Final expense insurance is a small permanent life policy, typically $5,000 to $25,000, that pays your beneficiary cash for a funeral and related bills. The National Funeral Directors Association reported a 2023 median of $8,300 for a funeral with viewing and burial, before cemetery costs. The policy is sized to cover that gap.
What a funeral costs
The National Funeral Directors Association surveys funeral home price lists. Its 2023 medians were:
- $8,300 for a funeral with viewing and burial
- $6,280 for a funeral with viewing and cremation
Those figures cover the funeral home's own charges. They do not include cemetery interment, a headstone or monument, or third-party cash advance charges, so the full bill is higher. Costs also vary by region and by funeral home.
How the payout works
You name a beneficiary when you apply. When you pass away, the insurer pays the beneficiary directly, and the beneficiary decides how to use it. A beneficiary typically pays the funeral home first, then uses what is left for medical bills, credit cards, or other final expenses.
Because the policy is permanent, the coverage does not expire as long as the premiums are paid. That is the difference from a term policy, which ends after a set number of years.
Simplified issue and guaranteed issue
Final expense policies use one of two kinds of underwriting.
- Simplified issue asks a short list of health questions, often with no medical exam. If you are approved, the full benefit commonly applies from the start.
- Guaranteed issue asks no health questions and accepts applicants within the carrier's age range. It usually costs more, and many policies pay a reduced benefit or return the premiums paid if death occurs in the first two years.
A decline from a traditional life policy does not always mean a decline here. Final expense underwriting is built for older applicants and common conditions such as diabetes or high blood pressure, and the right type depends on your answers.
How to size the policy
Start with the funeral home median for the service you want, then add the items the median leaves out. A working list:
- Funeral home services and merchandise for burial or cremation
- Cemetery plot or niche, opening and closing, and a headstone or marker
- Any medical bills or debts you do not want your family to carry
- A cushion for travel, flowers, and the costs nobody planned for
Policies sold for this purpose commonly range from $5,000 to $25,000, so the total on your list usually lands inside that range.
How Luis helps with final expense
Luis Alvarenga reviews your health questionnaire before you apply, so you know your realistic options in advance. Every client receives a free annual policy review for as long as the policy is active. He is licensed in 18 states, and products and rates vary by carrier and state. See the Final Expense page for details.
Frequently asked questions
Is final expense insurance the same as burial insurance?
Yes. Burial insurance is another name for a small permanent life policy meant to cover funeral and final costs.
Do I need a medical exam for final expense insurance?
Often no. Simplified issue asks a few health questions and guaranteed issue asks none, but the exact rules depend on the carrier.
Can my beneficiary spend the payout on things other than the funeral?
Yes. The insurer pays the beneficiary directly, and the beneficiary can use it for the funeral, medical bills, or other final expenses.
What happens if I die in the first two years?
It depends on the policy. Many guaranteed issue policies pay a reduced benefit or return premiums during an initial period, while simplified issue policies commonly pay the full benefit if you were approved.