Final Expense Insurance: Paying for a Funeral Without Leaving a Bill

• $8,3002023 median cost of a funeral with viewing and burial, per NFDA
• $6,2802023 median cost of a funeral with viewing and cremation
• 85oldest age many final expense policies will accept a new applicant

What final expense insurance actually is

It is whole life insurance with a smaller benefit, usually between $5,000 and $50,000, and some policies go up to $100,000. The premium stays the same for life. The coverage does not run out at a certain age the way term does. When you pass, the money goes to the person you name, who can use it for anything, not only the funeral.

Those funeral numbers above leave out a lot. The National Funeral Directors Association notes its medians do not include the cemetery plot, a vault, or a headstone, and a vault alone is required by most cemeteries. A family can easily face $10,000 or more.

The three kinds of approval

• Simplified issue, full coverage from day one. You answer health questions, no exam. If you are approved, the full benefit pays from the first day. This is the best value for most people in fair or good health.
• Graded benefit. For people with more serious health history. If death comes from illness in the first two years, the policy usually pays back premiums plus interest instead of the full amount. Accidental death is typically covered in full from the start.
• Guaranteed acceptance. No health questions at all, usually ages 45 to 80 and up to about $25,000. It also uses a graded benefit. I only use this when nothing better will approve you, because it costs more per dollar.

The biggest mistake I see is someone in decent health buying a guaranteed acceptance policy from a TV ad. They pay more and wait two years for full coverage when they could have qualified for day one coverage at a lower price.

What it costs

Price depends on age, gender, tobacco use, health and the amount. A healthy 60 year old can often get $10,000 for a modest monthly premium, while the same coverage at 80 costs far more. Because the price is set by your age when you apply, it rarely gets cheaper to wait. I will show you real prices from several insurers before you decide anything.

Is it better than a prepaid funeral plan?

They solve the same problem differently. A prepaid plan locks you into one funeral home. Final expense insurance pays cash to your family, who can use any funeral home, pay medical bills, or cover travel for relatives. Many people like the flexibility. Some newer policies also include free funeral planning help for the family at no extra cost.

Bottom line

If you are over 50 and do not want your family to scramble for funeral money, final expense is the simple fix. Answer the health questions honestly, let me shop it, and aim for a day one benefit if your health allows. For bigger needs like replacing income, read my life insurance guide first.

Common questions