Final expense insurance is a type of insurance policy designed for families to cover certain end-of-life costs. Death is not a comfortable topic for most people. But having a financial plan in place could make it easier on your loved ones when it comes time to prepare a funeral or burial services.
Having insurance for burial, funeral or memorial costs could save you thousands of dollars in out-of-pocket expenses. Plus, depending on the policy you choose, you may even be covered for certain types of medical expenses. Continue reading to learn more about final expense life insurance to see if it’s right for you.
When you purchase insurance for burial costs, you are buying a type of life insurance policy. The primary purpose of a life insurance policy is to provide a payout to a beneficiary, which is a person you designate to handle your finances after your death.
Getting a final expense insurance policy could be the best way for your family members to afford your funeral, burial or memorial services. It may even cover other expenses related to your end-of-life care.
A funeral is one of the most expensive services among end-of-life arrangements. On average, a traditional funeral can set you back as much as $12,000. If you do not have a financial strategy in place or haven’t budgeted for this, your family could bear the brunt of this financial load.
Millions of Americans purchase life insurance for funeral expenses to help lower the cost for their families.
Final expense life insurance policies typically cover a range of end-of-life expenses. However, specific coverage options vary depending on the type of insurance plan you have. Most policies offer coverage for some or all of the following end-of-life costs:
- Cremation services
- Memorial events
- Medical expenses
- Outstanding debt
But how much can insurance for burial, funeral and other related expenses truly cover? The total amount of money your family can receive varies depending on the insurance policy and company. Most offer death benefits of up to $50,000.
It’s important to get several final expense life insurance quotes so you can compare the cost of coverage and find a policy that works with your budget. Just like a traditional life insurance policy, final expense policies charge monthly premiums, which is the cost of having the policy.
Premiums vary depending on a few personal factors, such as your age and your health. Generally, you’ll pay a higher monthly premium the older you are. Likewise, if you have a medical condition, you typically must pay a higher premium because the insurance company considers you more high risk.
Final expense insurance premiums usually cost between $20 and $100 per month.
Keep in mind that this type of insurance is a minimal life insurance policy and will not provide comprehensive coverage. It serves as a substitute to term life insurance, which provides a higher death benefit and covers more expenses. Continue reading the next slide to learn more about term life insurance.