top of page

Final Expense Insurance

What is Final Expense Insurance?

Final expense insurance is a type of life insurance with a small death benefit designed to pay for burial or cremation, funeral expenses, and any other end-of-life costs. It’s also called burial insurance.

Covering the expense of funeral proceedings

Many people underestimate the cost of final expenses until faced with the price tag. But that could mean leaving their family with an expected financial burden at a time that’s already emotionally trying. The National Funeral Directors Association (NFDA) says that the median cost of a funeral with a viewing and a burial rings in at more than $7,500.

Final expense insurance comes with a smaller death benefit than other types of life insurance, usually between a few thousand and $50,000. It’s designed specifically to cover end-of-life expenses for the policy owner’s beneficiaries. With it, the policy owner can rest easy knowing the beneficiaries they name will have sufficient funds to cover expenses that arise at the end of their life.

How final expense insurance works

Generally, final expense insurance is a type of whole life insurance policy. That means it will last the insured’s lifetime with fixed premiums and most likely includes a cash value component, although that will be small because of the limited policy size.

Additionally, because of its smaller death benefit, final expense insurance may be more affordable than traditional life insurance. It can be a solution for people unable to afford the premiums of other types of life insurance policies.

Most final expense insurance is simplified issue coverage. That means the insured doesn’t need to sit for a medical exam. As a result, even people in poorer health can usually qualify for these policies.

Once coverage is in place, when the insured passes away, their beneficiaries file a claim with the life insurance provider to be paid the policy’s death benefit. Once paid, they can use that money however they see fit. It can help with cremation or burial, flowers for the funeral, and more. It can also be used for any end-of-life expenses, like final medical bills.

In fact, the policy beneficiaries can use the death benefit however they want. While called final expense insurance, once distributed, the claim money becomes cash. The beneficiaries could use it to pay off debts, to cover the cost of grief counseling, or even take a vacation.

Who needs final expense insurance

If an individual has already established a way to pay for their end-of-life costs, they generally don’t need final expense insurance. If they already have a life insurance policy, for example, a small portion of that death benefit can go to cover these expenses. Individuals who have prepaid their funeral expenses also usually don’t need final expense insurance.

But individuals who don’t have other coverage or prepaid arrangements can provide for their loved ones with this type of insurance. It can be especially helpful for individuals who are older and wouldn’t qualify for or be able to afford traditional life insurance.

Get an instant online quote for life insurance.
bottom of page