It can be challenging to discuss end-of-life plans with your loved ones. But without these difficult conversations, your loved ones could face significant expenses, including funeral and burial expenses.
Final expense life insurance, commonly referred to as burial insurance, is a form of insurance that provides coverage for various end-of-life expenses. Policies can vary by final expense insurance companies, but may include costs like medical care, burial and funeral prices, and other end-of-life expenses.
What is final expense insurance, what does it cover, and what impacts the cost? If you’re asking yourself these questions, you’re not alone. Millions of older Americans are curious about this type of coverage policy.
Final expense life insurance is a type of insurance policy that helps cover costs related to end-of-life arrangements. It may sound surprising, but the average funeral in America costs between $6,000 and $12,000, making funeral expense insurance a must-have for many seniors.
While coverage varies by policy, these policies commonly provide more than insurance for funeral costs. Final expense insurance for seniors may also include coverage related to:
- Medical bills
- Funeral and burial arrangements
- Celebratory events
- Outstanding bills
The amount of money your family may receive after you pass depends on several factors, including the following:
- The age at which you enrolled in final expense insurance
- Your health when you enrolled
- The insurance company
- How much you’ve paid in premiums
To maintain final expense insurance, you must pay monthly premiums. Generally, the older you are before investing in final expense insurance, the higher your premiums will be. That’s because the older you get, the more of a risk you may be at for illnesses and medical conditions.
For example, a young, healthy adult may pay just $20 a month for an insurance policy. A senior with medical conditions and the same policy may pay more than $100 in premiums each month. This is another reason why you should shop around for final expense insurance quotes before enrollment. You may find a deal or greater coverage options elsewhere.
Funeral expense insurance is not life insurance. While both of these types of policies are end-of-life insurance, they have certain differences. Final expense insurance is meant to provide minimal coverage to help your loved ones cover the cost of your funeral arrangements, whatever those may be.
On the other hand, life insurance provides more comprehensive coverage and a larger beneficiary amount. Learn more about the differences between these types of insurance policies in the next slides.