What Does Final Expense Insurance Cover? The Unusual & Usual

what does final expense insurance cover
What Does Final Expense Insurance Cover? The Unusual & Usual

When someone is determining whether they need life insurance coverage, it can feel like a daunting task.

Of course, you will need to consider the monthly budget and how much coverage is necessary. Along with this are the types of coverage and how each is structured.

When comparing final expense coverage vs. life insurance, there are many differences to take into consideration. Along with the policy structure, it is important to know what the beneficiary can use the death benefit for upon the insured’s passing.

What Does Final Expense Insurance Cover?

Final Expense is whole life insurance that is easy to get and never expires. The death benefit is paid out upon the insured’s passing and can be used to purchase anything necessary. While this money is often spent on final arrangements, it is not restricted to these costs.

The phrase Simplified Issue is used to describe the underwriting process and simplicity of taking out a policy. Some life insurance plans undergo strict guidelines for obtaining coverage.

This is not the case with final expense coverage. The entire process can be done over the phone from the comfort of home.

Whole life insurance lasts for the insured’s entire life, guaranteeing that no one will outlive their coverage. This type of policy has several benefits, including price lock and a cash value that builds.

Final expense insurance works in a very straightforward way.

  1. Take out a policy
  2. Make the monthly premium payments
  3. The beneficiary receives money upon the death of the insured

Take these simple steps to get your final wishes covered.

smiling Elderly couple on computer

The Usual & Unusual Final Expenses

While the death benefit has no restrictions, this coverage is most often taken out for seniors to cover their final expenses. Listed below are the most common expenses, along with some unusual costs that you might not have thought of.

Memorial / Celebration of Life

There are several titles that this service can take on. Whatever someone may choose to refer to the program as it’s a time to mourn the loss of the deceased while celebrating the life they lived. Final expense insurance is meant to help cover these costs.

The costs of this ceremony can rapidly add up when considering the additional aspects of a gathering.

  • Food and beverage
  • Use of facilities/staff for ceremony
  • Transportation of remains
  • Other preparation of the body

Of course, these expenses are not required, but it is good practice to have these costs in mind when planning a service.


This is the process of lying someone into their final resting place.

The average cost in America is $7,643, including items like a casket, service fees, transferring, and more. Not included in this average amount is a grave marker or plot of land. The price can vary by about a thousand dollars in either direction depending on where in the United States these services are being performed.

This method is one of the most traditional ways to proceed. However, it is on the decline across the country due in part to the higher cost.


Cremation is commonly viewed as the less expensive option when someone passes away, but it still costs about $6,280. This national average cost does not include a columbarium or headstone.

In recent years, the cremation rate has outpaced the more traditional interment option, as seen in the predictive graph below.

Cremation Rates Chart

Post Mortem Expenses

There are two primary reasons an autopsy would be elected. The first being if there was any foul play that was suspected to be the cause of death. The second is for family historical reasons and genealogy, basically looking to review any hereditary conditions to be on the lookout for in the remaining lineage.

Outstanding Bills

The remaining bills are nearly unavoidable in this circumstance. Even for those who are debt-free when they pass, there is still a high likelihood of family encountering the following bills.

  • Mortgage
  • Credit Cards
  • Utilities
  • Cable/Internet
  • Phone
  • Car
  • Subscriptions

While not all of these payments will need to be taken into account, this is a good place to start when considering what outstanding bills might need to be paid.

Leaving an Inheritance

Leaving an inheritance can be done in a multitude of ways. Most commonly, the remaining money after final expenses are covered is left to the family.

If leaving a financial legacy is of high importance, taking out a policy to cover this is highly encouraged.

Charity Donations

Regardless of the policy’s size, leaving money to a favorite charity or religious organization is an admirable thing to do.

Charity contributions can be accomplished by naming the organization as a beneficiary or donating any remaining funds after the final costs have been covered.

Medical Bills

Any outstanding medical bills that were not taken care of before death can be covered using the final expense policy payout.medical bills icon

The estate is responsible for paying any outstanding medical bills. If these expenses cannot be paid for by the estate through probate, these costs could fall to the adult children or other family members, depending on the state of residence.

If the insured is on Medicare or Medicaid, it could cover a portion of these outstanding bills.

End of Life Care

End-of-life care or senior care could include some of the following costs.

  • Hospital Care
  • Palliative Care
  • Hospice Care

Statistics show that it is common for seniors to receive at least one of these types of services towards the end of life. Make sure you are financially ready.

Legal Expenses

Specific tax paperwork needs to be filed after someone passes away. If the insured has a trusted accountant that helps file their taxes each year, they could explain this process.

Legal expenses usually slip through the cracks of many end-of-life budgets. Be sure to have the following legal documentation prepared to ease the transition for loved ones.

  • Will
  • Assigned Power of Attorney

Happy couple walking on beach

Other Considerations

As you can see, when you get down into it, many expenses can rapidly start to increase the amount of money needed once someone passes away. This is why it is a good idea to start thinking about coverage sooner rather than later.

Are Any Expenses NOT Covered?

One of the best things about this product is that the money can cover anything. This allows for unrivaled flexibility.

Perhaps the insured changes their mind down the road on their final wishes. This adjustment will not be an issue because they simply need to communicate the new decision to the appointed beneficiary. There is no need to call the insurance company or take any further action.

Selecting a Trustworthy Beneficiary

Selecting a dependable and honest beneficiary is essential. Since the death benefit can be spent on anything without restrictions imposed by the insurance provider, having someone trustworthy is imperative.

As the policyholder, you will want to make sure that you expressly communicate your final wishes to the appointed beneficiary.

Multiple Beneficiaries

Insurance companies allow multiple beneficiaries to be listed in the policy.

Listing more than one beneficiary is a way to keep some accountability throughout the process. Most companies will allow you to split this in whatever percentage you would like. For example, you could list a 50/50 even split or an 80/20 division.

Contingent Beneficiary

Another option that is highly encouraged is the listing of a contingent recipient. If something happens to the primary listed beneficiary in which they cannot receive the money and carry out the final wishes, the person listed as contingent will be awarded the death benefit.

How Quickly Does the Beneficiary Get the Money?

With final expense insurance, the money is given to the recipient within a week (or less) of the filed claim. Other types of coverage take around 30 days before the beneficiary will receive the death benefit.

This money comes in a tax-free lump-sum amount. This is important because the amount intended for the beneficiary is what will end up in their pocket. There will not be any tax payments later on that they will have to account for.

How Do You Select the Best Policy?

When looking into coverage, there is no shortage of agents or insurance companies to purchase through. It is important to read reviews and understand the options.

Within this coverage type, there are four tiers that someone will fall into. Some plans have a waiting period involved, and some do not.

Many plans that you see on TV are considered Guaranteed Issue, which means there is at least a 2-year waiting period before the beneficiary can receive full benefits. Unless the applicant has a terminal or chronic illness, this will not be the best plan option.

Why Work With an Independent Agent?

Working with an independent agency specializing in this coverage will undoubtedly be the quickest and most cost-effective way to get immediate coverage at the lowest rate.

Willamette Life is an independent agency. Give us a call at 844-576-0019 to get a free, no-obligation price estimate today. Unlike other agencies selling coverage from only one company, Willamette Life offers policies from many insurance companies.

Other Coverage Options

The price lock, coverage lock, and flexibility that is appealing with final expense insurance coverage are not available with other types of policies.

Pre Need Coverage

These policies list the mortuary as the beneficiary. This insurance is meant for individuals to preplan the service and needed expenses (casket, plot, urn, etc.) then pay for it in installment or a lump-sum.

However, this type of coverage locks you into your decisions. What if you move? What if you change your mind on your final resting place? There is a lot less freedom when considering this type of plan.

With that being said, there are still a lot of people that pre-need would be good for. It all comes back to what you are looking for.

Term Insuranceclock and calendar time animation

This coverage expires after a certain time period, so it is not recommended as the primary plan to take care of your final expenses. It is also known to fluctuate in price.

For example, AARP promotes its term plan as final expense coverage. However, it terminates upon the insured turning 80 and increases the premiums every five years.

Final Thoughts

a. What does final expense insurance cover is a very common question that is asked. The answer to this is that the beneficiary can use the money to cover anything needed. Getting a policy with flexible spending is helpful to accommodate any needed costs or unexpected bills.

b. Final expense insurance is a type of whole life coverage that comes in smaller policy amounts to make it more affordable for seniors on a budget.

c. Working with an independent agent is the premier way to review many plans at once to find the best fit for your specific needs.

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