Pros and Cons of Final Expense Insurance

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A super-easy way to pay for your own funeral and burial costs is to get a final expense insurance policy.

According to LIMRA, about 66% of the Black American participants said paying funeral bills and other final expenses is the primary reason to own life insurance.

What is Final Expense Insurance?

Final expense insurance is a type of whole life insurance policy that comes with a small death benefit and is easier to get approval for from your insurer.

Final expense insurance is also known as funeral insurance, burial insurance, simplified issue whole life insurance or modified whole life insurance. All these marketing terminologies are used by the industry to sell small whole life policies.

The death benefit of a final expense insurance policy in the United States is between $2.000 to $50,000 depending on the insurer you purchased your policy from.

It’s always advisable to compare final expense insurance quotes from different insurance providers before settling with any of them so that you will be sure you are getting the best face value.


The difference between final expense insurance and normal life insurance is that the insurers sell smaller policies to make it more affordable in final expense insurance, unlike the normal whole life insurance policy that is always more expensive.

What Does a Funeral Insurance Policy Cover?

The death benefits derivable from a final expense insurance policy cover the following expenses: funeral or memorial service costs, cost of embalming and purchasing casket, or cremation.

Beyond these above-listed expenses, the beneficiary of funeral insurance can use the death benefit to pay for property taxes, vacation, college tuition fees for your kids, etc.

Pros of Final Expense Insurance

Pros of final expense insurance policy
  • Applicants with poor health can easily access this kind of policy.
  • The application process for final expense insurance doesn’t require undertaking a medical examination.
  • It’s easier to get approved for modified whole life insurance because it requires only a questionnaire and prescription history.
  • On many policies premiums never increase (this is true for many types of life insurance).
  • Your insurance company cannot decrease your policy’s death benefit unless you borrow against the policy’s cash value or request accelerated death benefits.
  • Your beneficiary can use the death benefit for any purpose other than just for funeral or memorial service, embalming and casket, or cremation.
  • The death benefit of a funeral insurance is guaranteed as long as premiums are paid and you don’t have a term life insurance policy
  • The death benefit is not taxable.
  • You can buy a policy with a death benefit of $2,000 to $50,000


Cons of Final Expense Insurance

Cons of final expense insurance cover
  • These insurance companies we advised you to avoid always always put confusing or misleading information in their marketing materials.
  • Owing to the fact that the death benefit of a burial insurance policy is very low, you could end up paying more in premiums than your beneficiaries would have received as a death benefit.
  • If you stop paying your final expense premium, your heirs won’t receive your death benefit when you eventually die.
  • Always compare final expense insurance quotes from different insurers because most of them always provide incomplete information about these policies in their marketing materials.
  • The death benefit of a burial insurance policy is lower than those of other life insurance policies.
  • Most fraudulent insurance agents recommend it more to seniors with no health-related issues by psychologically inflicting fear of dumping expenses on their loved ones when they are gone.

How Does Burial Insurance Work for Seniors?

If you are retired and do not have standing life insurance through your employer nor an individual life insurance policy, you will need burial insurance.

This is even more important if you don’t want the financial burden of your funeral to be on your spouse and/or kids when you die.

Once you contact an insurer to start the application process, you will be asked basic questions about your health.


The best burial insurance companies are Transamerica, AARP/New York Life, Mutual of Omaha, Colonial Penn, State Farm, Foresters Financial, and AIG.

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