No one likes to confront their own death. It’s scary and no one knows what’s on the other side. You’ll leave your loved ones behind. You don’t want to add to their stress because they would struggle to pay for your funeral.
- Top 4 Providers of Final Expense Life Insurance
- What is Final Expense Insurance?
- Types of Final Expense Insurance
- Pros and Cons of Final Expense Life Insurance
- How much does Final Expense Life Insurance Cost?
- Who is Final Expense Life Insurance For?
- Are There Alternatives to Final Expense Life Insurance?
- Preneed Insurance for Final Expense
Top 4 Providers of Final Expense Life Insurance
Most large insurance companies sell final expense insurance. Here’s which ones we recommend.
- AARP: Best Overall
- Globe Life: Best for Affordable Coverage
- Royal Neighbors of America: Best for People with Health Issues
- Transamerica: Best for Immediate Coverage
AARP: Best Overall
American Association of Retired Persons has paired with New York Life to offer final expense insurance. You have to answer one health question and you can get up to $25,000 worth of coverage. You need to be a member of the AARP, and it’s not available in every state. Premiums stay the same and you’re covered for the remainder of your life.
Globe Life: Best for Affordable Coverage
Globe life promises to provide up to $50,000 worth of coverage for $1. If you read the fine print, that’s the promotional rate for the first month only, but after that rates are still reasonable, as low as $3.49 a month.
They won’t offer you a quote online, you have to fill out the form and they send you information by mail.
You can also insure your children and grandchildren with Globe Life.
Royal Neighbors of America: Best for People with Health Issues
You might not have heard of Royal Neighbors of America, but they’ve been around since 1895. They are a non-profit fraternal organization. Their final expense insurance is a simplified whole life policy. It builds cash value and your premiums never go up. There is no medical exam required, but they do have some health questions. However, they’re pretty lenient in what health issues they’ll accept. Here is a partial list:
- Type 2 Diabetes
- Multiple instances of cancer
- Hypertension
- Diverticulitis
- Depression
- Asthma
- Tumors
As an example, a 50-year old man can get $10,000 in coverage for about $40 a month.
Transamerica: Best for Immediate Coverage
If you’re older, you might not want to wait between 1-3 years before a policy is fully in effect. With Transamerica, there’s no waiting period at all. Buy a policy today, you’ll be insured tomorrow.
Coverage ranges from $1,000 to $55,000 and you can apply if you’re between 45 and 85. You can add riders for accelerated death or accidental death as well.
What is Final Expense Insurance?
The average cost of a funeral today is between $7,000 and $10,000. That’s a significant expense, one that you don’t want to saddle your loved ones with when you die. With 40% of Americans unable to come up with an extra $400 to meet an unexpected expense, you can see how important it is to provide enough money for final expenses.
Final expense insurance is most commonly sold as a small whole life insurance policy. Guaranteed Universal Life Insurance has become more and more popular as a choice for final expense insurance as well. These two policies are permanent life insurance types and that way the coverage never expires. If you buy a term life insurance policy for twenty years at the age of 60 and you live past your eightieth birthday, you won’t have that insurance.
Types of Final Expense Insurance
Final expense insurance comes in two types:
- Guaranteed issue life insurance. Learn more What is Guaranteed Issue Life Insurance? Cost and Top Providers
- Simplified issue life insurance
Guaranteed issue life policies will cover anyone, as long as they don’t have a terminal illness. Because almost everyone is accepted, premiums are higher.
Simplified issue life is for people who don’t qualify for a regular life insurance policy, but are considered moderate risk. There is no medical exam, and you can get coverage of up to $50,000.
You should be aware that many whole life insurance policies, even final expense insurance policies, might not pay a death benefit if you die within the first two years of the policy.
Final expense insurance usually has a limit of between $5,000 and $25,000. However, the average funeral is between $7000 and $10,000 and that doesn’t even include the headstone or the cemetery plot.
>>MORE: What is No Medical Exam Life Insurance? And Who is It For?
Pros and Cons of Final Expense Life Insurance
Pros:
- it’s easy to qualify for
- no medical exam
- Acceptance is guaranteed
- Affordable
- Provides peace of mind to remaining loved ones
- Usually offers coverage within a few days
Cons:
- Premiums are high for the amount of coverage you get
- You may qualify for a better policy if you shop around
- Doesn’t have to be spent on funeral. It can be spent for anything by your beneficiaries, including your final debts and expenses.
How much does Final Expense Life Insurance Cost?
That’s the bad news. Because final expense insurance requires no medical exam and everyone who applies gets a policy, you get much less coverage for your money. If you’re in reasonably good health, you can qualify for a final expense life insurance, either a small whole life or a guaranteed universal life insurance policy, for $20-40 a month.
Even if you have health conditions, there are affordable options for you too. For example, Royal Neighbors of America, offers affordable rates, $40-60 a month for a $10,000 policy, to 50-60 year-old seniors with some health issues. See more details in the Best Final Expense Life Insurance Companies below.
Who is Final Expense Life Insurance For?
Seniors who will not qualify for any other type of insurance and have no insurance and no savings could consider final expense insurance. If you are absolutely sure you wouldn’t qualify because of your health, final expense insurance might be worth looking into.
>>MORE: Guaranteed Universal Life Insurance for Seniors: A Good Choice?
Are There Alternatives to Final Expense Life Insurance?
- Buy a permanent life insurance policy such as guaranteed UL, indexed UL, or variable UL when you’re young and healthy
- Save enough cash so that your final expenses will be covered
- Pre-need insurance
If you’re young and healthy, you can lock in your insurance premiums for the next ten, twenty, or thirty years to have lifelong coverage. You should get a permanent life insurance, or get a term life policy that ca be converted to a permanent policy if it looks likely that you will outlive your insurance.
If you can save $10,000 or so on your own, your funeral expenses will be covered and your heirs will not have to wait for a payout, simplifying the process.
Preneed Insurance for Final Expense
Sometimes known as a prepaid funeral. This is different than final expense insurance, in that you pay money to a funeral home. You can either use a payment plan or pay upfront. You can also provide a plan for your funeral service.
It is similar to buying a final expense life insurance for exact coverage amount that you have to pay the funeral home and have the funeral home as the beneficiary on your life insurance policy.
Some expenses may not be covered, so if you go this route, be sure and read the contract carefully.