Talking about final expense insurance and end-of-life procedures is not a comfortable topic for most people, but it is one of the most important subjects of discussion among older adults and their families. Death is inevitable for all of us, but many Americans are financially unprepared to handle the expenses related to end-of-life care.
Final expense life insurance is a type of life insurance policy you can purchase to help cover some or all of the costs related to your death. It is a minimal life insurance option that provides a smaller death benefit compared to traditional life insurance. The benefit is meant to cover costs directly related to your death.
After your death, your loved ones can use the money they receive from this policy to pay for expenses related to the end of your life, such as your funeral, burial and certain medical expenses.
However, final expense insurance is not as comprehensive as traditional life insurance, which provides a larger payout for your named beneficiaries.
Traditional life insurance policies serve as a form of financial support for your family members and dependents when you die. Most individuals purchase traditional life insurance while they are young and healthy to protect their families from falling into a financial struggle if they die. Both term and whole life insurance policies can be used to fill gaps in income if you die.
On the other hand, final expense life insurance has one primary goal: to help your family pay for your funeral arrangements. Most Americans purchase a final expense policy when they no longer need comprehensive coverage. For example, older Americans without dependents may opt for a final expense policy since they only require minimal end-of-life coverage for themselves.
This is the main reason why final expense insurance policies tend to be more affordable than traditional life insurance policies. Since the death benefit (i.e., the amount of money your loved ones will receive if you die) is smaller, the monthly premiums are less expensive as well.
Because final expense coverage is meant to cover costs directly related to end-of-life procedures, it is easier to qualify compared to traditional life insurance. Most people interested in purchasing burial insurance can qualify for coverage well into their 80s, whereas traditional life insurance is primarily open to those in the prime of their life.
Wondering if you qualify for final expense life insurance? Continue reading the next slide to learn more about the requirements for purchasing this type of policy.