Final Expense
Final expense insurance is one of the most thoughtful gifts you can give your family—the assurance that they won’t struggle with funeral expenses during an already difficult time.
So What Is Final Expense Insurance?
Final expense insurance, also called burial insurance or funeral insurance, is a type of whole life insurance designed specifically to cover end-of-life costs. Final expense insurance policies typically range from $5,000 to $35,000 in coverage and are designed to pay for funeral expenses, burial or cremation costs, medical bills, and other final obligations.
Unlike traditional life insurance that focuses on income replacement, final expense insurance addresses the immediate costs your family faces after your passing: funeral home services, casket or urn, burial plot, headstone, flowers, and related expenses. With funeral costs averaging $7,000-$12,000, final expense insurance ensures your loved ones aren’t burdened with these costs during an already difficult time.
Final expense insurance is affordable permanent coverage, often available without medical exams, making it accessible to seniors and those with health conditions who might not qualify for traditional life insurance. Final expense policies provide peace of mind knowing your funeral is pre-funded and your family won’t face financial hardship when saying goodbye.
How Does Final Expense Work?
Small, Affordable Coverage Amounts
Final expense insurance policies are intentionally modest in coverage—typically $5,000 to $35,000. This is because the goal isn’t to replace income or pay off a mortgage, but simply to cover final expenses. The average final expense insurance policy is $10,000-$15,000, sufficient to cover a traditional funeral and burial in most states.
Permanent Lifetime Coverage
Final expense insurance is a type of whole life insurance, meaning coverage lasts your entire life as long as premiums are paid. You’ll never outlive your final expense insurance policy, and your beneficiaries will receive the death benefit whenever you pass away—whether that’s next year or 30 years from now.
Level, Fixed Premiums
Your final expense insurance premium stays the same for life. If you lock in a $50/month premium at age 65, you’ll still pay $50/month at age 85. Premiums never increase due to age or health changes. This predictability makes final expense insurance easy to budget for on fixed retirement income.
Fast Payout to Beneficiaries
When you pass away, your final expense insurance beneficiaries submit a death certificate to the insurance company. Most carriers pay death benefits within 7-14 days, providing immediate funds when your family needs them most. This quick payout helps cover funeral expenses without delay.
Simple Application Process
Most final expense insurance policies feature simplified underwriting:
- Guaranteed issue: No health questions, no medical exam—everyone accepted
- Simplified issue: A few health questions but no medical exam
- Fully underwritten: Medical questions and possibly an exam (lowest rates)
This makes final expense insurance accessible to seniors, those with pre-existing conditions, and anyone who might not qualify for traditional life insurance.
What Does Final Expenses Cover?
Common Final Expenses Covered
Final expense insurance death benefits can be used for any purpose, but are typically intended for:
Funeral Home Services
- Basic services fee ($2,000-$3,000)
- Embalming and body preparation ($700-$1,200)
- Viewing and visitation facility usage ($500-$1,000)
- Funeral ceremony coordination ($400-$800)
- Transportation of remains ($300-$600)
Burial Costs
- Casket ($2,000-$10,000+ depending on material and style)
- Burial vault or liner ($1,000-$3,000)
- Cemetery plot ($1,000-$4,000 in Louisiana)
- Grave opening and closing ($1,000-$1,500)
- Headstone or grave marker ($1,000-$3,000)
Cremation Costs (if preferred)
- Basic cremation ($1,500-$3,000)
- Cremation container ($200-$700)
- Urn ($100-$1,000+)
- Memorial service ($500-$2,000)
Additional Final Expenses
- Death certificates ($10-$25 each, need multiple copies)
- Flowers and memorial arrangements ($300-$800)
- Obituary notices ($200-$500)
- Reception or gathering costs ($500-$2,000)
- Outstanding medical bills
- Credit card debt or personal loans
- Legal and estate settlement costs
Total Average Cost: $7,000-$12,000 for traditional burial, $3,000-$7,000 for cremation
Final expense insurance ensures these costs don’t become a financial burden on your family during an emotionally difficult time.
Types of Final Expense Insurance
Simplified Issue
Simplified issue final expense insurance requires answering a few health questions but no medical exam. Most seniors in reasonably good health qualify for simplified issue final expense coverage.
Features:
- Short health questionnaire (5-10 questions)
- No medical exam required
- Immediate full coverage (no waiting period)
- Lower premiums than guaranteed issue
- Coverage typically $5,000-$35,000
Typical Health Questions:
- Are you currently hospitalized or receiving hospice care?
- Have you been diagnosed with cancer in the last 2 years?
- Do you use oxygen or have end-stage organ disease?
- Have you had a heart attack or stroke in the last 2 years?
Best for: Seniors in average health with manageable conditions like controlled diabetes, high blood pressure, or high cholesterol. This is the most popular final expense insurance option.
Guaranteed Issue
Guaranteed issue final expense insurance accepts everyone regardless of health. No medical questions, no exams, no one is turned down. This makes guaranteed issue final expense insurance ideal for seniors with serious health conditions.
Features:
- No health questions or medical exam
- Everyone accepted (typically ages 50-85)
- Immediate coverage or 2-3 year graded benefit period
- Higher premiums than other final expense types
- Coverage typically $5,000-$25,000
Graded Benefit Period: Most guaranteed issue final expense insurance has a waiting period. If you pass away from natural causes in the first 2-3 years, beneficiaries receive premium refunds plus interest (10-20%) rather than full death benefit. After the waiting period, full benefits apply. Accidental death usually pays full benefit immediately.
Best for: Those with serious health conditions (cancer, heart disease, COPD) who can’t qualify for other final expense insurance types.
Who Needs Final Expense Insurance?
Ideal Candidates for Final Expense Insurance
Seniors on Fixed Income
If you’re retired and living on Social Security, pensions, or limited savings, final expense insurance ensures your funeral costs don’t deplete assets your family depends on. The affordable premiums fit into tight retirement budgets.
Those with Health Conditions
If you have diabetes, heart disease, cancer history, COPD, or other conditions that make traditional life insurance difficult to obtain, final expense insurance (especially guaranteed issue) provides coverage when other options aren’t available.
Parents Who Don’t Want to Burden Children
Many seniors don’t want their children facing funeral expenses. Final expense insurance ensures your children receive immediate funds to cover costs rather than depleting their savings or going into debt.
Those with Limited Savings
If your savings wouldn’t cover funeral costs, final expense insurance fills the gap. Even $5,000-$10,000 in coverage ensures basic funeral expenses are covered.
Anyone Without Life Insurance
If you’ve outlived term life insurance or never purchased coverage, final expense insurance provides affordable permanent protection specifically designed for end-of-life costs.
Those Wanting to Pre-Plan Funerals
Final expense insurance gives you control over your funeral arrangements. You can pre-plan services knowing funds will be available to execute your wishes, relieving family of difficult decisions during grief.
Do I Need Final Expense If I Already Have Savings?
It depends on your overall financial situation. If you have sufficient savings and want those funds available for funeral costs, final expense insurance may not be necessary. However, many seniors prefer final expense insurance because:
- Guarantees funds specifically for funeral (not spent on other things)
- Provides immediate liquidity (savings might be in investments or real estate)
- Protects other assets for family inheritance
- Death benefit typically income-tax-free to beneficiaries
Consider this: Would you rather spend $100/month on final expense insurance or withdraw $10,000 from retirement savings that could continue growing?
Can I be denied final expense insurance?
For guaranteed issue final expense insurance, no one is denied regardless of health. Everyone is accepted.
For simplified issue final expense insurance, you can be declined if you answer “yes” to critical health questions (currently hospitalized, terminal illness, recent cancer diagnosis, oxygen use).
Most seniors qualify for at least guaranteed issue final expense insurance, ensuring everyone can obtain coverage.
What if I outlive my final expense insurance?
Final expense insurance is permanent whole life coverage—you cannot outlive it. As long as premiums are paid, coverage remains in force your entire life. When you eventually pass away (whether at 75 or 105), your beneficiaries receive the death benefit.
Is final expense insurance taxable?
Generally, no. Final expense insurance death benefits are typically income-tax-free to beneficiaries. However, if your total estate exceeds federal estate tax exemptions (over $13 million), estate taxes may apply. For most families, final expense insurance benefits are received completely tax-free.
Can I cancel final expense insurance?
Yes, you can cancel final expense insurance anytime by simply stopping premium payments. Most policies have small cash value, which you can receive as a surrender value. However, once cancelled, coverage ends and you cannot restart the same policy. If you need coverage again, you’ll have to reapply at your new (older) age with higher premiums.
What happens if I miss a payment?
Final expense insurance policies have a grace period (typically 30-31 days) to make late payments without losing coverage. If payment isn’t received within the grace period, the policy may lapse. Some final expense insurance carriers offer reinstatement options within 2-6 months of lapse.
Disclaimer: The information on this page is for educational purposes only and does not constitute insurance or legal advice. Final expense insurance rates, coverage options, and underwriting requirements vary by carrier, age, health status, and state regulations. Guaranteed issue policies may have graded benefit periods during which full death benefits are not payable for natural causes. Funeral and burial costs vary by location and service selections. Contact our licensed insurance agents for personalized guidance and accurate quotes specific to your situation.
