Understanding Final Expense Insurance: Planning for End-of-Life Costs

Feb 17

Planning for end-of-life expenses is an essential part of financial preparedness. Final expense insurance is a type of whole life insurance designed to cover costs such as funeral services, medical bills, and outstanding debts. Unlike traditional life insurance, these policies typically offer smaller death benefits (ranging from $2,000 to $20,000) and are accessible without a medical exam, making them a viable option for those with health concerns.

One of the key advantages of final expense insurance is its flexibility—while intended for funeral and burial costs, beneficiaries can use the payout for any needs that arise. However, it’s important to assess whether additional coverage is necessary if you already have a comprehensive life insurance plan.

Whole Life vs. Term Life Insurance: What’s the Difference?

When considering life insurance, it’s helpful to understand the key differences between whole life insurance (which includes final expense policies) and term life insurance:

Whole Life Insurance: Provides lifelong coverage with a guaranteed death benefit and builds cash value over time. Premiums remain consistent, and policies can be used for estate planning or final expenses.
Term Life Insurance: Covers a specific period (e.g., 10, 20, or 30 years) and typically offers larger death benefits at lower premiums. However, once the term ends, coverage ceases unless renewed.

Final expense insurance falls under whole life insurance, meaning it never expires as long as premiums are paid. This can be a beneficial option for those wanting guaranteed coverage for end-of-life expenses without worrying about policy expiration.

For those exploring their options, understanding the details of final expense insurance can help ensure that your loved ones are not left with unexpected financial burdens. Learn more about how it works and whether it’s the right fit for you by visiting this article from Northwestern Mutual.

Scott Gaylor at Northwestern Mutual is a long time friend and a person I trust to refer my clients to when they need a trusted financial advisor. My clients trust me with their final chapter and a good death doula will always have a solid referral for all aspects of end-of-life. Contact Scott here.