Final Expense Life Insurance

Death is something that will come for all of us, but the cost of dying isn't cheap or even affordable for the majority of people. According to statistics from the NFDA (National Funeral Directors Association) , families can expect to pay an average of $7640 for a funeral. Though the figure does not include other expenses like the cost of a vault, the headstone, closing of the ground, etc., all of which can add up to a few thousand dollars.

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One way that people see as a way out of having to spend what for many is an astronomical amount is to opt for cremation. However, in practice, that does not save much, according to the latest NFDA figure. The figures show that cremations worked out to around $5000 on average regardless of what funeral home you choose.

Suffice to say, a person's death expenses are unavoidable, which is why having a final expense life insurance policy is so important. Final expense life insurance can be the perfect insurance for someone who wants to make sure that their expenses after death are covered.

What Is Final Expense Life Insurance?

It is a life insurance with a death benefit. The policy tends to be comparatively easier to approve for a life insurance company. It is also referred to as "funeral insurance," "modified whole life insurance," "simplified issue whole life insurance," or "burial insurance." Usually, these insurance policies have a face value of anywhere from $2,000 to $50,000.

Interestingly a regular life insurance isn't much different from final expense life insurance, except for life insurance companies selling a smaller policy to make it more affordable. The death benefit is meant to cover funeral expenses or memorial service expenses. It can include embalming, cremation, and buying a casket. That said, the beneficiaries of the death benefit have the option to use the money they get for any purpose, which includes maybe taking a vacation or paying their property taxes.

How Do Final Expense Life Policies or Burial Insurance Work?

It is easiest to understand how final expense life insurance works with an example. Let's say that you are retired, which means you no longer have life insurance via your employer, and there is also no individual life insurance policy to cover your final expenses. Also, there isn't a comfortable nest egg which means you are worried about the financial burden that your death may have on your kids and or spouse.

You get in touch with an insurance agent and start the process for a life insurance policy, which will include answering a few questions, especially about your health and type of life. It is essential to keep in mind that while a death benefit is probably an excellent choice, you also need to make sure that the premiums are something you can afford to pay per month. Fortunately, there are quite a few different insurers that offer death benefits, some of which can be small enough for you to afford the premiums. However, despite all of that, you might still not be able to afford the premiums associated with the life insurance policy being offered.

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Typical life insurance monthly rates for women:

  $5,000 $10,000 $15,000 $20,000
60 Year Old Female $18.04 $33.30 $48.18 $63.16
61 Year Old Female $18.86 $34.86 $50.47 $66.68
62 Year Old Female $19.43 $36.62 $53.01 $69.41
63 Year Old Female $20.66 $38.10 $55.53 $72.95
64 Year Old Female $21.38 $39.75 $58.02 $76.39
65 Year Old Female $22.11 $41.62 $60.51 $79.41
66 Year Old Female $23.22 $43.87 $64.30 $84.52
67 Year Old Female $24.53 $46.22 $67.86 $89.61
68 Year Old Female $25.75 $48.77 $71.55 $94.21
69 Year Old Female $27.01 $51.22 $75.26 $99.60
70 Year Old Female $28.32 $53.77 $79.04 $104.21
71 Year Old Female $29.70 $56.76 $83.53 $110.39
72 Year Old Female $30.83 $59.04 $86.94 $114.85
73 Year Old Female $33.28 $64.19 $94.46 $125.13
74 Year Old Female $35.69 $68.66 $101.07 $133.48
75 Year Old Female $37.81 $73.13 $108.08 $143.04
76 Year Old Female $40.73 $79.03 $116.93 $154.82
77 Year Old Female $43.26 $84.25 $124.90 $165.65
78 Year Old Female $45.82 $89.22 $132.27 $175.61
79 Year Old Female $48.21 $94.24 $139.91 $185.66
80 Year Old Female $50.82 $99.61 $147.51 $195.40

Average final expense insurance rates as off 03/25/2021 - these are only estimates.

Average final expense life insurance monthly rates for men:

  $5,000 $10,000 $15,000 $20,000
60 year old male $23.71 $44.33 $64.58 $85.25
61 year old male $25.06 $46.87 $68.59 $90.62
62 year old male $26.39 $49.65 $72.71 $95.87
63 year old male $27.48 $51.73 $75.98 $100.33
64 year old male $28.57 $54.22 $79.66 $104.94
65 year old male $30.24 $57.04 $83.94 $110.85
66 year old male $31.85 $60.45 $89.16 $117.57
67 year old male $33.62 $63.81 $94.20 $124.39
68 year old male $35.37 $67.61 $99.55 $131.77
69 year old male $37.37 $71.65 $105.53 $139.75
70 year old male $39.39 $75.36 $111.41 $147.47
71 year old male $41.42 $79.50 $117.79 $155.96
72 year old male $44.14 $84.83 $125.52 $166.43
73 year old male $46.80 $90.36 $133.93 $177.49
74 year old male $49.62 $95.81 $142.22 $188.39
75 year old male $52.21 $100.98 $149.85 $198.72
76 year old male $55.57 $108.21 $160.65 $212.99
77 year old male $59.36 $115.37 $171.30 $227.31
78 year old male $63.30 $123.36 $183.42 $243.48
79 year old male $67.02 $130.82 $194.51 $258.39
80 year old male $72.28 $141.23 $210.08 $279.02

Typical insurance rates as off 03/25/2021 - these are estimates, thus your own rates will be different.

When is Final Expense Insurance the Right Choice?

Final expense life insurance is a policy structured to assist those who aren't able to get a whole life insurance. The policy is built to mainly absorb any risk that's associated with having a serious medical condition. That means all seniors, many of whom may have poor health, can secure a final expense insurance policy.

Many insurance companies will issue a final expense policy to people up to the age of 85. That said, depending on the insurer and the way that policy is designed, the minimum age may have to be at least 45, with a max-age of 85 at the time of applying. Also, the biggest death benefit or coverage amount you choose may be significantly smaller as you age. So, older people may get reduced death benefits depending on how much older they are. Some policies may go up to $50,000 for people under 55 years of age, but just $25,000 for those who are 76 years of age. Then there are also insurers that offer the maximum death benefit regardless of at what age it is applied for, which may work for many older people who aren't eligible for other policies.

The other upside, if you may, with final expense insurance is that there is no need for a medical exam or allowing the company to access your medical records. But you will have to answer a few questions relating to your health. Again, because of those health questions, everyone isn't going to qualify for a policy with coverage that starts that very same day.

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Guaranteed Issue Final Expense Insurance

Anyone who didn't qualify for a term life insurance policy can apply for what's called "guaranteed issue" life insurance policy. Applicants that have serious health issues may qualify for a policy that may not require a medical exam, showing medical records, or answering questions. The insurance is guaranteed, but they might have a 2-3 year waiting period associated with them before the benefits can be paid.

Now, if the insured party dies during the so-called waiting period, the beneficiaries don't get the policy's death benefit. They will, in most cases, receive a return for all the premiums that the deceased might have paid, but with a bit of interest generally at around 10%.

Conclusion - Is Final Expense Life Insurance Worth it?

Yes, it is worth it especially if you don't have a nest egg or whole life policy. Having a less than ideal answer for a health question does not automatically mean that all insurance companies may reject your application. Some may still offer you immediate coverage but with slightly higher premiums, a guaranteed issue policy, or a graded benefit policy. The key is to shop around till you find something that works best for you. You can also find an agent who is willing to do the leg work for you.