Final-Expense Planning

Who it may be appropriate for

Final-expense insurance is most commonly considered by older adults who want to ensure their end-of-life costs are covered without placing a financial burden on their family. It may also be appropriate for people who do not qualify for larger traditional policies due to age or health, or who have limited savings set aside for these costs.

What financial need it addresses

Funeral and burial costs can range from several thousand to over ten thousand dollars, depending on the arrangements. Final-expense insurance provides a death benefit that can be used by the beneficiary to cover these costs, as well as any remaining medical bills, small debts, or other end-of-life expenses.

Potential advantages

• Simplified underwriting—many policies do not require a medical exam
• Smaller coverage amounts make premiums more manageable
• Permanent coverage that does not expire
• Provides a defined benefit to help cover specific costs

Important limitations and tradeoffs

• Coverage amounts are typically smaller than traditional life insurance policies
• Premiums per dollar of coverage are generally higher than term insurance
• Graded benefit policies may not pay the full death benefit if death occurs within the first two years
• Not designed to replace income or cover large financial obligations

Questions to consider

• Do I have savings or other assets set aside to cover end-of-life costs?
• Would my family be able to cover funeral and burial costs without financial strain?
• Do I have other life insurance coverage in place?
• Am I looking for a simple, permanent policy with a defined benefit?