When a loved one passes away, there are final expenses that need to be paid for. A final expense insurance policy can help cover the cost of funeral arrangements, burial costs, and remaining debts.
Burial insurance, another name for final expense, can be easier to get compared to other life insurance policies. This is a type of life insurance designed to pay a small death benefit to your family to help cover end-of-life expenses. Unlike traditional life insurance, which is meant to replace many years’ worth of income, burial insurance is usually suited to older adults who want a smaller policy to cover their funeral costs.
Burial insurance comes with lower coverage amounts than term life insurance and can be best suited for seniors looking to cover funeral costs. Here’s what life insurance shoppers need to know about how final expense insurance works and the benefits of getting a policy.
Final expense insurance is a type of whole life insurance policy that provides a small death benefit at an affordable premium. Like other whole life insurance policies, it provides permanent coverage for the policyholder as long as the premiums are paid. The death benefit is typically anywhere between $5,000 to $35,000. The money is meant to be enough to cover funeral expenses and any other final bills that need to be taken care of. The benefit is paid directly to the beneficiary, who can use the funds however they think is best.
Like other life insurance policies, the cost of the premium will vary based on factors such as age, gender, health, and the coverage amount. On average, final expense policies can cost between $30 to $70 a month. A healthy 60-year-old female can potentially get a $10,000 final expense policy for as low as $44 a month.
A final expense insurance policy generally requires no medical exam as a part of the application process. the applicant only needs to answer a few health questions. Final expense insurance is also more affordable than other policies because the death benefit amount is lower. The average funeral cost today is around $8,000.
Since final expense insurance coverage can be up to $35,000, the policy can be more than enough to cover the cost of a funeral. The primary benefit of a final expense policy is that it reduces the financial burden of the surviving family members. With less worry over the cost of the funeral, the family can focus on arranging a funeral service that the policyholder would desire and focus their attention on grieving.
Final expense insurance is an affordable choice to cover end-of-life expenses and can be a good fit for:
Additional life insurance policy types can provide benefits for policyholders while they’re alive.
Term life insurance
Term life insurance offers coverage for a specific length of time. If the policyholder dies within the policy’s timeframe, a death benefit is paid directly to the beneficiary. The policyholder’s beneficiary can use the money to pay for any remaining debt and daily living expenses. It can help in replacing the loss of income of a young parent. The cost of a term life insurance premium is typically low for young and healthy people. For example, a 35-year-old millennial non-smoker can possibly get a 20-year term policy with a coverage of $250,000 for around $20 to $30. The types of term policies include level term, yearly renewable term, decreasing term, and return of premium life insurance.
Fidelity Life offers RAPIDecision Final Expense which provides policyholders up to $35,000 of coverage. In addition, applicants aren’t required to take a medical exam, policy approval can happen within days, and there’s no waiting period.