Small policies designed specifically to cover end-of-life costs.
Final expense insurance — also called burial insurance or funeral insurance — is a small whole life insurance policy designed specifically to cover end-of-life costs. Coverage amounts typically range from $5,000 to $25,000, and the death benefit is meant to pay for funeral services, burial or cremation, medical bills, and other final expenses.
Unlike traditional life insurance that replaces income or pays off large debts, final expense insurance has a narrow purpose: keeping your family from having to cover your funeral costs out of pocket. The average funeral in the U.S. costs $7,000–$12,000, and final expense policies are sized accordingly.
Final expense premiums depend on your age, health, and coverage amount. A 65-year-old might pay $50–$100 per month for a $10,000 policy, while a 75-year-old might pay $100–$200 for the same amount. Because the death benefit is small, the cost per dollar of coverage is higher than term life insurance.
Common coverage levels: $5,000, $10,000, $15,000, $20,000, or $25,000. Most people choose $10,000–$15,000 to cover a modest funeral and any remaining medical bills.
If you have enough savings that your family could easily cover $10,000–$15,000 in final costs, you may not need a final expense policy. But if an unexpected funeral bill would create financial strain for your loved ones, a small policy provides peace of mind. Consider setting aside the premiums in a dedicated savings account as an alternative.
Usually not. Most final expense policies use simplified underwriting — you answer health questions but don't need a physical exam. Some guaranteed issue policies require no health questions at all, though they cost more and may have a waiting period.
Yes, with their consent. Many adult children purchase final expense policies on their aging parents to avoid being burdened with funeral costs later.