At what age should you buy final expense insurance?

Woman in her 40s thoughtfully holding a cup of coffee

Understanding Final Expense Insurance

The cost of a typical funeral is about $10,000, so it’s important to have some idea of how your loved ones will handle those costs prior to your death. While it might be difficult, planning for your death before it happens is a perfect way to ease the responsibility off family and friends later and gives them the time and space to grieve. Understanding final expense insurance plays a key part in that. 

Also known as burial insurance or funeral insurance, final expense insurance is designed to help cover end-of-life expenses including funerals, medical bills, credit card debt, and anything else that needs to be paid after you pass away. It doesn’t require a medical exam, with coverage amounts ranging from $1,000 to $100,000 and rates starting as low as $2 per week when you shop with SelectQuote.

Is final expense insurance right for me?

Typically, final expense is a good insurance type for seniors and those with health complications, but anyone between the ages of 45-85 can be insured without a medical exam on certain types of final expense plans. There are three types of final expense insurance: simplified issue life insurance, guaranteed issue life insurance and critical illness life insurance.

  • Simplified issue life insurance: Coverage of up to $100,000 for people ages 45-85  based on a medical questionnaire (no in-person exam) and premiums remain level up to age 100.
  • Guaranteed issue life insurance: Guaranteed acceptance if you’re between the ages of 45-85, no medical exam or medical questionnaire, and coverage up to $25,000. This is a good option if you are turned down for simplified issue life insurance based on your answers to the medical questionnaire.
  • Critical illness life insurance: Pays a lump-sum benefit at diagnosis, does not require a medical exam and provides lifetime coverage. 

Final expense premiums tend to be very affordable, but premiums are lower for younger customers. Burial insurance can be combined with other, more robust life insurance policies so the death benefits of those larger policies don’t end up going toward funeral and end-of-life expenses.

Advantages of Final Expense Insurance

There are many advantages of a final expense insurance policy. The pros of final expense insurance go beyond what is listed here, but these are a start to some of the benefits this insurance type can provide:

  • Fixed rates. Once premiums are set they can’t increase. If you lock in a low rate at a younger age, you’re covered for the rest of your life at that rate with most plans. 
  • Lifetime coverage. You will be covered until you die and your death benefit can’t decrease, no matter your age. Your benefits are safe and your family will receive the same amount no matter your age when you die.
  • Affordable premiums. Final expense insurance plans are generally quite affordable. As with all insurance, your quote will depend on factors such as age, gender, health status, and state of residence, but a typical premium for $10,000 coverage is $50-$100 per month.
  • No physical medical exam. There is no medical exam required for any type of final expense insurance. There are some policies that might require you to complete a medical questionnaire, but guaranteed issue policies also exist that include no medical questions. This insurance is often attractive to seniors and those with health problems since they cannot be denied coverage or charged higher rates based on their health.
  • The death benefit can be used for anything. The death benefits of final expense insurance plans are designed to pay for a funeral, and all of the costs that come along with that, but the funds can be used for anything the beneficiary sees fit. 
  • Tax-free death benefit. Your beneficiary will not be taxed on the funds they receive when you die—no matter how the funds are used—because an insurance death benefit is not subject to income taxes.

Disadvantages of Final Expense Insurance

While final expense insurance has many benefits, there may be other types of insurance better suited for your needs. Here are some of the disadvantages of final expense insurance that are important to know before you start shopping:

  • Payouts are smaller. Final expense insurance death benefits are smaller than more complete life insurance policies that are designed with larger payouts, like term life insurance and whole life insurance. If you believe you’ll need a larger payout to cover things like paying off a mortgage or leaving a large inheritance, another type of life insurance might be a better fit.
  • Less bang for your buck. Even though final expense insurance is generally considered affordable, the policies are more expensive per thousand dollars of coverage than other types of life insurance. This is because final expense insurance policies are easier to qualify for and a bigger risk for the insurance company, so you don’t get as much for your money as with other policy types.
  • The death benefit might not cover everything. Funerals are expensive and depending on your coverage, the payout might not cover everything your family needs to take care of after you pass away. The typical funeral, including embalming, space rental, burial and casket costs $10,000. Coverage could fall short if there are additional debts and medical bills to pay after that.
  • Premium costs could be more than the death benefit. If you live long enough, you might end up paying more in premiums than your family will receive as a death benefit. The death benefit is locked in and it does not change, even if you exceed it with premiums.
  • Another type of life insurance could be better for you. Depending on your age, health and needs, another type of policy might suit you and your family better. SelectQuote offers term life insurance (where you’re covered for a set period of time) and permanent life insurance (where you’re covered for your lifetime) as well.
  • The death benefit can be used for anything. This can be either good or bad depending on your beneficiary. The money goes to the person you name as your beneficiary when you die, but there is nothing beyond that governs what they must do with the money.

SelectQuote Can Help You Find the Right Burial Insurance

SelectQuote can help find the right final expense insurance for you. After filling out a brief quote form, you’ll be contacted by a SelectQuote agent who specializes in life insurance. Together, they’ll walk you through the process and answer any questions you have along the way. 

We work with some of the most highly-rated and trusted names in insurance, and our proprietary technology makes searching for life insurance quick and easy. This means we can find the right policy to fit your needs in just minutes, saving you time and money! SelectQuote has over 35 years of experience in finding the right life insurance to meet our customer’s needs. 

More than 2 million families trust SelectQuote for their insurance needs—shop with us today!

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