By Don Cook, Equity First Financial Corp.
With so many life insurance options, it’s important to understand the kinds of policies that can be beneficial to seniors. Final expense insurance is a type of whole life insurance policy designed with seniors in mind. With death benefits typically ranging from $2,000 to $35,000, these policies are specifically marketed to help cover funeral costs and other end-of-life expenses.
Unlike traditional life insurance, final expense policies feature smaller death benefits, making premiums more affordable for those on fixed incomes. The application process is also simplified—while you’ll need to answer some health questions, no medical exam is required. Once approved, your premiums remain fixed, and your coverage can’t be canceled due to health changes.
There are three main types of final expense insurance:
- Standard policies with immediate coverage
- Graded benefit policies, which pay partial benefits if you die within the first two years
- Guaranteed issue policies, which have a 2-3 year waiting period but approve virtually everyone
While marketed primarily for funeral expenses, beneficiaries can use the death benefit for any purpose—from paying medical bills to settling debts or even taking a vacation.
Final expense insurance may be worth considering if you:
- Don’t have sufficient savings to cover funeral costs
- Lack other life insurance coverage
- Want to prevent financial burdens on your loved ones
- Need immediate access to funds (as estate settlements can take months)
However, these policies aren’t for everyone. The cost per $1,000 of coverage is higher than traditional life insurance. If you’re healthy enough to qualify for standard life insurance, you might get better value with a traditional policy, though these typically require minimum death benefits of $50,000-$100,000.
For example, a 65-year-old woman seeking $10,000 coverage might pay about $41 monthly for a standard final expense policy or $51 for guaranteed acceptance. Men typically pay higher rates due to shorter life expectancy. A personalized life insurance quote will provide an exact price based on age and coverage amount desired.
Before purchasing, it is important to compare quotes from multiple insurers, as rates can vary significantly. Remember that Social Security provides only a $255 death benefit, which falls far short of covering most funeral expenses, making some form of financial planning for end-of-life costs essential.
Don Cook is a New Jersey licensed insurance agent with Equity First Financial Corp. For more information about final expense insurance and to receive our free pre-arrangement guide, please visit www.equityfirstfc.com or call 848-333-5115
The above is a paid advertisement from Equity First Financial Corp for Jersey Senior Weekly.
