Final expense vs guaranteed issue life insurance

Is there a difference?

Logan Sachon

Logan Sachon

Published November 29, 2018

Final expense policies are small life insurance policies meant to be used for funeral expenses. Guaranteed-issue life insurance policies are policies that don't require a medical exam or even a thorough medical questionnaire (some guaranteed issue policies ask questions about terminal illness, but some don’t).

Though final expense policies can be guaranteed-issue life insurance, not all final expense policies are guaranteed-issue. And not all guaranteed-issue policies are necessarily called final expense policies.


What is final expense life insurance

Final expense life insurance is a type of whole life insurance that offers small coverage amounts to people who may not otherwise qualify for another type of policy like traditional term or whole life.

There are two types of final expense policies: simplified-issue life insurance , which requires you to answer a few questions about your health and guaranteed-issue life insurance, which guarantees coverage except for all except those who suffer from certain serious medical conditions.

The term "final expense life insurance" (also called burial insurance) is mostly about branding: you can buy a simplified-issue life insurance policy or guaranteed-issue life insurance policy for any reason, not just so your loved ones can pay for your funeral. But "final expense insurance" is industry shorthand for whole life policies with low death benefits that most people can qualify for, even if they're in poor health.

Final expense policies are one of two types:

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Final expense insurance vs. term life insurance

  • Final expense insurance is easier to qualify for than traditional term or whole life When it comes to term life insurance – which lasts a limited length of time – your health and age greatly affect your insurance rates, and you may even get outright declined (although it's rare). Final expense policies are not as strict about your health ratings: simplified-issue policies don't require a medical exam, and many guaranteed-issue policies don't ask health questions at all. ​

  • Final expense insurance is more expensive than term life for comparable coverage amounts A $25,000 death benefit from a final expense policy will be more expensive than a $25,000 death benefit for a term life policy.

  • Final expense insurance is available in lower coverage amounts than term life. The smallest term life policy you can purchase is $25,000, while final expense policies start at $2,000 or $5,000. But term policies also go up to $10 million, while final expense policies top out at $25,000 to $50,000, depending on the policy type. ​

  • Most final expense policies are only available to older applicants Final expense insurance policies are generally only available to to people between the ages of 50 and 85. Term life insurance is available for applicants 18 to 80.
    ​ Even if you're a senior or have health issues that you think may disqualify you for a term life insurance policy, you should get term life quotes. People with health conditions like diabetes or a history of cancer, which were major roadblocks a few years ago, can often still qualify for term life insurance. It's important to get quotes from several companies, as each company approaches underwriting differently and your rates can vary by company.

And considering the cost of final expense and guaranteed-issue life insurance, older applicants may still find it more cost-effective to buy a term policy. You're likely to get higher death benefit options or lower premiums, or both.
​ Don't rush into an option that might be the wrong financial choice. Get a free term life insurance quote and talk to a licensed expert about your coverage options so you make the right decision in protecting your loved ones.

Further reading

Group life insurance

Life insurance is a popular workplace benefit. Learn why it may not be enough to protect your financial goals.


Cash value life insurance

Cash value life insurance provides insurance and an investment-style savings component. Is it the right option for you?


No medical exam life insurance

Want to skip the life insurance medical exam? You may be able to with a no-exam policy.


Survivorship life insurance

Should spouses buy a policy that pays out only after they both pass? Here are the pros and cons.


About the author

Insurance Expert

Logan Sachon

Insurance Expert

Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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