Final expense insurance: what it covers and who it’s for

Final expense insurance is a small whole life policy meant to pay for a funeral, burial or cremation, and the bills that come at the end of life, so your family doesn’t have to cover them out of pocket.

How it works

• It’s permanent coverage: it doesn’t expire as long as premiums are paid.
• Premiums are usually level, meaning they don’t go up as you get older.
• Face amounts are smaller than traditional life insurance, often a few thousand dollars up to about $50,000.
• Many policies use a short health questionnaire instead of a medical exam.

Who it tends to fit

People in their 50s through their 80s who want their final costs handled, who don’t need a large income-replacement policy anymore, or who were told no for other coverage because of their health.

What to check before you buy

• Whether the benefit is immediate or graded. Some policies for people with certain health conditions pay the full amount only after a waiting period, often two years, and refund premiums (sometimes with interest) if death from natural causes happens sooner.
• Whether the premium is truly level for life.
• Who the beneficiary is, and that they know the policy exists.

Funerals with burial commonly run $8,000 to $15,000 once cemetery costs are included, so it’s worth knowing your local numbers before choosing an amount.