Centennial Insurance
Final expense insurance for end-of-life costs
Final expense insurance is usually a small permanent life insurance policy intended to help beneficiaries pay funeral, burial, medical or other end-of-life expenses.
What is final expense insurance?
Final expense insurance is usually a small permanent life insurance policy intended to help beneficiaries pay funeral, burial, medical or other end-of-life expenses. Many products use simplified underwriting rather than a full medical exam. Coverage amounts are typically lower than traditional income-replacement life insurance.
Is final expense insurance the same as burial insurance?
The terms "final expense insurance" and "burial insurance" are often used for similar small whole-life-style policies. The death benefit is generally paid to the beneficiary, not directly to a funeral home, unless a separate assignment or pre-need arrangement applies. Beneficiaries usually decide how to use the proceeds.
How does simplified underwriting work?
Simplified-issue applications typically ask health questions and may use prescription or insurance databases rather than a traditional paramedical exam. Approval is not guaranteed. Carriers differ in age limits, health questions, prescription rules and which medical conditions can qualify for immediate or graded benefits.
What is a level death benefit?
A level-benefit policy generally provides the full stated death benefit for covered death once the policy is in force, subject to policy exclusions and contestability provisions. Eligibility usually requires the applicant to satisfy the carrier's health requirements.
What is a graded death benefit?
A graded-benefit policy can limit the amount payable for non-accidental death during an initial period, often returning premiums plus interest or paying a percentage of the face amount before the full benefit becomes available. Exact rules differ by contract. Read the benefit schedule before applying.
How much final expense coverage should you buy?
Start with the expected financial need rather than a generic amount. Consider funeral and burial preferences, outstanding medical bills, small debts, travel or family expenses, and any existing savings or life insurance. Final expense coverage is not always the most efficient way to cover a large income-replacement need.
Who may consider final expense insurance?
Final expense coverage may fit older adults or consumers who want a modest permanent death benefit, prefer simplified underwriting, or cannot qualify for some fully underwritten products. It may also be considered when a family specifically wants funds available for funeral and other final costs.
What are the drawbacks?
Premium per dollar of death benefit can be higher than larger fully underwritten policies. Some applicants only qualify for graded benefits or waiting periods. Guaranteed-issue products may be especially expensive for the amount of coverage. Compare underwriting class, immediate benefit eligibility and alternatives before deciding.
Final expense vs. term life: which is better?
Term life can provide a larger death benefit at a lower initial premium when the need is temporary and the applicant can qualify. Final expense is usually permanent and designed for smaller end-of-life needs. The better fit depends on age, health, budget, coverage amount and whether the need is temporary or lifelong.
See how term life works, or start a Coverage Check to see what may be worth a closer look. See our full life insurance guide.
Reviewed by James Woodley, licensed insurance advisor · Last reviewed