a major problem if you move.

Accrues Value

Burial insurance policies accrue cash value the longer you have them. That means that if you have a medical emergency or need extra money for something, you can borrow from your policy.

It can help take some of the added stress off you and your family if unexpected events require significant expenses.

THE SIMPLY INSURANCE WAY

Life Insurance made easy.

Agents not required.

Get quotes and sign up online without talking to an agent. But, we are here if you need us. 

Unbiased, expert advice.

Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.

Coverage in minutes.

You can get life insurance coverage within minutes of getting your quotes and applying.

The Cost of Final Expense Insurance

As with life insurance, your final expense insurance policy cost per month varies based on your policy, health status, and company. 

Most people pay a minimum of $30, though, for younger, healthier individuals, this number can go as low as $20.

As you grow older and if your health declines, you can pay anywhere from $70 to $120.

People with riskier health conditions may pay even more per month for their premiums.

The more benefits and coverage you sign up for, the higher your premium.

While you may want to purchase an inexpensive final expense insurance policy, you should also consider what you'll get for your premium before you commit.

Also, consider that almost no insurance company will allow you to purchase a burial insurance policy directly through them.

Instead, you have to work with an insurance agent or agency to make a purchase.

Can I Get Burial Insurance With No Waiting Period?

Different insurance companies have different waiting periods for burial insurance.

Sometimes, you have to wait six months, while other times, you have to pay a specific portion of the policy before the company will pay out death benefits.

It is possible to get burial insurance without a waiting period, but you may not find it on your own.

The best way to find policies like these is to work with an independent insurance agency that can help you find insurance companies that offer these types of options.

Your health also factors into your waiting period. Many insurance carriers won't lower the waiting period if you have certain health conditions—specifically those in the knockout category.

With other health conditions, you may be able to reduce the waiting period.

For example, if you have congestive heart failure or use oxygen for any purpose other than sleep apnea, you can't waive the waiting period altogether. 

However, it is possible to get partial death benefits up to 80%, depending on your circumstances, within the first year.

Should I Pre-Pay for My Funeral?

Pre-paying for your funeral is an entirely different plan than purchasing final expense insurance.

While it may sound like a smart idea to pre-pay for your funeral while you can afford it, there are risks associated with this type of plan.

Pre-paid funeral plans cover your funeral services and expenses with the funeral home.

With these types of plans, you consult with the funeral home you want to use for your services, and the director will give you a figure for total expenses.

Pre-paid funeral plans can give you more choice in your burial and funeral, which makes it a viable option if you plan to live in the same place until your death.

If you plan on being buried somewhere else, you may want to reconsider.

I do however, believe that you should pre-plan for your funeral because it will take the burden off of your beneficiaries and save them more money on your funeral. 

THE SIMPLY INSURANCE WAY

Life Insurance made easy.

Agents not required.

Get quotes and sign up online without talking to an agent. But, we are here if you need us. 

Unbiased, expert advice.

Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.

Coverage in minutes.

You can get life insurance coverage within minutes of getting your quotes and applying.

Final Expense vs. Pre-Paid Funeral Plan

Final expense insurance differs in a few crucial areas from pre-paid funeral plans. Pre-paid funeral plans don't carry many of the same benefits you get with burial insurance, which means they may cause you or your family to lose money instead of saving it.

When you opt for a pre-paid funeral plan, your death benefit doesn't go to your family. Instead, the insurance company sends the funds directly to the funeral home for the amount of money they quote you when you choose a pre-paid plan.

This can cause a problem, especially if the funeral home is dishonest. It's an easy way for them to steal money from you, and while this may not be common, it does happen.

Additionally, if you move, pre-paid policies don't usually transfer to funeral homes in another state or country. Burial insurance travels with you wherever you go.

While final expense plans don't involve organizing your funeral plans, they do leave money for your family if there's more than they need to pay for the funeral or cremation costs.

Pre-paid funeral plans are much more rigid, and many people prefer the flexibility of final expense insurance.

Taking Action

Final expense insurance can help pay for your funeral and cremation costs after your death and prevent them from going into debt for end of life costs.

While it may not be your best option compared to no exam or traditional life insurance, for some people, it is the only option, and it has its advantages.

If you need final expense insurance, you can get immediate quotes and coverage by clicking here or on any of the above buttons. 



Sa El

About the author

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.

Sa El


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