Final Expense Life Insurance – Selecting the Right Policy For Your Needs

Last Updated: April 9, 2019

Are you shopping for an affordable burial or final expense life insurance policy?

Although thinking about death and the expenses associated with it are not a favorite subject amongst families, there does come a point where planning for the inevitable becomes necessary.

Don’t worry, purchasing life insurance does not need to be a painstakingly difficult process. If you are under the age of 85, we’ll be able to help you find the best life insurance policy available for your needs.

We work with dozens of life insurance companies that offer affordable final expense policies, even to people who have preexisting health issues.

Quick Article Guide:

1. Why Should I Buy Final Expense and Burial Coverage?
2. Purchasing Enough Life Insurance to Cover your Final Expenses
3. Do You Need More than $25,000 of Coverage? Term vs Permanent Life Insurance
4. Buying $25,000 of Life Insurance Coverage or Less
5. Always Read The Fine Print!
6. Call Us Today, We Can Help

Why Should I Buy Final Expense and Burial Coverage?

If you have money set aside for your final expenses and have paid off most of your outstanding debts, you may not need to purchase burial coverage or final expense life insurance. However, many people don’t realize how expensive a funeral can be, and these costs continue to increase every year.

Supplementing your savings with an affordable $5,000-$25,000 final expense policy will be appreciated by your loved ones. As the saying goes, “You can never leave too much behind.”

To put things into perspective, $5,000 will usually only cover the cost of cremation and an urn. If your loved ones would like to have a funeral and bury you, the cost will be significantly higher.

As of 2016, a very basic funeral runs between $7,000 and $10,000. Realistically, a funeral service will normally cost somewhere between $12,000-$15,000 when everything is said and done. Aside from the cost of a funeral director’s services, there’s also the cost of a casket, embalming, transportation, and preparation of the body, etc.

These figures do not include the cost of a burial site, tombstone, memorial cards, or flowers. Coming up with this amount of cash immediately following the death of a loved one can be quite a burden, especially if there are other outstanding debts. Oftentimes people also leave behind substantial medical bills that your loved ones will often “inherit”.

Purchasing Enough Life Insurance to Cover your Final Expenses

final expense insuranceMany people that contact us are unaware that their surviving family will not only bear the burden of their final expenses and funeral costs, but will also be ultimately responsible for any outstanding medical bills, credit card debt, mortgages, or car loans.

It’s important to purchase a life insurance policy that will cover all of your outstanding debts to ensure that your family members are not burdened with these extra expenses after you pass away. It’s also important to note that “final expense” life insurance is not designed to make your family members wealthy, it’s just enough to cover your outstanding debts and burial costs.

Final expense life insurance policies will allow your family members and loved ones to celebrate your life rather than struggling to pay off the outstanding debts you might leave behind. A little pre-planning on your end can make a world of difference to your surviving family without breaking your budget.

To make things easy, we’ve included a short explanation of the most popular types of life insurance with their maximum death benefit amounts. That being said, everyone’s situation and needs are different. If you have questions, we encourage you to give us a call us toll free at: 855-902-6494. One of our experienced agents will be able to provide you with free quotes and policy comparisons within just a few minutes.

Do You Need More than $25,000 of Coverage? Term vs Permanent Life Insurance


Due to their affordability, term life and guaranteed universal life insurance are the most popular life insurance options for $25,000 of coverage or more. Both products guarantee coverage and rates for a fixed amount of time, and neither policy requires additional costs or payments to build an “investment” value.

When purchasing life insurance, it’s very important to consider how long we need protection since none of us have a known expiration date. Below we’ve explained term life insurance and a popular form of lifetime coverage to help you with your decision.

Term Life Insurance

Term life insurance policies are available for people who need a death benefit of $25,000 or more. These policies offer fixed rates and coverage for a specific number of years. Term life insurance is typically sold in five year increments and the most common terms are 10, 15, 20, 25, and 30 years.

The longer your term is, the more your policy will cost. During the term of your policy, your coverage is guaranteed and the life insurance company cannot decrease your coverage or increase your rates, regardless of any changes to your health. It’s also important to note that term insurance is not designed to provide lifetime coverage and as we get older, options for a longer term become limited. As an example, most companies stop offering a 30-year term after the age of 55.

Term insurance policies rarely extend coverage after the age of 85 which allows the cost of these policies to be affordable. Simply put, most people often outlive their term policy. Term policies are really designed to be a safety net during your working years, providing financial relief for your family if you were to die prematurely.  The most common purchasers of term life insurance policies are the family’s “breadwinners” who have mortgages, young children, and other outstanding debts.

If you will still need coverage after the term of your policy has ended, some companies will still offer you an opportunity to continue your coverage. This is also known as a term conversion. This “conversion” option allows you to exchange a portion of your term policy for permanent lifetime coverage without having to medically qualify or complete a new medical exam.

The insurance company will base the cost of your insurance policy on the risk class you originally qualified for, regardless of your current health. To learn more about converting your term insurance to permanent coverage, please see our article, “Converting Term Life Into Permanent Coverage,” or call us at: 855-902-6494.

If you don’t already have a term policy to convert, and you need final expense life insurance, Guaranteed Universal Life Insurance is probably your best option for an affordable lifetime policy.

Guaranteed Universal Life

Guaranteed universal life insurance should not be confused with traditional universal life insurance. Traditional universal life insurance is relatively expensive because it requires additional money to build an investment value.

In addition, the cost of traditional universal life insurance is not guaranteed, and most companies will raise your COI, or cost of insurance, as you get older, quickly diminishing your cash value. Guaranteed universal life insurance works just like a term policy with rates that are GUARANTEED not to increase through the life of your policy.

The major difference between guaranteed universal life and term life insurance is that guaranteed universal life insurance offers set rates and coverage until a set age rather than a fixed number of years. In fact, with guaranteed universal life insurance, you can lock in your rates until age, 85, 90, 95, 100, 105, 110, or even 121!

selecting the best final expense life insuranceGuaranteed universal life insurance policies are generally much lower in cost compared to the whole life insurance policies advertised on TV. This is primarily due to the fact that these policies are not endorsed by celebrities who charge a hefty fee for the use of their name. In addition, with guaranteed universal life insurance, you pay for the cost of your life insurance coverage only. With whole life insurance, additional money is required to build a cash value.

Our agents and most financial advisers will always recommend keeping your life insurance and investments separate. Keeping your investments and life insurance separate will prevent you from paying inflated “management” fees, and prevent you from losing your coverage later in life if your investments do not perform as well as planned. Most investment policies  end up lapsing because the rising rates eventually become unaffordable.

Like term life insurance, most guaranteed universal life insurance policies are medically underwritten and they usually require a free in-home exam for approval. However, depending on your age, health, and state of residence, we may be able to offer a guaranteed universal life insurance policy that does not require a medical exam for approval.

Whether or not you take an exam, the insurance company you apply with will also review your medical records to verify your health history, medications, driving records, criminal background, and any other pending life insurance applications.

Most guaranteed universal life insurance policies offer as little as $25,000 of coverage for final expenses, or as much as $50,000,000 for estate planning purposes. If you need less than $25,000 of coverage, you’ll need to purchase whole life insurance.

If you are a cigarette smoker or if you have some serious health issues, you’ll probably want to apply for a policy with a smaller death benefit that doesn’t require a health exam or many detailed health questions. These policies usually offer up to $25,000 of coverage, but because they accept everyone regardless of their health, they have a two-year waiting period before offering full coverage.

Buying $25,000 of Life Insurance Coverage or Less

If you need less than $25,000 of coverage, there are a few types of policies that you may be able to qualify for. We’ve explained the most common types of coverage available below:

Whole Life Insurance

Whole life insurance policies usually offer $5,000 to $50,000 in coverage and most companies will approve applicants who are in average or better health for their age. Unfortunately, some policies do not offer level premiums for your whole life and some policies expire at age 80. While many carriers offer level rates and coverage until age 100 or later, it’s important to understand exactly what you’re buying.

We always recommend receiving the rate schedule within your policy to make sure your rates are “fixed.” Many companies initially offer a teaser rate to lure you in, only to increase your rates every five years as you get older. Unfortunately, these policies become unaffordable for most people by the age of 70 or 75, and they are forced to let their policies lapse.

Most whole life policies do not require a medical exam for approval and they tend to ask only few health questions. This type of coverage may be ideal making for some applicants who use tobacco, have a hazardous occupation/hobby, or an unfavorable driving record.

Please note: Most of these policies are lenient on hobbies, occupations, and cigarettes; however, they do consider your current and past health history by electronically scanning your medical records. Your agent can help you determine if you’re a candidate for a whole life insurance policy by asking you a few questions about your health and lifestyle.

If you cannot qualify for whole life insurance, you’ll want to consider a guaranteed issue life insurance policy, which we’ve explained in the next section:

Guaranteed Issue Life Insuranceguaranteed-approval-life-insurance-final-expenses

Guaranteed issue life insurance, or “Guaranteed Approval” final expense life insurance policies, offer a death benefit of up to $25,000 without health questions or an exam. These policies are usually the only type of policies that offer full-coverage to people with a terminal illness, compounding health issues, or anyone who is over the age of 80.

All guaranteed issue applications are approved automatically after a payment has been made unless the applicant is confined to a nursing home, assisted living facility, or sanitarium. If you or your relative are in one of these situations, unfortunately, life insurance is probably not available. Instead of purchasing coverage, you’ll need to “self-insure” by putting the money that you would have spent on your life insurance in a savings account each month.

Please note: Guaranteed issue/approval life policies usually provide accidental death coverage immediately, but they will only pay out the full death benefit if the insured passes away from a medical issue after a two year waiting period.

If the policyholder dies within the first two years due to a health issue, the beneficiary will receive all of the premiums paid into the policy and 10% interest. The only way you can lose money on this type of coverage is if cancel your policy before you pass away. When purchasing any type of life insurance policy, we always recommend purchasing one that fits into your budget.

Always Read The Fine Print!

final-expense-life-insuranceWhen purchasing any type of life insurance, it’s very important to understand what you’re buying. An independent agent can help you sort through any fine print to make sure you understand your policy and identify any “loopholes” you might not be aware of.

We’ve all heard the saying, “If it sounds too good to be true, it probably is.” This is especially the case with many final expense and burial life insurance policies. We always advise our potential clients to be especially wary of TV commercials or postcards that offer life insurance by “only answering three questions,” or companies that offer life insurance for only a $1.

Before purchasing a final expense or burial policy, make sure you ask your agent these three important questions:

1. Will my policy ever expire?

Many life insurance policies expire at the age of 80, leaving the insured without final expense insurance when they need it the most. Among these policies is a popular policy from New York Life / AARP that does not require a medical exam for approval.

According to the United States Social Security website, the average lifetime expectancy for an American male is 84.3 years old, and 86.6 for an American female. Considering the medical advancements of this day and age, lifespans are increasing, which means you’re taking a big risk by purchasing a life insurance policy that expires at age 80. We typically recommend final expense policies that offer guaranteed rates and coverage until age 90 or later, depending on your family longevity.

2. What exclusions will prevent this policy from paying out?

When applying for any type of life insurance, be very cautious of qualifying health questions that are worded vaguely. There may be a pre-existing condition exclusion or other loopholes that can prevent an insurance company from paying your claim.

When possible, always work with an agent, and buy a life insurance policy that requires a medical exam for approval. They have the fewest exclusions and pay out for any type of death, except suicide, during the first two years of your policy. In addition, an independent agent can compare your options and tell you which policies to avoid.

3. Are my premiums fixed or will my policy get more expensive as I get older? 

Many policies sold on TV commercials and through the mail increase in cost every five years as you get older. These increasing premiums often double in cost every five years making your policy unaffordable.

If you will be living on a fixed-income when you retire, its important to select a life insurance policy that offers level premiums. If you’re forced to let your policy lapse due to affordability, it may be impossible to qualify for a new and affordable policy that offers immediate coverage, and this is usually when you need life insurance the most.

Call Us Today, We Can Help!

tla can helpIf you’re not sure of which type of coverage is best fit for your situation, give us a call today at: 855-902-6494. Our agency works with over 60 top-rated life insurance companies, and we’re able to match our clients with the best life insurance options available.

Our agents have multiple years of experience and we have access to each company’s underwriting guidelines. After asking you a few general questions about your health, we’ll be able to shop the market, matching you to the company and policy that is the best for your needs and budget. You can also request a free instant online quote below to compare rates and options from dozens of companies in less than a minute.

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One Response to “Final Expense Life Insurance – Selecting the Right Policy For Your Needs”

  1. Randy Chorvack

    I’m glad that you mentioned that life insurance is only to pay off any debts you left behind, and not to make your family rich. My grandma has a lot of medical bills because of all of the treatments needed to help with her medical condition, so she also needs a life insurance policy that’s going to cover all that. As much as we love grandma, we don’t want to be stuck trying to pay off her bills.


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