Final expense life insurance

What is final expense life insurance?

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.)

Types of final expense insurance

Simplified whole life:

• Simplified whole life insurance is for people who may not qualify for fully underwritten life insurance policy, but are considered only moderate risk. You’ll have to answer detailed medical questions, but there’s no medical exam involved. This is your best bet for getting a life insurance policy affordably with coverage up to $50,000.
  → Read our full page on simplified whole life here

Guaranteed whole life:

• Higher-risk individuals who may not qualify for simplified whole life can look into guaranteed whole life. It’s called guaranteed because it basically guarantees it’ll cover everyone with no questions asked about your medical history. Because of this, it’s more expensive than simplified whole life and offers lower maximum coverage amounts, typically at or below $25,000.
  → Read our full page on guaranteed whole life here

How final expense life insurance works

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.

Riders

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:

Accelerated death benefit rider

Policyholders can access the death benefit early in cases such as terminal illness.

Chronic illness accelerated benefit rider

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.

Other types of permanent life insurance

Whole life insurance

Universal life insurance

Variable life insurance

Consider term life insurance

Term life insurance

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.