Final Expense

Final expense insurance is a type of permanent life insurance used to cover end-of-life expenses such as burial, cremation, and medical bills. Since final expense insurance is a type of permanent life insurance, the policy does not expire and will remain active as long as the policyholder pays their premiums. However, unlike many permanent life insurance policies, you do not need a medical exam to fix the cost of a final expense policy. 

Guaranteed issue life insurance and simplified issue life insurance are two types of final expense insurance. Guaranteed issue life insurance generally accepts coverage applications regardless of the applicant’s health status. With guaranteed issue life insurance, the chance of the application approval is near certain. Due to this, the policy is more expensive than simplified issue life insurance. Also, the maximum coverage amounts are lower. Simplified issue life insurance is a type of life insurance that is more suitable for individuals that may not be eligible to purchase a traditional permanent life insurance policy due to certain health conditions. Simplified issue life insurance does not require a medical exam. However, you may need to fill out a detailed medical questionnaire.  

Though final expense life insurance is meant for end-of-life expenses, the beneficiary is not legally mandated to use it for that purpose. However, if you want to ensure the death benefit is used as planned, there are some steps to take. First, you can name a trusted individual as the beneficiary. This person will ensure the death benefit is used for the proposed expenses. Alternatively, you can name a funeral home as the beneficiary or send your wishes to a financial advisor.