How Does Final Expense Life Insurance Work?
Final expense insurance, which is also commonly known as “burial insurance” or “funeral insurance”, is a type of small whole life insurance policy typically meant to cover your funeral expenses. While the payout money is usually intended to cover final expenses, the funds can be used for any purpose.
Because it’s a type of whole life insurance, the premiums never increase, the coverage will not decrease, it builds cash value, and the policy lasts your entire life.
There are many pros and cons of burial insurance. One of the best and most unique features of final expense insurance is the lenient underwriting. By design, these policies are built to accept applicants who may have a variety of high-risk medical conditions that would otherwise get them outright declined for traditional life insurance products.
There are even final expense policies with guaranteed approval, which means anyone, regardless of their health history, can obtain new coverage.
How Does Term Life Insurance Work?
Term life insurance is a form of temporary life insurance (hence the name “term”). By design, the policy will expire at a predefined date. The policy will either terminate on A) upon reaching a certain age, such as 75 or 80, or B) after a specific period of time, such as 10, 20, or 30 years.
Ultimately, once a term policy terminates, you’re no longer insured, and you will not get your money back. If you wish to maintain life insurance coverage, you will need to purchase a new policy from your existing company or another provider.
In most cases, a term policy will expire around age 80. With some companies, a term policy may have a premium increase every five years (Globe Life is one such example), but some have a fixed rate.
Lastly, you need to be in good health to qualify for a term policy. The reason term insurance is cheaper is that the insurer knows with near certainty that you will not die while the policy is in force. To ensure that outcome, they must have underwriting that only accepts applicants in good health. Ultimately, if you have some pre-existing conditions such as diabetes, it will be challenging, if not impossible, to qualify for a term policy.
Burial Insurance Vs Term Life Insurance Comparison Chart
Cost Comparison: Burial Insurance Vs Term Life Insurance
| Age & Gender | $25,000 Final Expense Insurance | $25,000 Term Life Insurance |
|---|---|---|
| Female age 45 | $52 | $17 |
| Male age 45 | $60 | $24 |
| Female age 50 | $55 | $21 |
| Male age 50 | $71 | $31 |
| Female age 55 | $64 | $31 |
| Male age 55 | $84 | $45 |
| Female age 60 | $76 | $45 |
| Male age 60 | $102 | $68 |
| Female age 65 | $97 | $66 |
| Male age 65 | $130 | $103 |
| Source for monthly final expense insurance rates: Choice Mutual Quote Calculator. Rates are calculated at a non-tobacco rating, and are rounded to the nearest dollar. Term life rates shown would increase every five years, whereas the final expense prices remain fixed for life. All prices shown are valid as of 09/17/2025. | ||
Which Policy Should You Choose?
When comparing final expense insurance vs term life insurance, to determine which one is best for you, it comes down to the answer to the following question:
If you were to die, what would the payout money be used for?
If your answer is to cover your end-of-life expenses, then go with a final expense whole life policy.
Yes, a final expense policy costs more than term life, but it’s guaranteed to last forever. A term policy, although less expensive, is statistically (99% don’t result in a death claim) unlikely to be in force at the time of your death, meaning it won’t be there to prevent your final expenses from becoming a financial burden on your loved ones (the very problem you’re trying to solve).
However, if you answered that the money would be used to cover a temporary need, such as paying off a car note, mortgage, or other temporary expenses, then and only then should you opt for a term policy.
This is the same logical process you should employ when comparing burial insurance vs life insurance.
Frequently Asked Questions
Term life insurance is always less expensive than whole life insurance, assuming, of course, that you’re comparing prices with the same coverage amount. Term insurance is always cheaper because it expires, whereas whole life lasts forever.
Some term life policies require a medical exam, but many do not. For example, the AARP Life Insurance program offers a term life policy without a medical exam.
First, no term life insurance company offers a policy with a two-year waiting period. Therefore, if you are approved for a term life policy with any provider, there will not be a waiting period.
For final expense insurance, many companies offer immediate coverage. Please note that any final expense policy that has no health questions will always have a two-year waiting period.
But be it term life or burial insurance, you must qualify for a policy with no waiting period. You don’t have to take a medical exam, but you must answer health questions and subsequently be approved by whichever provider you’re applying with.
- Nationally licensed life insurance agent with over 15 years of experience
- Personal annual production that puts him in the top .001% out of all life insurance agents in the nation.
Anthony Martin is a nationally licensed insurance expert with over 15 years of experience and has personally served over 10,000 clients with their life insurance needs. He frequently authors entrepreneurial and life insurance content for Forbes, Inc.com, Newsweek, Kiplinger, and Entreprenuer.com. Anthony has been consulted as an expert life insurance source for dozens of high-profile websites such as Forbes, Bankrate, Reuters, Fox Business, CNBC, Investopedia, Insurance.com, Yahoo Finance, and many more.
- Nationally licensed life insurance agent with over 19 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 19 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 14 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 14 years of experience. He has personally helped more than 15,000 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest Youtube channels to help aspiring insurance agents serve their clients better.
- Nationally licensed life insurance agent with over 19 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 19 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 14 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 14 years of experience. He has personally helped more than 15,000 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest Youtube channels to help aspiring insurance agents serve their clients better.
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99% don’t result in a death claim. https://www.thezebra.com/resources/research/life-insurance-statistics/#term-life-insurance
