Final Expense Insurance

What it is

Final expense insurance is a whole life insurance product. People often buy it to help their families with end-of-life costs such as funeral and burial expenses. It is life insurance, not health insurance, and it is not part of Medicare.

How it generally works

• When the insured person dies, the policy pays a death benefit to the beneficiary named in the policy. The beneficiary decides how to use the money.
• As whole life insurance, a policy is designed to stay in force for the insured person’s lifetime as long as the premiums are paid.
• Some policies ask health questions on the application. Others do not.
• Some policies limit the benefit paid if death occurs during the first years of coverage. This is often called a graded death benefit.
• Product availability, benefits and underwriting vary by state and carrier.

Questions to ask

• Is the full death benefit payable from the first day of coverage?
• Can the premium change over time?
• What health questions, if any, are on the application?
• Who should I name as the beneficiary?