A super-easy way to pay for your own funeral and burial costs is to get a final expense insurance policy.
According to LIMRA, about 66% of the Black American participants said paying funeral bills and other final expenses is the primary reason to own life insurance.
What is Final Expense Insurance?
Final expense insurance is a type of whole life insurance policy that comes with a small death benefit and is easier to get approval for from your insurer.
Final expense insurance is also known as funeral insurance, burial insurance, simplified issue whole life insurance or modified whole life insurance. All these marketing terminologies are used by the industry to sell small whole life policies.
The death benefit of a final expense insurance policy in the United States is between $2.000 to $50,000 depending on the insurer you purchased your policy from.
It’s always advisable to compare final expense insurance quotes from different insurance providers before settling with any of them so that you will be sure you are getting the best face value.
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The difference between final expense insurance and normal life insurance is that the insurers sell smaller policies to make it more affordable in final expense insurance, unlike the normal whole life insurance policy that is always more expensive.
What Does a Funeral Insurance Policy Cover?
The death benefits derivable from a final expense insurance policy cover the following expenses: funeral or memorial service costs, cost of embalming and purchasing casket, or cremation.
Beyond these above-listed expenses, the beneficiary of funeral insurance can use the death benefit to pay for property taxes, vacation, college tuition fees for your kids, etc.
Pros of Final Expense Insurance
- Applicants with poor health can easily access this kind of policy.
- The application process for final expense insurance doesn’t require undertaking a medical examination.
- It’s easier to get approved for modified whole life insurance because it requires only a questionnaire and prescription history.
- On many policies premiums never increase (this is true for many types of life insurance).
- Your insurance company cannot decrease your policy’s death benefit unless you borrow against the policy’s cash value or request accelerated death benefits.
- Your beneficiary can use the death benefit for any purpose other than just for funeral or memorial service, embalming and casket, or cremation.
- The death benefit of a funeral insurance is guaranteed as long as premiums are paid and you don’t have a term life insurance policy
- The death benefit is not taxable.
- You can buy a policy with a death benefit of $2,000 to $50,000
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Cons of Final Expense Insurance
- These insurance companies we advised you to avoid always always put confusing or misleading information in their marketing materials.
- Owing to the fact that the death benefit of a burial insurance policy is very low, you could end up paying more in premiums than your beneficiaries would have received as a death benefit.
- If you stop paying your final expense premium, your heirs won’t receive your death benefit when you eventually die.
- Always compare final expense insurance quotes from different insurers because most of them always provide incomplete information about these policies in their marketing materials.
- The death benefit of a burial insurance policy is lower than those of other life insurance policies.
- Most fraudulent insurance agents recommend it more to seniors with no health-related issues by psychologically inflicting fear of dumping expenses on their loved ones when they are gone.
How Does Burial Insurance Work for Seniors?
If you are retired and do not have standing life insurance through your employer nor an individual life insurance policy, you will need burial insurance.
This is even more important if you don’t want the financial burden of your funeral to be on your spouse and/or kids when you die.
Once you contact an insurer to start the application process, you will be asked basic questions about your health.
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The best burial insurance companies are Transamerica, AARP/New York Life, Mutual of Omaha, Colonial Penn, State Farm, Foresters Financial, and AIG.
FAQs
Final expense insurance can be a great way to help protect your loved ones with a small payout upon your death. They can use the funds to pay for any final costs and other expenses while they grieve. Aflac offers final expense insurance at reasonable rates. You can get approved quickly and enjoy lifetime coverage.
What is the average commission on a final expense policy? ›
On average, a final expense insurance coverage plan results in $600 per sale in first-year commission to the insurance agent. Every year the policy is renewed brings in another $50-60 per year in commission. The national average salary of an agent is $103,000.
At what age should you buy final expense insurance? ›
Final expense insurance is generally a type of life insurance for people over 50 years old. However, different insurers have different age requirements, which can range from age 45 to age 85.
What are the cons of burial insurance? ›
Burial insurance tends to be on the pricey side because it's sold to older people and typically doesn't require a medical exam — which means insurers don't have a complete picture of the person they're covering. The rates go up with age, so try to buy burial insurance as soon as you know you need it.
What is the average monthly premium for final expense insurance? ›
How Much Does Final Expense Insurance Cost? The average final expense policy costs between $30-$70 a month and depends on your age, sex, health, coverage amount, and life insurance company you choose.
Why do people buy final expense insurance? ›
If your death would result in a financial burden for your family, a final expense insurance policy is the optimal way to ensure your family doesn't go into debt paying for your funeral costs. That said, consider all the pros and cons of burial insurance to determine when and if it's worth buying this type of coverage.
Is final expense insurance hard to sell? ›
In general, final expense insurance itself isn't hard to learn, with low face amounts, low premiums, and simplified underwriting. Final expense appointments are generally short, and the target market and need for this product are both extensive.
What is the best final expense insurance company? ›
The best burial insurance in May 2024
| Insurer | Age eligibility |
|---|
| State Farm | Issue age: 45 to 80 (50 to 75 in NY). |
| AARP/New York Life | Issue age: 50 to 80 (50 to 75 in NY). |
| American Family | Issue age: 50 to 80. |
| Ethos | Issue age: 65 to 85. |
2 more rowsMay 1, 2024
What are Top 10 Highest Paying Cities for Final Expense Agent Jobs
| City | Annual Salary | Hourly Wage |
|---|
| San Mateo, CA | $96,266 | $46.28 |
| Irvine, CA | $96,034 | $46.17 |
| Orange, CA | $95,569 | $45.95 |
| Richmond, CA | $95,563 | $45.94 |
6 more rowsWaiting period: In some cases, a final expense insurance policy comes with a waiting period. This means a set amount of time must go by before the death benefit is paid. But if there's no waiting period, beneficiaries might receive a payout within 24 to 48 hours after their claim is filed and approved.
Final expense insurance, also referred to as burial insurance, covers end-of-life expenses including funeral arrangements and any remaining medical or legal expenses that will need to be settled by your beneficiary.
What is the best life insurance for seniors? ›
- Guardian senior life insurance policy details. Policy type: Term. ...
- MassMutual senior life insurance policy details. ...
- Northwestern Mutual senior life insurance policy details. ...
- New York Life senior life insurance policy details. ...
- State Farm senior life insurance policy details. ...
- USAA senior life insurance policy details.
Supplementing your life insurance policy with burial insurance will allow you to settle your affairs by covering funeral costs and any other unexpected final expenses. A more robust life insurance policy will protect the financial future of your family and preserve the retirement you and your spouse worked so hard for.
What happens to money left over from a burial insurance? ›
If there is any money left over from the burial policy after these services are performed, the beneficiary can use it to pay for any other expenses you may have left behind, including outstanding loans, medical bills, and legal bills.
Can you be denied burial insurance? ›
You could be denied for pre-existing conditions or risky behavior. Guaranteed issue: You don't have to answer questions or take a physical exam; you are guaranteed coverage. Pre-need insurance: Funeral providers sell these policies through an intermediate insurance company.
How long does final expense insurance take to pay out? ›
Waiting period: In some cases, a final expense insurance policy comes with a waiting period. This means a set amount of time must go by before the death benefit is paid. But if there's no waiting period, beneficiaries might receive a payout within 24 to 48 hours after their claim is filed and approved.
Does final expense build cash value? ›
Your own financial goals: Final expense insurance's wealth-building potential is in between term and permanent life insurance. It offers cash value, but it grows slower than whole life insurance because your premiums are lower.
Is final expense easy to sell? ›
In general, final expense insurance itself isn't hard to learn, with low face amounts, low premiums, and simplified underwriting. Final expense appointments are generally short, and the target market and need for this product are both extensive.
Is it easy to sell final expense insurance? ›
Final Expense Is Simple, But Not Easy
Learning how to sell final expense insurance can give you a great opportunity to succeed financially. I've had multiple agents in my agency make between $200,000 to $300,000 a year. Plus, many of them work 4 or 5 days weekly without overnight travel.
