Essential Things You Should Know About Final Expense Insurance

Final Expense Insurance

Statistics show that the average cost of funerals in the United States today is close to $7,400, excluding graveyard, obituaries, and flower expenses. As such, more and more Americans struggle to provide a decent funeral and burial for their departed loved ones.

While federal and local government burial assistance programs are available, these types of assistance tend to favor certain classes, such as veterans and victims of disasters. Even Social Security limits its settlement to $255 for the family members of the deceased. 

Death is certain, and nobody knows when it will happen. If you do not want to burden your family when you pass away, it is best to secure a Final Expenses Insurance. This type of policy offers a death benefit that can cover funeral and burial expenses. To help you understand what this plan is about, consider the discussion points below:

Final Expenses Insurance vs. Prepaid Funeral Insurance

While both final expense policies and prepaid funeral plans can be used to pay for funeral and burial costs, the two plans differ in the following ways:

  • Final expense plans allow the policyholder to choose a beneficiary.

When you opt for a final expense plan, you can appoint a trusted person responsible for ensuring that the insurance benefit will be used according to your instructions. For prepaid funeral insurance, however, the beneficiary is always the funeral home.

  • The death benefit from final expense policies can be used for other purposes.

While the death benefit for a final expense plan is generally designed to cover funeral and burial expenses, the beneficiaries are free to use it for other expenses like outstanding medical bills, legal fees, or even vacation.  Says Robert Schmidt of Burial Insurance Pro “The death benefit of a final expenses insurance policy is paid to the named beneficiary in a tax free and lump sum payment.  The beneficiary can use the death benefit however they see fit.  There are NO restrictions on what the money can be used for.”  A prepaid funeral policy is solely for funeral and burial costs.

  • The value of final expenses Insurance plans can grow over time.

Unlike a prepaid funeral policy wherein the amount of benefit remains the same throughout, the value of a final expense plan can increase after some time. The latter works similarly as that of a savings account since the balance increases as you continue to pay your insurance premiums.

  • Final expense policies offer a line of credit during emergencies.

One of the most beneficial features of a final expense policy that is not offered by prepaid funeral plans is that you can borrow a portion of its dividend value over time. Essentially, you have ready access to funds during emergencies without having to go through the tedious process of banks and other lending institutions. Besides having easy access to available funds, you also get to enjoy a much lower interest rate and flexible payment terms when taking a loan against your policy.

Advantages of Final Expense Insurance

While different insurance plans cover funeral and burial related expenses, it is best to opt for a final expense plan and consider the following benefits:

  • Accessibility

Unlike other types of life insurance that are only available to the young and healthy, final expense policy assists people who need this most – retirees with some health issues. Anybody can avail of this policy without having to go through medical tests. You merely need to answer a questionnaire or provide information on your prescription history at the most.

  • Affordability

The premiums of final expense policies are more affordable compared to ordinary life insurance. The payout may not be as high for large expenditures or long-term expenses, but the plan offers enough so that your loved ones have enough to pay for your funeral expenses and other bills as they adjust to your absence.

  • Convenience

Applying for a final expense policy is easy. You do not have to undergo numerous processes or background checks and submit infinite documents to qualify. As such, the application process can be completed in a few minutes, and you can readily receive the approval after several hours at the most. 

  • Peace of Mind

Perhaps one of the most crucial benefits of securing a final expense policy is the gift of peace of mind. Think about how difficult and emotionally draining it is for your family to accept your death while at the same time searching for funds to pay for funeral expenses and immediate bills. With a final expense plan, you can be assured that your loved ones will not, at the very least, be financially burdened by your passing. 

Providing a proper memorial service to a departed loved one used to be a given, but is now a luxury that many cannot afford. Protect your family and not let them suffer when you are gone by getting a Final Expense Insurance today. As discussed above, this type of policy can ease the financial burden of your passing so that they can mourn and move on without additional stress and anxiety.



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