What Is Final Expense Insurance? Definition

Why it matters

Families buy final expense insurance so loved ones do not have to cover funeral costs out of pocket. Many policies use simplified or guaranteed issue underwriting, so approval is easier for people with health problems. Premiums are level and coverage lasts for life as long as premiums are paid. Some policies pay only a partial benefit in the first two or three years. Maximum face amounts, age limits, and waiting periods vary by carrier and state.

Source: iii.org

Where we use this term

Related terms

Burial Insurance: Burial insurance is a common name for small whole life policies that pay for burial, funeral, and related costs. The term is used the same way as final expense insurance. The benefit goes to a named beneficiary.
Funeral Costs: Funeral costs are the expenses for a funeral or other final arrangements, such as services, a casket or urn, a burial plot or cremation, and transport. Prices vary widely by provider and location.
Graded Death Benefit: A graded death benefit is a payout that is only part of the face amount, or a return of premiums with interest, if the insured dies of natural causes in the first years. Full coverage starts after that waiting period.
Simplified Issue Life Insurance: Simplified issue life insurance is coverage approved using a short health questionnaire and database checks, with no medical exam. A few health answers can lead to a decline, so approval is not guaranteed.
Guaranteed Issue Life Insurance: Guaranteed issue life insurance is coverage that accepts applicants without health questions or a medical exam. Approval is guaranteed within the age limits, but the face amount is small and a waiting period usually applies.

All 241 terms

Why it matters

Where we use this term

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