Final Expense Life Insurance
Final expense insurance is a type of permanent life insurance originally intended to cover funeral expenses. The death benefit is usually used to pay for final medical bills and other end-of-life expenses, like burial or cremation, items like caskets and urns, and more.
Like other permanent life insurance, burial insurance never expires and remains active as long as you pay your premiums. But, unlike most traditional permanent life insurance policies, which require a medical exam to determine the cost of your policy, you’ll only need to answer a few questions to qualify for final expense insurance.
Types of final expense insurance
There are two types of final expense insurance: guaranteed issue life insurance and simplified issue life insurance, which vary slightly in maximum benefit amounts, pricing, and the amount of medical information required to apply.
Guaranteed issue life insurance
Guaranteed issue policies offer near-certain application approval. In rare cases, insurance companies may ask “knockout questions” about terminal illnesses that disqualify you for coverage, but many providers offer coverage regardless of your health status. Because of this, guaranteed issue is more expensive than simplified issue and offers lower maximum coverage amounts, typically $5,000-25,000.
Simplified issue life insurance
Simplified issue life insurance is good for people who may not qualify for a traditional life insurance policy but are only considered moderate risk. You’ll have to answer a detailed medical questionnaire, but there is no medical exam involved. You’ll still pay more than you would for term life coverage, and you can get a simplified issue insurance policy with coverage up to $50,000.