Is Final Expense Insurance Worth It?

Final expense insurance is worth it if you lack savings for funeral costs or can't qualify for traditional life insurance.

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Written by Mark Fitzpatrick

Updated: December 12, 2025

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Key Takeaways

Final expense insurance (also called burial insurance) helps loved ones pay funeral and end-of-life costs, with coverage typically ranging from $5,000 to $50,000.

Premiums stay fixed for life, and most policies don't require a medical exam, making this coverage accessible to seniors and those with health issues.

The main drawbacks include a higher cost per dollar of coverage compared to term life, limited death benefits and possible two-year waiting periods on guaranteed issue policies.

Final expense insurance makes sense if you lack savings for funeral costs, can't qualify for traditional life insurance or want a dedicated policy for end-of-life expenses.

If you already have adequate life insurance or savings, this coverage may not be necessary.

What Is Final Expense Insurance?

Final expense insurance is a type of whole life insurance policy designed specifically to cover funeral, burial, cremation and other end-of-life expenses. It's also known as burial insurance, funeral insurance or cremation insurance. Most policies cover anywhere from $5,000 to $50,000, which is lower than traditional life insurance policies but sized appropriately for covering funeral costs. Some companies offer coverage amounts as low as $1,000.

Final expense insurance isn't prepaid funeral coverage. Your beneficiaries must file a claim with the insurance company after you pass away to receive the death benefit. The insurer then pays out a lump sum that beneficiaries can use for any purpose, though most families use the funds for funeral-related costs.

Final expense insurance works like other permanent life insurance policies. You apply for coverage and agree to a premium amount based on your age, health status and coverage amount selected. You then pay monthly or annual premiums to keep the coverage active.

Coverage availability and regulations vary by state. Some states may have additional consumer protections or different policy requirements.

What Does Final Expense Insurance Cover?

Beneficiaries can use the death benefit for any expense since the payout isn't restricted to specific costs. Families typically use final expense insurance proceeds for funeral services, burial plots, cremation, memorial programs and funeral home fees. The funds also help cover outstanding medical bills from a final illness or hospitalization, small debts like credit cards and utility bills, and legal and administrative costs, including death certificates and probate filings.

Some families use a portion for travel expenses, allowing relatives to attend the funeral, or to cover everyday household expenses during the transition period.

Pros and Cons of Final Expense Insurance

Final expense insurance offers clear benefits and notable drawbacks. Review both to determine if this coverage fits your situation.

Advantages of Final Expense Insurance

Easy qualification: Final expense insurance offers broader approval compared to traditional life insurance. Most policies don't require a medical exam, which removes a significant barrier for many applicants.

Simplified issue policies require only basic health questions, while guaranteed issue life insurance options accept applicants regardless of health status. This accessibility makes final expense coverage ideal for seniors and those with pre-existing conditions who might not qualify for other life insurance products.

Lifetime coverage with fixed costs: As a whole life policy, final expense insurance provides permanent coverage that never expires as long as premiums are paid. Your premium locks in at purchase and remains the same throughout the policy's duration, protecting you from rate increases as you age.

Fast claims and flexible use: Insurance companies usually process final expense claims within 24 to 48 hours after approval, providing families with funds quickly when they need them most. Beneficiaries receive the death benefit as a tax-free lump sum and can use the money for any purpose. This flexibility means families aren't limited to using the funds only for funeral costs.

Cash value component: Like other whole life policies, final expense insurance builds cash value over time. You can borrow against this cash value if you need funds during your lifetime, though any outstanding loans reduce the death benefit your beneficiaries will receive.

Drawbacks of Final Expense Insurance

Higher cost per dollar of coverage: Final expense insurance premiums cost more per thousand dollars of coverage compared to term life insurance. Because these policies accept applicants with health issues and don't require medical exams, insurers charge higher rates to offset the increased risk.

Limited death benefits: Coverage amounts often cap at $25,000 (some offer up to $50,000), which may not cover large debts, mortgage balances or long-term income replacement needs. Families needing more extensive coverage should consider traditional life insurance options instead.

Potential waiting periods: Guaranteed issue policies (those with no health questions) include a two-year waiting period before full benefits apply. If death occurs during this period, beneficiaries receive only a refund of premiums paid, often with interest, rather than the full death benefit. Simplified issue policies with health questions usually don't have this waiting period.

Contestability period considerations: If you pass away within the first two years of the policy, insurers may review claims more thoroughly to verify the accuracy of your application information. This contestability period is standard across life insurance products, but can potentially delay payouts while the review takes place.

Is Final Expense Insurance Right for You?

Deciding on final expense insurance can feel confusing with so many factors to consider. Your financial situation, health status, and existing coverage determine whether final expense insurance fits your needs. This type of policy serves a specific purpose and works better for some people than others.

When Final Expense Insurance Makes Sense

Final expense insurance may be a good fit if you fall into any of these categories:

No current life insurance

You don't have existing coverage and want to ensure your family won't struggle to pay for your funeral expenses.

Expiring term policy

Your term life insurance is ending soon, and you want permanent coverage that won't expire regardless of age.

Limited savings

You haven't set aside funds specifically for end-of-life costs and want guaranteed money available for your family.

Health conditions

Pre-existing conditions make qualifying for traditional life insurance difficult or impossible, but you still want coverage.

Senior seeking easy approval

You're over 50 and want straightforward coverage without medical exams or lengthy underwriting processes.

Dedicated funeral fund

You want a separate policy specifically designated for funeral costs so other life insurance can cover different needs.

When Final Expense Insurance Might Not Be Worth It

You may want to skip this coverage or explore alternatives if any of these situations apply:

Have adequate existing coverage

Your current life insurance policy already provides enough to cover funeral costs alongside other financial needs.

Designated savings

You have savings or investments specifically set aside for end-of-life expenses and don't need insurance for this purpose.

Qualify for term life

You're healthy enough to get approved for term life insurance at lower rates, making that option more cost-effective.

Prefer self-funding

You'd rather save money on your own instead of paying ongoing premiums and can commit to building that fund.

Need higher coverage

You require more than $50,000 to replace income or pay off significant debts, which exceeds typical final expense limits.

Is Burial Insurance Worth It: Bottom Line

Final expense insurance provides affordable and accessible coverage that pays for funeral and end-of-life expenses. The policy's advantages, including no medical exam requirements, fixed premiums and lifetime coverage, make it valuable for seniors and those with health conditions.

Higher costs per dollar of coverage and limited death benefits mean this insurance isn't right for everyone. Evaluating your existing coverage, savings, health status, and family needs helps determine whether final expense insurance or another option better fits your situation.

Final Expense Insurance: FAQ

How much does final expense insurance cost?

Monthly premiums vary based on your age, health status and coverage amount. According to MoneyGeek's survey, a 50-year-old man in average health and who doesn't smoke pays an average of $46 per month for $10,000 coverage. A 50-year-old woman with the same profile and coverage pays an average of $39 per month.

Learn more: Best Burial & Final Expense Insurance Companies

What's the difference between simplified issue and guaranteed issue?

Simplified issue policies require answering health questions but offer immediate full coverage and lower premiums. Guaranteed issue policies accept all applicants regardless of health, but include a two-year waiting period before full benefits apply and charge higher premiums.

Choose simplified issue if your health allows qualification; opt for guaranteed issue only if health conditions prevent approval elsewhere.

Can I have both final expense insurance and regular life insurance?

Yes. Many people maintain a larger term or whole life policy for income replacement and major expenses while adding a smaller final expense policy specifically designated for funeral costs. This approach ensures funeral expenses don't reduce the funds available for other family financial needs.

How quickly do beneficiaries receive the death benefit?

Most insurers process final expense claims within 24 to 48 hours after receiving the required documentation. Beneficiaries receive the death benefit via check or direct deposit within a week of claim approval. Delays may occur if the death happens during the contestability period (first two years) or if documentation is incomplete.

What happens if I stop paying premiums?

If you stop paying premiums, your policy will lapse after a grace period (usually 30 days). If your policy has accumulated cash value, some insurers offer options to use that value to cover missed premiums temporarily or to convert to a reduced paid-up policy with a lower death benefit that requires no further payments.

Is final expense insurance the same as prepaid funeral plans?

No. Prepaid funeral plans are contracts with specific funeral homes that lock in current prices for predetermined services. Final expense insurance pays a cash benefit to your beneficiaries, who then decide how to use the funds. Insurance provides more flexibility since beneficiaries aren't tied to a specific funeral home, but prepaid plans protect against future price increases for those who prefer predetermined arrangements.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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