Final Expense Insurance, Explained Simply

What it is

Final expense insurance is life insurance, usually with a smaller coverage amount than traditional policies, intended to help your family pay for a funeral, burial or cremation, and other bills left behind.

How it typically works

• You choose a coverage amount and name one or more beneficiaries.
• You pay a premium, often monthly.
• When you pass away, the insurer pays the death benefit to your beneficiary, subject to the policy terms.
• Your beneficiary generally decides how to use the money.

Types of underwriting you may hear about

Simplified issue: no traditional medical exam, but you answer health questions. Graded or modified benefit: may limit the full natural-death benefit during an initial period. Guaranteed issue: offered by some insurers without health questions, often with a graded benefit period. Availability and terms vary by insurer and state.

Questions to ask before you buy

• Is the premium level for life, or can it increase?
• Is there a waiting period or graded benefit?
• Does the death benefit ever decrease?
• When does coverage begin?

Have more questions? Visit our FAQ or the funeral cost guide.