Final expense insurance is a type of whole life insurance policy which is intended to offset funeral and burial costs. These policies will pay your beneficiary a smaller death benefit to help with end-of-life expenses in exchange for a low monthly premium. Let’s take a look at some of the pros and cons of this kind of insurance policy.
Pros of Final Expense
- A more affordable option to help your loved ones with end-of-life expenses.
Funeral and burial costs (not to mention any remaining medical bills) can be a huge burden on loved ones left behind. Final expense can relieve some financial stress by offsetting these costs.
- Coverage is guaranteed throughout the policyholder’s lifetime.
As long as premiums are paid, your policy will be active and your benefit will be paid.
- No medical exam is required, making coverage more accessible.
Those who have trouble qualifying for other kinds of insurance due to chronic conditions are able to get insurance thanks to final expense.
- Lower premiums than other whole life policies.
Most whole life insurance policies will have a bigger death benefit so the premiums will be more expensive. Final expense is a smaller policy overall and more budget-friendly.
Potential Cons of Final Expense
- Smaller death benefit.
The biggest downside to this kind of policy is that the benefit is considerably smaller than other whole life plans. Capping at around $50,000, there may still be medical or burial expenses remaining after the benefit is paid. Your loved ones could still have to pay for some end-of-life costs with this policy.
- Premiums must be paid.
As with any other policy, if there is a lapse in your payments, your beneficiary will not be able to access your death benefit. These are the terms of every final expense policy.
This list is a summary of key points but is not exhaustive. There are many other factors to consider when determining which life insurance policy is right for you. If you have more questions about final expense and whether it is right for you, contact us today.
