A type of whole life insurance, final expense policies offer a relatively small death benefit (typically between $5,000 and $50,000) in exchange for lower premiums and guaranteed coverage. And since it’s whole life, your premium will never change AND your policy builds cash value, which means you can borrow from it during your lifetime.

Who needs final expense insurance?

If you haven’t already paid for your funeral arrangements, you should consider final expense insurance.

According to the National Funeral Directors Association, the average cost of a funeral is around $7,848 (burial) or $6,971 (cremation). Of course, those are national averages. Costs may be higher or lower, depending on where you live.

Even if your estate is enough to cover funeral costs, probate laws mean that it will be six months to a year – or more – before your beneficiaries can access those funds. And while Social Security provides a death benefit, the amount is only $255 – and that’s if you qualify for it.

That’s where final expense insurance comes in. As long as your premiums are up to date, the death benefit is guaranteed.

Who qualifies for final expense insurance?

Just about everyone qualifies for final expense insurance; that’s why it’s so popular. (There may be an age limit, depending on the insurer.) Aside from answering a few health questions, there is no medical exam – nor do you need to share your medical history. That means you can buy a final expense policy even if you have pre-existing medical conditions.

What can my beneficiary use the money for?

Although it’s called final expense insurance, the death benefit can be used for more than funeral expenses, including paying off any debts, such as medical bills.

Please note that, once the death benefit is paid, the recipient(s) can do whatever they please with the money. Choose a beneficiary you trust to honor your wishes.

Additional resources

• ClearMatch Medicare: Find a Medicare Plan
• National Funeral Directors Association: Statistics