Final expense insurance—aka guaranteed issue life insurance—is technically a type of whole life insurance. However, it is much easier to qualify for than other types of whole life insurance, and will tend to pay out an amount between about $2,000-$100,000 depending on the specific plan. The idea behind this type of policy is to help the beneficiaries of the plan, pay for the end of life expenses of the policyholder. This money can be used for whatever the beneficiary needs, which might include the policyholder’s bills incurred as a result of end of life health care, palliative care, funeral costs, legal fees, etc. Final expense life insurance can be a great way to set aside some money to make it easier for your loved ones to manage end of life responsibilities upon your passing.

Benefits of Final Expense Insurance

Final expense insurance is easier to qualify for than whole life insurance, but like whole life insurance, it guarantees a non-taxable payout after death. This makes final expense insurance attractive for someone who wants to help their loved ones with the costs of services like end-of-life care or a funeral. 

Final expense insurance is usually either a guaranteed issue insurance or a simplified issue insurance. These plans typically involve certainty that your beneficiaries will receive a payout upon your death. This makes them an attractive option for someone who wants to be sure there will be a payout.

Final expense insurance also doesn’t require a medical exam, so people who don’t qualify for other types of life insurance can still get this type of plan. Offering some coverage with this type of plan is an alternate way to protect your loved ones if you can’t get a term life or whole life plan.

Should I Get Final Expense Insurance?

Final expense insurance is one way to cover the costs associated with the end of life for your family and loved ones. Whether to get it depends greatly on your individual desires and circumstances, but in general, it’s best for people who are looking for a smaller guaranteed lump payout at the time of death.

It may also be a good alternative for people who can’t qualify for other types of life insurance plans because of medical conditions. Talking to a qualified insurance agent or financial adviser can help clarify whether final expense insurance or another type of life insurance is better for your needs.

Health IQ could help you save up to 30% on life insurance based on your health-conscious lifestyle.

Disclaimer: Products may not be available in all states and product features may vary by state. Insurance death proceeds are generally received income tax-free under IRS Section 101(a) provided the benefit is paid to the beneficiary in a lump sum. Health IQ licensed insurance agents not authorized to give legal, tax or accounting advice. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant.Disclaimer: Products may not be available in all states and product features may vary by state. Insurance death proceeds are generally received income tax-free under IRS Section 101(a) provided the benefit is paid to the beneficiary in a lump sum. Health IQ licensed insurance agents not authorized to give legal, tax or accounting advice. For advice concerning your individual circumstances, consult a professional attorney, tax advisor or accountant.