Final Expense Life Insurance: Is it right for you?

Final expense life insurance, also called burial insurance, helps your loved ones pay for your end-of-life medical costs and funeral expenses so they’re not left financially burdened.

• What Is Final Expense Life Insurance?

  

  Final expense life insurance is a type of permanent life insurance that’s designed to help your loved ones with the cost of your funeral and medical bills when you pass away. It can also help cover the costs that come with a burial or cremation, but will likely not leave your loved ones with a lot of money after those expenses are paid.

  There are two types of final expense life insurance: Guaranteed Issue and Simplified Issue.

  Guaranteed issue policies are easy to qualify for, but are typically more expensive and offer lower coverage amounts.

  Simplified issue policies require applicants to answer medical questions, but there is no required medical exam.

• How does Final Expense Life Insurance work?

  Final expense life insurance will remain active as long as you pay your monthly premium. When you pass away, your beneficiaries will receive a death payment.

  Most people purchase final expense life insurance to pay for a funeral, but there’s no requirement that your beneficiaries use the death payout for that reason.

  However, a policyholder can choose a trustworthy beneficiary such as a close friend or family member. They can also name their funeral home of choice as the beneficiary or work with a financial advisor to detail how the money should be spent.

  

• Who is Term Life Insurance for?

  

  Since it’s expensive and typically offers less coverage than other life insurance options, final expense life insurance is best suited for people who do not qualify for another type of life insurance.

  There is no medical exam required, which makes it appealing for people who are older or have pre-existing health conditions.

• How much does Final Expense Life Insurance cost?

  Your insurance rate will be based on your age, gender, health, and the coverage amount.

  For a $25,000 final expense life insurance policy, an average 60-year-old man can expect to pay about $100-$200 per month, industry data show.

  Guaranteed issue life insurance will be more expensive, costing around $186.07 per month. Simplified issue life insurance costs about $97.94 per month.

  

  60 Years Old

  $25,000 Policy

  $100 - $200 per month

• Final Stage Life Insurance vs. Term Life Insurance

  Final stage life insurance is more expensive and often offers less value than term life insurance.

  However, final stage life insurance is permanent, so your policy will not expire. Term life insurance policies are only active for a specific period of time, which means you may outlive the policy and will need to find another life insurance option later in life.

  It’s difficult to qualify for term life insurance if you’re above a certain age or have a pre-existing medical condition. However, it typically offers a much higher payout to your beneficiaries when you pass away.

  Sources

  https://www.policygenius.com/life-insurance/final-expense-life-insurance/
  https://www.lhlic.com/final-expense-insurance/