Final expense insurance, also called burial insurance, is a small, permanent life insurance policy. Like other types of life insurance, the death benefit is typically tax free for your beneficiaries, who can use the money for any purpose.
Permanent insurance offers a guaranteed payout no matter how old you are when you die, whereas term policies expire when you reach a certain age. Here are three more factors to consider:
Coverage
Final expense insurance is just whole life insurance that’s marketed a certain way: to help your loved ones cover costs like your funeral, burial or cremation. Because the policy is relatively small, it may not be appropriate if you want to provide long-term financial security for a surviving spouse, child or dependent adult.
Cost
Final expense policies typically have a death benefit of $5,000 to $50,000, making the premiums more affordable compared to permanent coverage with a larger benefit. However, you may get more coverage per premium dollar if you can afford a larger permanent policy or if you only need term coverage.
Qualification
Because the potential payout is small by insurance company standards, a final expense policy can be easier to qualify for if you have preexisting health conditions. You may have to answer health questions, but you likely won’t need a medical exam to get coverage.
Options
Many people have more options for life insurance coverage than they realize, even if they’re older or not in great health. Life insurance professionals who offer policies from many different carriers can help you find the right coverage at the right price.
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