Final Expense Insurance: The 2021 Blueprint

Final Expense Insurance
Final Expense Insurance: The 2021 Blueprint

When budgeting for the expenses that come at the end of life there can be a financial shock. Traditional services can cost between $8,000 – $12,000. These costs do not include medical bills, final utility payments, legal expenses, etc.

This is a major burden for family members attempting to grieve and celebrate the life of the deceased.

Fortunately, there is a simple solution to this potential monetary burden.

Final Expense Insurance: The 2021 Blueprint

Final Expense Insurance is uniquely designed for seniors. This is accomplished by offering permanent benefits, cost-effective premiums, and an easy application process. This coverage is vital for families that do not have money set aside for end-of-life expenses.

This blueprint was put together to help individuals understand the basics of final expense life insurance, how to find the best plans, and every question in-between. Our goal is to help you determine if this product is right for you and your family.

Pen and writing

How Does Final Expense Insurance Work?

As a whole life product, there are many features that make this plan great. However, there are two benefits that separate it from a traditional permanent option.

No Health Exams: Final Expense Insurance is underwritten through a simplified issue process. This means there will be no medical exams and you will be able to apply over the phone. The application process will take roughly 30 minutes and the applicant will be asked a series of yes or no health questions. There are plans available that do not ask any medical questions but the price will be higher.

Inexpensive Coverage: Coverage amounts range from $2,000 – $40,000, this is a major difference from a traditional whole life plan in which coverage starts from $50,000 and can extend up into the millions. With lower coverage amounts, the premium will be much more economical each month.

Product Features

No matter who or where you purchase your whole life plan from, there will be three key permanent benefits attached to it.

Price Never Increases: The price will never change and is locked in, this is a top priority for millions of seniors on a fixed income. Making sure you are able to pay all the bills and have money left over to still enjoy your retirement years should be the goal, this product can help achieve that goal.

Coverage Never Decreases: The death benefit and coverage amount will not terminate or decrease, this means your insurance coverage will be there for your entire life. Families and loved ones will have peace of mind knowing that they can celebrate the life of the deceased but not take on the associated costs.

Builds Cash Value: With each payment made a portion goes toward the cash value. Over time the cash value will build and can be borrowed from if the policyholder so chooses.

What Does Final Expense Insurance Cover?

The payout can be used for anything deemed necessary by the beneficiary. One of the best features of this product is the flexibility that it comes with. Family members do not always know what financial needs there will be until after their loved one has already passed. This is especially true if the deceased passes away suddenly.

There is no mandate or guidelines that the carrier places on what final expense insurance covers, however, there is a list of typical items the beneficiary uses the money for after cashing the check.

  • Cremation
  • Memorial/Celebration of Life
  • Interment
  • Medical Bills
  • Credit Cards
  • Post-Mortem Expenses
  • Legal Expenses
  • Charity Donations
  • Other End-of-Life Expenses
  • Remaining Balance on a Mortgage
  • Remaining Car Loan Balances

Final Expense Insurance Coverage with No Exam and No Waiting Period

Obtaining this insurance coverage with no waiting period is possible, but you will need to answer positively to a variety of medical questions. Depending on how you answer these questions will qualify you for one of the four plan tiers.

Regardless of your eligibility, you will never be asked to take a medical exam.

Four Types of Final Expense Insurance Plans

Level: The level plan is designed for applicants who have a limited medical history. Offering immediate coverage and the lowest level of premium prices, if able to qualify this is the best plan option. This is the only plan out of the four that has no waiting period.

Graded: With favorable underwriting and reasonable prices this is a great option for individuals who may have had previous medical concerns or upcoming major surgeries. Due to a more lenient underwriting process, a two year waiting period will be implemented. The first-year death benefit is a percentage of the entire coverage amount with an increased death benefit in year two. Typically full coverage can be awarded after the second year of the policy.

Modified: Offering a standard two-year waiting period and higher prices this plan is not going to be a viable option. If this is the only plan the applicant has qualified for, in some cases it is best to use a highly rated guaranteed issue product that asks no medical questions and has lower premiums.

Guaranteed Issue: Asking no medical questions and approving almost every applicant, this product is designed for those with terminal or chronic medical conditions. This is also an option for anyone who does not want to answer health questions, though it is always advised that applicants go through the underwriting process in an attempt to secure a better policy structure and price.

four plan types

The Cost Of Final Expense Insurance

The price you pay will depend on a handful of factors. Depending on where the senior falls within these aspects, the monthly premiums can change substantially.

How is Price Determined?

There are four elements to determining the price someone will pay.

Health: The applicant’s previous medical history will carry the most weight when determining the price. This is because the more complex the medical history is the higher of a risk it is for the companies to provide coverage. With higher risk comes higher prices.

Age: The longer one waits to take out coverage the more expensive their price will be. Fortunately, once you are approved for coverage the price will never increase and is locked in for life.

Gender: Women on average live four years longer than men do in the USA. This means males are a higher risk to provide coverage to, which leads to men paying more.

Policy Amount: Like most products the more you buy the higher the price will be. The same goes for life insurance, the more coverage that is taken out the more costly the monthly premium.

How Much is Final Expense Insurance Coverage?

The chart below shows the different prices someone can expect to pay depending on health and age.

If you are a senior with a straightforward medical history you can expect to pay towards the lower end of the price range. For individuals with a more complex medical history, the price will be towards the higher end of the price range estimate.

Male

Monthly Premium Range

Non-Smoking Rates

Age$10,000$15,000$20,000
45$26 – $46$37 – $68$48 – $89
50$29 – $58$42 – $77$55 – $101
55$35 – $65$51 – $84$67 – $125
60$43 – $69$62 – $99$82 – $138
65$56 – $86$82 – $125$108 – $184
70$73 – $117$108 – $150$143 – $215
75$99 – $169$148 – $207$196 – $303
80$133 – $246$197 – $368$262 – $539
85$183 – $300$273 – $449$363 – $597

Female

Monthly Premium Range

Non-Smoking Rates

Age$10,000$15,000$20,000
45$22 – $34$32 – $49$42 – $64
50$24 – $46$35 – $53$46 – $74
55$28 – $51$41 – $64$54 – $95
60$33 – $53$48 – $74$62 – $110
65$41 – $65$60 – $91$79 – $135
70$53 – $84$78 – $110$103 – $164
75$72 – $123$107 – $160$141 – $235
80$98 – $175$146 – $262$194 – $383
85$132 – $191$202 – $284$269 – $377

The Best Final Expense Insurance Companies And Plans

This is a list of the best companies with the top product each offers. There is a plan that is right for every specific and unique medical condition, this should be discussed in further detail with a trusted insurance professional. With any purchase it is important to read reviews to make an informed decision.

Logo Icon Companies

AIG

  • Plan Name: Guaranteed Issue
  • Age Eligibility: 50 – 80
  • Death Benefit Size: $5,000 – $25,000
  • Health Questions: None
  • Waiting Period for Benefits:  2-years
  • State Availability: 49 states & DC (excluding NY)
  • A.M. Best Company Rating: A (excellent)

Americo

  • Plan Name: Ultra Protector I
  • Age Eligibility: 50 – 85
  • Death Benefit Size: $2,000 – $30,000
  • Health Questions: Yes
  • Waiting Period for Benefits:  None
  • State Availability: 47 states & DC (excluding MS, NY, & VT)
  • A.M. Best Company Rating: A (excellent)

CVS/Aetna

  • Plan Name: Accendo Level
  • Age Eligibility: 40 – 89
  • Death Benefit Size: $2,000 – $50,000 (depending on age)
  • Health Questions: Yes
  • Waiting Period for Benefits: None
  • State Availability: 39 states & DC (excluding CA, CT, DE, FL, MA, MI, NY, ND, PA, SD, WA)
  • A.M. Best Company Rating: A (excellent)
  • Full CVS/Aetna Review

Foresters Financial

  • Plan Name: PlanRight Level
  • Age Eligibility: 50 – 85
  • Death Benefit Size: $5,000 – $35,000 (depending on age)
  • Health Questions: Yes
  • Waiting Period for Benefits: None
  • States Covered: All 50 & DC
  • A.M. Best Company Rating: A (excellent)

Gerber

  • Plan Name: Guaranteed Acceptance
  • Age Eligibility:  50 – 80
  • Death Benefit Size: $5,000 – $25,000
  • Health Questions: No
  • Waiting Period for Benefits:  2-years
  • State Availability: 49 states & DC (excluding MT)
  • A.M. Best Company Rating: A (excellent)

Guarantee Trust Life

  • Plan Name: The Heritage Plan
  • Age Eligibility: 40 – 90
  • Death Benefit Size: $2,500 – $25,000
  • Health Questions: Yes
  • Waiting Period for Benefits: 2-years
  • State Availability: 48 states & DC (excluding CA & NY)
  • A.M. Best Company Rating: A- (excellent)

Mutual of Omaha

  • Plan Name: Living Promise Level
  • Age Eligibility: 45 – 85
  • Death Benefit Size: $2,000 – $40,000
  • Health Questions: Yes
  • Waiting Period for Benefits: None
  • State Availability: 49 states & DC (excluding NY)
  • A.M. Best Company Rating: A+ (superior)
  • Full Mutual of Omaha Review

Oxford Life

  • Plan Name: Assurance
  • Age Eligibility: 50 – 85
  • Death Benefit Size: $5,000 – $30,000
  • Health Questions: Yes
  • Waiting Period for Benefits: None
  • State Availability: 45 states & DC (excluding AL, MS, MT, NY, WV)
  • A.M. Best Company Rating: A- (excellent)
  • Full Oxford Life Review

Royal Neighbors of America

  • Plan Name: Simplified Issue Whole Life
  • Age Eligibility: 50 – 75
  • Death Benefit Size: $7,000 – $35,000
  • Health Questions:  Yes
  • Waiting Period for Benefits: None
  • State Availability: 43 states & DC (excluding AL, AK, HI, LA, MA, NH, NY)
  • A.M. Best Company Rating: A- (excellent)
  • Full Royal Neighbors Review

Transamerica

  • Plan Name: Immediate Solution
  • Age Eligibility: 45 – 85
  • Death Benefit Size: $1,000 – $40,000 (depending on age)
  • Health Questions:  Yes
  • Waiting Period for Benefits: None
  • State Availability:  All 50 & DC
  • A.M. Best Company Rating: A- (excellent)

Piggy bank and calculator

Is Paying For Final Expense Insurance Worth It?

For families that have no savings designated for end of life expenses, final expense insurance is absolutely critical. For a simple and affordable monthly payment families will be given peace of mind knowing they will be able to honor the deceased and simultaneously avoid taking on a major financial responsibility.

Pros and Cons of Final Expense Insurance

Every senior has a different financial situation, there are a number of items to look into to make sure final expense insurance is worth it for you.

Pros

Cons

Cheap coverageSlightly more expensive than a term plan
Rates never increaseLower coverage amounts than other products
Coverage never terminatesLiving a long time could lead to overpaying
Simplified underwriting (no medical exam)
Builds a cash value over time
The beneficiary receives check quickly
The payout can be used for anything

Crunch the Numbers

To better understand if this product is right for you, for parents, or for other loved ones, all that will be needed is a calculator and basic math skills.

The average life expectancy in the United States is 78.7 years old.

So for example, if a healthy male takes out a $10,000 policy when he is 65 years old, how long would he need to live to be overpaying the amount he could have put aside in a savings account?

Let’s do a comparison of the numbers.

Here is a simple chart to illustrate the amount of money the applicant would pay into the account up until the day he passes away.

Man’s Age

Amount Paid Into Policy

70$3,360.00
72$4,704.00
74$6,048.00
76$7,392.00
78$8,736.00
80$10,080.00

In this sample, the monthly premium would be $56 per month, and it would take just under 15 years (179 months) for him to pay more than what he could have saved.

This adds up to the man beginning to overpay for the policy just before his 80th birthday, which is over the national average lifespan.

Final Expense Insurance vs. Life Insurance

When looking at the financial services market it is easy to be overwhelmed with what seems like hundreds of options to plan for your end of life expenses.

Fortunately, final expense insurance is an affordable whole life policy with permanent benefits that makes it simple to plan for the costs associated with death.

However, there are other products on the insurance market that can help plan for these inevitable costs.

Final Expense Insurance Alternatives

There are other products that can offer a way to plan for the costs associated with death however each of these options comes with drawbacks to be aware of.

Traditional Whole Life Insurance

This product is a pillar in the life insurance industry that includes permanent benefits.

Whole Life Benefits: This plan includes a guarantee that coverage will never decrease or terminate, the price will never increase and with a portion of each payment a cash value will accumulate.

Larger Policy Amounts: The coverage amount for this product typically starts from $50,000 – $100,000 and can raise into the millions. This makes the monthly premium much more expensive than other options on the market.

Tax Incentives: A financial advisor might encourage someone to use this plan to shelter wealth or for tax advantages.

Universal Life Insurance

This product has different types of plans, but all the plans have the same feature in common, it is attached to the financial market.

Premiums Are Not Locked In: Due to the fact that the plan is tied to the financial market, your premiums will fluctuate depending on how the market is doing. This can lead to extreme volatility in how much you will be expected to pay for coverage.

Larger Policy Amounts: Just like a traditional whole life plan, universal life has larger policy amounts as well. This will lead to higher monthly premiums.

Cash Value Tied To Market: How the market is currently performing will dictate your cash value, for better or worse.

Term Life Insurance

Term products are marketed heavily to the senior community through direct mailing and tv commercials. These flyers will come from companies like AARP and Fidelity Life, they list statistics to make it look like a great deal but there is always a catch.

Coverage Terminates: The coverage will eventually expire and terminate. This means if you take out a 10-year term policy at the age of 70 the plan will expire when you turn 80 years old. This is, unfortunately, a time that health begins to decline for many seniors and is when they need financial protection most.

Price Is Cheaper: Due to the fact that coverage will eventually terminate, the insurance companies offer a lower rate than other products on the market. Even though some term prices look cheaper at first, some plans actually raise in price the older you get. It is always advised to read the fine print of the plan offer and run a comparison prior to moving forward with coverage.

No Cash Value: There is not a cash value component to this plan, this means you are technically renting insurance coverage each month with no option to borrow from the plan.

Pre-Need Insurance

This plan is taken out directly with the mortuary.

Mortuary Is The Beneficiary: The mortuary is the beneficiary meaning that loved ones and family members will be limited to what they are able to use the payout money on. There is almost always a final utility bill, car payment, or medical expense that will need to be paid. Unfortunately, this plan does not give you the option.

Covers Specific Expenses: The items that are approved to be used with the payout is limited to a specific list. This includes casket, urn, viewing, service, etc.

One Choice Only: When you take out this type of policy you are essentially getting into a long-term partnership with a business. This is fine for some situations but what happens if the mortuary goes out of business in the years to come, or you decide to change your final wishes and be laid to rest in another state. These are things to think about prior to using this pre-need option because your flexibility is limited.

Savings or Investment Account

This option seems like the most straightforward and safe way to plan for the costs associated with death, however, there are still risks involved.

Passing Away Unexpectedly: No one knows when their health will decline, this can leave families and loved ones in a vulnerable financial situation if your saving efforts fall short of the target.

Investment Uncertainty: Another way to save for these costs is by placing your hard-earned money into an investment account to grow. This can come with volatility and your investment may not perform the way that was expected.

Inflation: No one knows how much money will be printed in the coming years, this can lead to inflation rates going up and the value of the dollar going down.

Question and wall

Questions Often Asked

Is Final Expense Insurance Necessary?

Final expense insurance allows families to simply and easily plan for the cost associated with death. Very few families have a savings account designated specifically for end-of-life expenses, that’s what makes this product such a necessity for millions of Americans.

How Much Final Expense Coverage Do I Need?

On average end-of-life costs can range from $8,000 – $12,000. This does not take into account postdated utility bills, car payments, mortgages, etc. It is always better to have more coverage for your family rather than not enough, leaving them to stress when paying the final bills.

Can Life Insurance Cover Final Expenses?

Life Insurance can be used to cover final expenses but ultimately the decision will be left to the beneficiary. There may be other items deemed a higher priority, the beneficiary and family can decide to use another form of payment for the final arrangements of the deceased.

Can Final Expense Insurance be Denied?

Fortunately, Guaranteed Issue plans allow applicants with terminal or chronic medical conditions to receive coverage. The only time an applicant will be denied is if they are mentally incapacitated and not able to coherently understand what they are signing.

Is Paying for Final Expense Insurance Worth It?

Due to the fact that there are no coverage decreases or price increases, each applicant will be able to calculate how many months they would need to pay into the plan to consider it overpaying. Once you run a comparison and calculate the numbers, you will have a better idea if this product will be worth it for you. Even if you live past this threshold the policy builds cash value that can be borrowed from and your family will have permanent financial peace of mind.

Does Social Security Help With Final Expenses?

The Social Security Administration will give up to $255 for a death benefit. This amount is not going to cover even the most basic items for final arrangements. Do not rely on this program to help with the final costs for one’s life.

How do I Choose the Best Final Expense Insurance?

Depending on your health, age, gender, and coverage amount the best plan for individuals will differ drastically. Your previous health history will carry the most weight when determining the best plan for you. The three things that make a policy best for someone is low price, immediate coverage, and death benefit size, all from a financially stable company.

Can I Buy Final Expense Insurance for Others?

Yes, you can, this is a common option for children to buy parents or grandparents coverage. However, there are a number of guidelines that should be followed to have a valid and enforceable contract. There has to be insurable interest and the applicant will need to be involved in the application process. This means they will be required to answer medical questions and sign their name. You cannot get coverage on someone without their approval and willingness.

Are there Final Expense Insurance Plans for Families?

Each policy is individually underwritten and approval will be determined by numerous factors that are specific to each independent applicant. Unfortunately, there are no plans for families as a unit.

calla lily on chair

How To Plan For Final Arrangements

Every senior has a very personal decision to make in regards to their final wishes. To be better prepared there are a few important items to think about.

What is the Cost of a Traditional Service?

In the USA, the average cost for a traditional service with viewing is $7,643 or $6,280 for cremation. This cost estimate can differ depending on many variables including location and the choices made throughout the process.

Not included in these price estimates:

  • Cost of Headstone, Monument, or Marker
  • Cemetery Property, Plot of Land, Columbarium, etc.

Decide on How You Want to be Celebrated

There are many ways for your life to be honored, this can lead to not knowing where to start, fortunately, there are end-of-life sample planning checklists that can help get the process started.

Decisions to Think About

Cremation or Interment: This is a deeply intimate decision that can be supported by spiritual and religious beliefs or for economical and environmental reasons. Depending on what you decide you will want to focus on what type of casket or urn you would like.

Service Type: When deciding how you would like to be honored you have lots of options. Start to think if you would like a service or celebration of life and how big of a gathering will it be. With more people, the costs will rise so take this into account when planning the budget.

Final Resting Place: If you are cremated or interred will determine where your final resting place will be. You can be laid to rest in a cemetery or columbarium. Additional options are having your ashes spread in a special and meaningful place.

Inform Family Members of Your Final Wishes

Regardless of what you decide, the most important step is informing your beneficiary and family members of what your final wishes are. This will allow for loved ones to be on the same page and accurately honor your wishes. The first days after someone dies can be extremely emotional and stressful, giving everyone involved in the planning process a detailed list of your wishes will help give much-needed direction.

Insurance Coverage Application

How To Obtain A Policy

There are three ways to take out a policy and secure coverage.

Direct With The Company: You will most often see this through direct mailing flyers and tv commercials from companies like AARP, Globe Life, Colonial Penn, and many others. The majority of the time these products are expensive guaranteed issue plans. They can also be term plans that expire, which will not be a good option in regards to the policy structure.

Captive Agent: These agents will typically be your local neighborhood insurance provider. There is nothing wrong with these plans but the issue with using this type of agent is that they are handcuffed to one carrier. This means even if another company has a lower price they can only sell the one company they represent. With this product, every company has different underwriting standards and prices, this means you are taking the chance that the company you use will be a good fit.

Independent Agent: This agent works for themself and is free to represent whatever companies that they wish. This means a highly rated independent agent will have access to the perfect company for your health condition and budget. This is your best option to find a great plan structure at the lowest price, let an independent agent take care of the plan and price shopping for you.

Getting Quotes and Buying Online

The best way to find a final expense insurance quote is by using the instant online quote tool on this page. The lower the price the healthier the applicant will need to be to qualify for that specific plan. Once you have secured your quote, speak with an expert about your plan options. Every person’s medical history is different and every company has unique underwriting standards.

Work with an Independent Agent

Working with a highly rated independent agent or agency will provide the best opportunity to find a top tier plan that will be best for both price and plan structure.

Final Thoughts chalk board

Final Thoughts

a. Final expense insurance is a simple and effective option for seniors. This product will help plan for the costs that come with your final arrangements.

b. There are many variables when it comes to finding the best plan, the single most important factor is your medical history.

c. Every carrier has its own underwriting standards, this means it is important to work with an independent agent or agency that has access to a wide variety of providers. This will assure you receive the lowest price and best plan.

Willamette Life specializes in helping seniors prepare and plan for the inevitable costs associated with one’s final arrangements. 

Call us at (844) 576-0019

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