Final expense, also referred to as burial insurance, is a type of permanent life insurance policy that covers funeral expenses. The death benefit, which is provided to the policyholder’s beneficiaries, can be used for said funeral expenses, as well as medical bills and other end-of-life costs. A final expense policy can provide a death benefit of up to $50,000.
A final expense policy will last your entire lifetime as long as you continue to pay your premiums. To qualify for a final expense policy, you do not have to undergo a medical exam, but you may be required to answer a few health questions.
Types of Final Expense
There are two types of final expense:
- Guaranteed Issue: This type is often referred to as “no questions final expense insurance.” It does not require you to undergo a medical exam, answer health questions, or present your medical and prescription history to the insurance company. However, because you are guaranteed to get this policy, there are some catches. It has a waiting period of two to three years. If you die during this waiting period, your beneficiaries will not be paid a death benefit; however, the insurance company will repay them your insurance premiums along with interest. Guaranteed issue policies are often meant for those with severe health conditions who cannot qualify for other insurance.
- Simplified Issue: This policy also does not require a medical exam, but it does require you to answer a medical questionnaire. If you are approved, you can secure coverage up to $50,000. However, because of the questionnaire, insurers can set a premium based on a modified risk assessment. This policy is typically meant for those who are considered moderate risk, but do not qualify for other policies.