Final Expense Insurance: The Ultimate Guide (2021)

Final Expense Insurance
Final Expense Insurance: The Ultimate Guide (2021)

There can be a financial shock when budgeting for the final expenses that come at the end of life. A traditional funeral costs between $8,000 – $12,000 and can quickly increase depending on the deceased’s final wishes. This price does 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 an affordable option to help families plan for final expenses.

Final Expense Insurance: The Ultimate Guide (2021)

Final expense insurance is uniquely designed for seniors by offering permanent benefits, low-cost premiums, and an easy application process. This coverage is vital for families that do not have money set aside for end-of-life expenses. Final expense coverage is also known as burial and funeral insurance.

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

Pen and handwriting

Understanding Burial Insurance

As a whole life insurance product, many features make burial plans a great option. However, two benefits of final expense insurance separate it from a traditional whole life policy.

No Health Exams: Funeral insurance is underwritten through a simplified issue process, meaning there will be no medical exams, and you can 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. Final expense plans are available that do not ask any medical questions, but the price will be higher.

Affordable Coverage: The available death benefit amounts range from $2,000 – $40,000. This is a major difference from a traditional whole life plan in which coverage starts around $50,000 and can extend into the millions. Less coverage means lower premiums.

Whole Life Insurance Features

Regardless of the insurance company you purchase whole life final expense coverage from, you will get three important and permanent benefits.

Price Never Increases: The price will never change and is locked in, which is a top priority for millions of seniors on a fixed income. Ensuring you can pay all the bills and have money left to enjoy your retirement years should be the goal. Funeral insurance 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 deceased’s life without taking 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 Can Funeral Insurance Pay For?

The beneficiary can use the payout for anything deemed necessary by the beneficiary. One of the best final expense insurance features 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, a list of typical items the beneficiary uses the money for after cashing the check.

  • Funeral Expenses
  • Cremation
  • Memorial/Celebration of Life
  • Burial
  • 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 Life Insurance with No Exam and No Waiting Period

Obtaining final expense insurance coverage with no waiting period is possible, but you will need to answer various medical questions. Depending on how you answer these questions will qualify you for one of four plan tiers.

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

Four Types of Burial Insurance Plans

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

Graded: With favorable underwriting and reasonable prices, this is a great option for individuals with previous medical concerns or upcoming major surgeries. Due to a more lenient underwriting process, life insurance companies will implement a two-year waiting period. 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, Modified final expense plans are not usually 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: This is the only funeral insurance with no medical questions. Guaranteed issue approves 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. However, applicants should always go through the underwriting process to secure a better policy structure and price.

four plan types and cost

The Cost Of Burial Insurance

The price you pay will depend on a few main factors. Depending on where the applicant falls within these components, 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. The more complex the medical history is, the higher the risk is for insurance carriers to provide coverage. With higher risk comes higher prices.

Age: The longer someone waits to take out a policy, the higher 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 in the USA. This means males are at a higher risk to provide coverage, 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 taken out, the more costly the monthly premium.

How Much is Final Expense Insurance Coverage?

The chart below shows the different quotes 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. The cost will be towards the higher end of the price range estimate for individuals with a more complex medical history.

Female

Monthly Premium Range

Non-Smoking Rates

Age $10,000 $15,000 $20,000
45 $23 – $34 $32 – $49 $42 – $64
50 $24 – $39 $35 – $57 $45 – $80
55 $28 – $47 $40 – $69 $52 – $103
60 $33 – $54 $48 – $80 $63 – $119
65 $41 – $66 $60 – $99 $79 – $146
70 $53 – $80 $78 – $120 $103 – $177
75 $72 – $116 $107 – $173 $142 – $254
80 $98 – $190 $146 – $283 $194 – $411
85 $136 – $220 $202 – $328 $269 – $436

Male

Monthly Premium Range

Non-Smoking Rates

Age $10,000 $15,000 $20,000
45 $27 – $47 $39 – $68 $51 – $89
50 $31 – $56 $44 – $83 $58 – $110
55 $36 – $61 $52 – $91 $69 – $135
60 $44 – $68 $64 – $101 $84 – $149
65 $56 – $91 $83 – $135 $110 – $199
70 $75 – $106 $110 – $158 $146 – $233
75 $100 – $150 $148 – $223 $197 – $328
80 $140 – $232 $208 – $346 $276 – $461
85 $193 – $312 $288 – $467 $382 – $621

The Best Funeral Insurance Companies And Plans

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

Top Final Expense Company Logos

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: Eagle Premier
  • Age Eligibility: 50 – 85
  • Death Benefit Size: $2,000 – $30,000
  • Health Questions: Yes
  • Waiting Period for Benefits: None
  • State Availability: 48 states & DC (excluding 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: 48 states & DC (excluding MA, NY)
  • A.M. Best Company Rating: A (excellent)

Foresters Financial

  • Plan Name: PlanRight Preferred
  • 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 – $20,000 (depending on age)
  • 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)

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)

Royal Neighbors of America

  • Plan Name: Simplified Issue Whole Life
  • Age Eligibility: 50 – 75
  • Death Benefit Size: $7,000 – $30,000
  • 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)

Transamerica

  • Plan Name: Immediate Solution
  • Age Eligibility: 0 – 85
  • Death Benefit Size: $1,000 – $50,000 (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

Who Is A Final Expense Policy Good For?

For families that have no savings designated for funeral expenses, burial insurance is absolutely critical. For a simple and affordable monthly payment, families will be given peace of mind knowing they can honor the deceased while avoiding the major financial responsibility.

Pros and Cons of Burial Insurance

Every senior has a different financial situation. There are several things to look into to make sure final expense insurance is worth it for you.

Pros

Cons

Cheap coverage Slightly more expensive than a term plan
Rates never increase Lower coverage amounts than other products
Coverage never terminates Living 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, your parents, or other loved ones, all that is needed is a calculator and basic math skills.

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

For example, if a healthy male takes out a $10,000 final expense 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 make 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 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, funeral insurance is an affordable whole life policy with permanent benefits that simplify planning final expenses.

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

Burial Insurance Alternatives

Other products 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 rise 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 to gain tax advantages.

Universal Life Insurance

This product has different plan types, but all the plans have the same feature: they are attached to the financial market.

Premiums Are Not Locked In: Since 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: Like a traditional whole life insurance plan, universal life has larger policy amounts. 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 life insurance providers 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: Because the coverage will eventually terminate, the insurance carriers offer a lower rate than other products on the market. Even though some term quotes 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 before 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.

Prepaid Funerals

Prepaid funerals and pre-need insurance can be obtained directly with the funeral home.

Funeral Home is the Beneficiary: The funeral home is the beneficiary meaning that loved ones and family members will be limited to what they can use the payout money on. There is almost always a final utility bill, car payment, or medical expense that must be paid. Unfortunately, this plan does not give you the option.

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

One Choice Only: You essentially get into a long-term partnership with a business when you take out a prepaid funeral plan. This is fine for some situations, but what happens if the funeral home 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 before 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 you 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 mark leaning on wall

Frequently Asked Questions

Is Funeral Insurance Necessary?

Funeral 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?

An average funeral costs 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 than not enough, leaving them to stress when paying the final bills. Taking out a $25,000 life insurance policy can help cover unexpected costs.

Can Life Insurance Cover Funeral 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 deceased’s final arrangements.

Can Final Expense Life 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 unable to coherently understand what they are signing.

Is it Worth Getting Burial Insurance?

Because there are no coverage decreases or price increases, each applicant can calculate how many months they would need to pay into the plan to consider it as 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 final expense insurance policy builds cash value that can be borrowed from, and your family will have permanent financial peace of mind.

What is the Senior Final Expense Life Insurance Program?

Many seniors receive mail promoting a state-regulated senior life insurance program. This information is a misleading marketing tactic used by some life insurance agents. The state regulates all life insurance, so this information is not false, but it is meant to be confusing and generate sales leads. Learn more about these final expense mailers.

Does Social Security Help Pay for Funeral Costs?

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 of one’s life.

How Do I Choose the Best Burial Insurance Policy?

The best plan will drastically differ depending on your health, age, gender, and the coverage amount. 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 are low price, immediate coverage, and death benefit size, all from a financially stable company.

Can I Buy Final Expense Insurance for Someone Else?

It is common for children to buy coverage for parents or grandparents. However, some guidelines need to be followed to have a valid and enforceable contract. There has to be an 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 consent.

Are There Funeral Insurance Plans for Families?

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

calla lily on white chair

How To Plan For Final Arrangements

Everyone 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?

The average funeral cost for a traditional service with viewing is $7,643 or $6,280 for cremation in the USA. 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 a life to be honored. This can lead to not knowing where to start, but fortunately, funeral planning checklists can help get the process started.

Decisions to Think About

Cremation or Burial: This is a deeply intimate decision supported by spiritual and religious beliefs or economic 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 a gathering it will 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 buried, this will play a role in 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 or 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 your final wishes. 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.

life Insurance Coverage Application

How To Get A Burial Insurance 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 final expense insurance companies like AARP, Globe Life, Colonial Penn, Lincoln Heritage, State Farm, 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 regarding 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 life insurance companies 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 for finding 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 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 unique, and every company has different 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.

Burial Insurance is state-regulated. Learn more about your state’s burial and funeral restrictions.

Alabama | Arizona | California | Colorado | Florida | Georgia | Illinois | Indiana | Michigan | Missouri | New Jersey | New York | North Carolina | Ohio | Pennsylvania | South Carolina | Tennessee | Texas | Washington DC

Final Thoughts chalk board

Final Thoughts

a. Final expense insurance is a simple and effective option for seniors that helps to cover funeral costs.

b. There are many variables in finding the best burial insurance plan, but your medical history is the single most important factor.

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

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

Call us at (844) 576-0019

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