Life insurance for end-of-life planning
Sure final expense insurance, also called burial insurance, has a pretty depressing name. But it can be very helpful to some people.
Life insurance can be hard for seniors to purchase, for pretty obvious reasons—older people are riskier to insure. Even if you’re only 45 or 50 but you’re experiencing health problems, it can be difficult to get approved for a standard life insurance policy. Life insurance companies often reject seniors and sick people altogether for traditional term and whole life insurance policies.
But many in this position still want life insurance so that their outstanding debts won’t pass on to their children, or so that they’ll be sure there’s enough money to pay for their own burial or funeral costs. You’re not alone—85% of people list end-of-life concerns as a top reason for wanting life insurance.
People who don’t qualify for traditional life insurance because of age or illness still have options. Final expense life insurance provides smaller coverage policies without requiring applicants to meet the same standards as other life insurance policies. In fact, the two main types of final expense insurance require no medical exam in the application process.
(If you’re young and healthy and looking for a term life insurance policy with no medical exam, there’s a different product for you called simplified term life. See our page on simplified term life here.)
Both types of final expense insurance are permanent life insurance policies, meaning that you’ll need to keep paying the premiums until the end of your life to receive the benefits. Upon your passing, the benefit amount will be paid in a tax-free sum to your beneficiaries to settle any outstanding debts.
Final expense life insurance offers many optional add-ons, or riders, similar to those found on other insurance types. Because it is limited compared to other insurance types, riders may require an extra level of approval and applicants interested in it should confirm the rider options available to them. Some popular riders include:
Policyholders can access the death benefit early in cases such as terminal illness.
Allows policyholders to access a portion of the total death benefit if the suffer a chronic illness and need the money to cover the costs of treatment.
Term life insurance is a different kind of life insurance meant to provide financial protection for a set period of time—usually while you have dependents or outstanding debts that could be transferred to others such as student loans. Term life insurance is an affordable way to get the coverage you need. Learn more about term life insurance.