Final Expense Life Insurance

Final expense life insurance, also known as funeral expense insurance, is a type of whole life insurance that directly pays the funeral home listed in your policy for all funeral expenses in the event of death. Final expense life insurance is comforting in the events following a passing, but it doesn’t leave many benefits to the surviving family. Learn why you might need final expense life insurance in our guide below.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Nov 30, 2020

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Final expense insurance is a special kind of whole life insurance. Also known as funeral expense insurance, this type of policy is usually issued for relatively low values, and pays directly to the funeral home named in the policy. As a way to take the burden of your funeral and burial costs off your family, this plan can be ideal, but it will not provide much, if any benefits to your surviving family members.

Why Buy Final Expense Insurance?

If you are single and have very little money, a final expense life insurance policy is important. This type of policy, also called a pre-need” policy, is meant to pay for the final costs associated with funeral and burial expenses. Final expense insurance makes it possible to plan out your own funeral, down to the details of burial and cost of the plot.

Final Expense Insurance and Medical Exams

A final expense policy does not usually require any medical exams or other qualifying procedures. If you are concerned about how to handle your final expenses but have preexisting conditions that make an ordinary term or permanent life policy difficult to get, a funeral expense policy may be just what you have been looking for.

Verify the Beneficiary

Before you sign the contract, it is important to verify the listed beneficiary. Not only should you check their credentials, you should also check with the Better Business Bureau to find out if the funeral home has been the subject of controversial complaints. If you are single, making sure that you are leaving a qualified company in charge of your final needs is up to you.

Verify the Details of the Policy

If you want to be buried in a certain type of casket, make sure it is specified in the contract your final needs policy pays out to. Established funeral homes can help you plan out the details, provide you with options to meet your needs, and may even be able to recommend licensed final expense insurance companies that they deal with on a regular basis.

Guarantees and Annual Reports

Check that the policy value will keep up with inflation and other costs that rise over time. Most insurance companies will provide you with annual reports that indicate the condition of the policy and the accrued value. Keep in mind that changing the beneficiary of a final expense policy is more complicated than for other types of life insurance, because the policy pays out to the company which will handle your final needs.

Alternatives to Final Expense Insurance

There are alternatives to final expense insurance that could be considered as well. These include a whole life insurance policy with a funeral parlor named as a beneficiary. In this case, you can split the pay out between multiple beneficiaries rather than leaving the full amount to only one. Another option is to set up a trust or savings account that you contribute to on a regular basis along with a will written to allocate funds for your final expenses.

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