What Is Final Expense Life Insurance 

What Is Final Expense Life Insurance

There are numerous different types of insurance policies out there for covering expenses at the end of the policy holder's life. If you're looking for the right type of life insurance for your needs, one type of insurance you should seriously consider and spend some time to understand is final expense life insurance.

Simply speaking, final expense insurance will just cover the costs of your funeral expenses when you pass away and will not include any additional benefits. While life insurance generally provides a death benefit to beneficiaries to support them after the policy holder's death, final expense insurance just covers the costs of the policy holder's funeral and burial.

Understanding the Basics of Final Expense Insurance

This type of life insurance is available to cover final expenses, in spite of funeral and burial expenses that can add up to a great deal for many people. On average, a traditional funeral can reach costs of $10,000.

Policy holders with final expense insurance don't want their loved ones to have to foot the bill for their final expenses. Final expense insurance is generally much more affordable and widely available than traditional life insurance, because although funeral and burial expenses can add up quickly, they typically don't nearly reach the amount of a typical death benefit payout for a life insurance policy.

The loved ones of those with a final expense insurance policy will file a claim after the policy holder passes away and get a lump sum payment. If you are the beneficiary on the life insurance policy, you will receive this sum will be responsible for arranging and paying for the funeral and burial of the policy holder.

What Is Final Expense Life Insurance

Determining If You Need Final Expense Life Insurance

It's generally a fairly simple matter to determine if final expense life insurance is appropriate for your financial situation and the financial situations of your surviving loved ones. If your children are already grown and financially independent, final expense insurance is probably appropriate for you. Of course, your spouse should also be considered in the decision. If your spouse is still alive but will not rely on funds from you if you should pass away, you may want to opt for final expense insurance.

In addition to determining how much surviving family members will be relying on you financially, you should also put some thought into what assets you'll leave to surviving family members after you pass away. If you have a great deal of assets and a large inheritance to leave to dependent surviving loved ones, a death benefit might not really be necessary for you and a final expense policy might be adequate.

If you cannot afford life insurance premiums, this may be another indication that you should opt for final expense insurance rather than a traditional life insurance policy. Premiums are inevitably lower for those who choose final expense insurance because the payout when the policy holder dies is for a smaller sum of money. Other individuals might opt for final expense insurance because they cannot be approved for life insurance with pre existing medical conditions.

Finding the Right Policy For Your Situation

It's important to shop around to explore your options when you're purchasing final expense life insurance. The policy you choose and the amount your policy offers as a payout should depend in part on what you envision in terms of funeral plans.

If you would like to set out plans for a fairly large traditional funeral in your will, you will need a higher value policy to cover those expenses. You could possibly shop for an appropriate final expense insurance policy at the time that you plan your will, so you can choose the best option that will make things easier and more affordable for your surviving loved ones after you have passed away.

Final expense insurance is an important product to understand for anyone who wants to plan to minimize the stress on loved ones after they pass away. You can discuss your options with a professional by finding a life insurance agent to determine if this is the best type of insurance for you. You should also discuss the issue with your loved ones or your power of attorney so that these individuals are aware of any policy you take out to cover your final expenses.

Disclaimer: TermLifeInsuranceUSA.com is not a licensed insurance agency or broker. The content of this website is for informational and comparative purposes only and is not intended to take the place of professional advice from a licensed insurance agent. TermLifeInsuranceUSA.com recommends that all consumers consult with a licensed insurance agent before purchasing any insurance policy.

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