Final expense insurance is a whole life insurance policy designed to pay for your funeral costs.
It often goes by the alternate names of end-of-life, burial, or funeral insurance.
It’s a great way to secure peace of mind knowing that your death won’t result in a financial burden for your family.
Upon your death, the insurance company will quickly pay out a tax-free cash benefit to your beneficiary(s).
They can use the money for anything (not just funeral expenses), including medical bills or financial debts.
These plans are typically available to seniors 50-85. However, some providers issue coverage to young adults as low as 18 and as old as 90 (very rare).
Because these plans are designed to cover your final expenses, the amount of coverage you can purchase is much smaller than traditional life insurance policies.
Typically, the coverage options are $50,000 and below.
How Does Final Expense Insurance For Seniors Work?
Final expense insurance requirements are very lax. They don’t require a medical exam, and most companies’ underwriting is pretty lenient.
In other words, seniors with prior health conditions can still qualify for a new policy.
The majority of final expense companies only require applicants to answer some basic health questions.
Plans with health questions, if approved, have no waiting period. Upon making your first payment, you’ll be insured for the full death benefit.
At the same time, some policies have no health questions. Those are called guaranteed acceptance life insurance plans.
With those, you cannot be denied due to health, but there is a two-year waiting period. If you die of natural causes during the waiting period, the insurance company will only refund your money plus a tiny amount of interest.
In the application process, you designate the coverage amount you want to be insured for and who the beneficiaries are.
Most policyholders prefer to make their premium payments monthly. But if you want to pay quarterly, semi-annually, or annually, most insurance companies will allow that.
After you die, your beneficiary(s) need to notify the company to start the claims process. Usually, a life insurance company will have them provide a copy of the death certificate and sign claim forms.
Once the company approves a claim, they typically pay out the respective death benefit within 24-48 hours.
What Does End-Of-Life Insurance Cover?
Final expense insurance for seniors will pay out a cash benefit to your loved ones (or funeral home), so they don’t have to come out of pocket for your end-of-life expenses.
There are no restrictions on how they can spend the payout money, which means they can use the proceeds for non-funeral costs, including:
- Burial costs (including vault, casket & viewing)
- Cremation costs
- Cred card debts
- Medical bills
- Legal bills
- Cemetery fees
- Embalming
- Flowers
- Opening and closing of the grave
- Headstone
Your family members get to keep any unused funds.
How Much Does Final Expense Life Insurance Cost?
The average cost of a final expense policy for $10,000-$15,000 in coverage is roughly $50-$100 monthly, depending on your exact age, gender, state of residence, health, tobacco usage (if any), and how much coverage you purchase.
By far, your age most heavily impacts life insurance rates.
For example, final expense life insurance for seniors over 70 will be double the cost of someone in their 50s.
And final expense over 80 costs nearly double what someone in their 70s would pay.
Also, if you have severe health issues, that might result in higher monthly premiums.
For example, someone with COPD will surely pay a higher premium than someone without COPD.
Below is a table outlining some sample final expense insurance quotes that most seniors can qualify for.
| Age & Gender | $5,000 | $10,000 |
|---|---|---|
| Female age 40 | $12 | $21 |
| Female age 45 | $13 | $23 |
| Female age 50 | $14 | $24 |
| Female age 55 | $15 | $28 |
| Female age 60 | $18 | $33 |
| Female age 65 | $22 | $41 |
| Female age 70 | $28 | $53 |
| Female age 75 | $37 | $71 |
| Female age 80 | $50 | $98 |
| Female age 85 | $70 | $136 |
| Female age 89 | $131 | N/A |
| Male age 40 | $14 | $25 |
| Male age 45 | $15 | $27 |
| Male age 50 | $17 | $31 |
| Male age 55 | $20 | $36 |
| Male age 60 | $23 | $43 |
| Male age 65 | $29 | $54 |
| Male age 70 | $37 | $70 |
| Male age 75 | $50 | $97 |
| Male age 80 | $69 | $135 |
| Male age 85 | $91 | $178 |
| Male age 89 | $180 | N/A |
| Source for monthly prices: Choice Mutual quote calculator. Rates valid as of 05/08/2024. | ||
Types Of Final Expense Policies
There are two kinds of final expense insurance that you can buy.
Each type has a different cost structure and pros and cons.
Simplified issue
This type of policy is commonly known as no exam final expense insurance because you don’t have to complete a medical examination. However, you will have to answer health questions.
Your eligibility is based on how you answer the questions and your prescription history. When you apply, the insurance company will electronically analyze your medication history (with your permission).
Knowing which medications you have been previously prescribed tells them a great deal about your health. Generally, simplified issue life insurance coverage only takes about 10-15 minutes to determine if you’re approved or declined.
Simplified issue plans can have no waiting period where you’re fully insured for natural causes or accidental death once you make your first premium payment.
Guaranteed acceptance
This type of life insurance does not require answering health questions or completing a medical exam. You cannot be denied due to your health history.
These plans always include a 2-3 year waiting period. Any non-accidental death during the waiting period will only result in a refund of your premiums.
In addition, guaranteed issue life insurance plans are more expensive than plans with health questions. The insurer takes on serious risk by not knowing about the applicants’ health.
With higher risk, insurance will always cost more.
How To Qualify For A Final Expense Insurance Policy With No Waiting Period
Final expense insurance with no waiting period means you’re immediately insured for natural and accidental causes of death right away.
Even if you pass away on the day the policy starts (the effective date), the insurance company still has to pay the full death benefit.
Fortunately, final expense policies were built so seniors with health conditions can still qualify for immediate coverage.
Understand that some high-risk health issues, such as having a terminal illness, would make a waiting period inevitable.
It’s important to understand that you must qualify for insurance products with no waiting period.
To do so, you must apply with a company that requires you to answer health questions (no exam necessary).
For example, Mutual of Omaha’s Living Promise coverage has no waiting period, but you must answer their health questions to qualify.
It’s also worth noting that almost all immediate coverage options are only sold through licensed insurance agents.
If you want to buy final expense insurance online with no waiting period, you’ll need to buy through an agency.
Companies like Colonial Penn that allow you to apply online fully or through the mail have a waiting period. Not always, but most of the time.
Pros And Cons Of Final Expense Insurance
- Very fast approvals
- No medical exams required
- Lifelong coverage
- Fixed prices
- Applicants as old as 90 can still qualify
- Tax-free cash payment your family can use any way they desire
- Low face value maximums (usually less than $50K)
- Many providers (not all of them) include a 2-3 year waiting period
- More expensive than other forms of life insurance
- Doesn’t lock in funeral costs at today’s rates
- The death benefit may not be enough to cover your preferred funeral
- It’s possible after many years for the premiums to exceed the death benefit
Do You Need A Final Expense Program?
If you currently have no means to pay for your funeral costs, final expense insurance is the perfect solution to ensure your family isn’t stuck with the burden of unpaid funeral bills.
The National Funeral Directors Association (NFDA) reports that the average cost of a funeral is $9,420 (burial including a vault & viewing).
Most American families cannot stomach a $10,000 unexpected bill.
That is why final expense life insurance is the ideal way to ensure your passing won’t result in a financial burden.
If you currently have enough cash, investments, or other means to pay for your funeral costs, then a final expense policy isn’t necessary.
Sadly, most seniors are not in that situation, and a policy is the only way they can cover their end-of-life expenses.
Final Expense Insurance Vs Life Insurance
It’s common for some seniors to proclaim that they only want final expense burial insurance and don’t want life insurance.
Final expense insurance is life insurance.
A funeral only happens when someone dies, which is why final expense coverage is a type of life insurance.
Learn more about final expense insurance vs. life insurance.
Frequently Asked Questions
Final expense insurance is meant to pay for your funeral expenses, such as the plot, casket, flowers, or anything related to the memorial services. However, your beneficiaries may spend the money on anything, including credit cards, medical bills, or anything else. Also, they keep any unused funds.
A final expense policy generally costs $50-$100 per month for $10,000-$15,000 in coverage. Your rate is based on age, health, gender, resident state, and coverage amount.
There is no difference between final expense insurance and life insurance. Final expense insurance is a specific type of whole life policy meant to pay for all your end-of-life expenses. Like all forms of life insurance, a final expense policy will provide cash to your family, which they can spend on anything.
Typically, final expense policies are available to seniors 50-85. Some go lower than 50 and above 85, but only a few. Ultimately, anyone at any age should buy final expense insurance if their untimely death would constitute a financial burden on their surviving loved ones.
Final expense life insurance is a very worthwhile purchase if you have no financial means to pay for your funeral costs. Policies are typically less than $50,000, so the premiums are affordable due to the small coverage amounts.
Overall, Mutual of Omaha final expense insurance is generally the best provider if you can qualify. They are generally the least expensive, have high coverage options, living benefits are included, and common health issues such as diabetes won’t prevent you from qualifying.
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