Final expense insurance is meant to provide funds so your beneficiaries can pay for a funeral. Even a simple burial can run into thousands of dollars. Final expense insurance policies are typically whole life insurance policies with small payouts, such as $10,000. These policies are usually sold as "guaranteed acceptance," meaning you can't be turned down and you don't have to take a life insurance medical exam.
Final expense insurance is sometimes referred to as funeral or burial insurance.
Available policy amounts will vary by company. For example, State Farm's final expense insurance maxes out at $10,000. MassMutual goes up to $25,000.
Keep in mind that even though you intend for the life insurance money to pay for final expenses, your beneficiary could do whatever they want with the money.
Final expense insurance rates
Final expense insurance quotes will vary based on your age, the policy amount and the company.
Here's a look at rates for a $5,000 no-exam whole life policy if purchased at different ages.
|Gender and age||Annual rates for a $5,000 whole life policy|
|EverQuote research. We average the three cheapest rates found for whole life insurance. Rates are for men and women of average height and weight, in very good health. Rates shown are for policies that don't require a medical exam. Your own rates will be different.|
Other ways to pay for a funeral
Through a trust. There are a couple ways to pay the cost of a funeral with a trust. With a funeral trust, you provide funds for a funeral and the funeral service provider is the trustee. The trustee will eventually withdraw the funds to pay for the funeral.
Or, use an irrevocable or revocable trust. Your trustee will access the funds after your death to pay for a funeral. Note that money in a revocable trust is counted toward your assets for Medicaid eligibility.
Here are tips on planning your own funeral from the Federal Trade Commission.
Pre-need insurance. Another way to pay for a funeral with insurance is pre-need insurance. This type of policy is typically purchased through the funeral home of your choice. You select all your own burial arrangements, lock in the price and buy a pre-need insurance policy to cover it. The money goes directly to the funeral home when you die, not to your family. Pre-need policies are typically purchased from a funeral director who is also a licensed insurance agent.
No matter how you choose to fund a funeral, make sure your survivors know there's money set aside.