May 04

Why final expense insurance is more cost effective for seniors

When you’re younger, and have a spouse and children to support, life insurance makes a lot of sense. Life insurance is designed to help support your family in the event of your unexpected death. These types of insurances enable your family to survive financially while they adjust. If you’re older, however, you might not have these concerns. There is still one expense that you have to worry about though, your funeral. For seniors, final expense insurance is much more cost effective.


What is Final Expense Insurance?

Final expense insurance is a type of insurance that is designed to help cover end of life expenses, including medical care, funeral costs, and burial or cremation costs. It is similar to a permanent life insurance and has a lot in common with guaranteed issue life insurance. Where life insurance policies are taken out in your younger years, however, final expense insurance is designed to be taken out when you are older.


No Medical Exams Needed

Traditional life insurance requires a paramedical exam. This provides the insurer with an idea of your health. When you are young and in good health, your premiums are lower. Seniors, however, are at a disadvantage for life insurance due to having more medical issues than younger adults. If you are older, this can make it harder for you to then pass the exam and get the insurance you need. Additionally, because final expense insurance doesn’t require a medical exam, you don’t have that same waiting period of up to a few months for the policy to take effect.



The premiums for final expense insurance tend to be more on the affordable side, making it a good option if you are on a tight budget. It is important to keep in mind though that this type of insurance typically has lower payouts than more traditional types of policies. Payouts for final expense insurance range from $5,000 to $25,000. Depending upon your wishes for your funeral, this may be enough to cover the costs.


Good Option if there is No Savings

Some people save over the years. Those who have been planning and saving may already have the money they need set aside. Deciding to self-fund your burial expenses is not something you can decide to do once you’re older. Final expense insurance is specifically targeted for older adults who do not have the money set aside to afford their own funeral.


You Can Use the Money for Other Expenses

Pre-need insurance and pre-need funeral trusts are very specific types of insurance. Pre-need insurance is offered by funeral homes. It is meant to cover the costs of predetermined services. While they can help you to get funeral plans out of the way, alleviating the stress placed on your family, planning too early can have its drawbacks. For instance, if the funeral home changes hands before you pass, you lose that premium money. A pre-need funeral trust is similar, except that you can contribute money over time and that money accrues interest. These trusts can be difficult to modify if you need to make changes and are irrevocable.

Final expense insurance is designed to cover funeral costs. If there is additional money left over after the costs of your funeral, your family is then able to use the remainder of the money for other purposes. For instance, if you leave outstanding debts, the rest of the policy money can be used to help pay for them.

Funerals are expensive. Leaving your loved ones with these costs can be a significant financial burden. With final expense insurance, you can help to alleviate the costs of your funeral, giving your family peace of mind while they are dealing with the grief of your loss.


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