Kim Wilhelm CEO of Final Expense Direct Life Insurance
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Written by Kim Wilhelm

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Last Updated 24 Sep 2021

Funeral homes provide burial and funeral services for people who have died. They can also sell you life insurance before you pass away. This is how to buy final expense insurance from a funeral home.  

Can I Buy Final Expense Insurance From A Funeral Home?

Simply put, No. 

If you are hoping to buy life insurance from your funeral home director, final expense is not an option.

Funeral homes sell a different type of insurance, called pre-need insurance. These policies are different from final expense policies, because they are intended to give you the assurance that your desired insurance arrangements will be paid for. 

Pre-need insurance is not sold directly by insurance companies, instead funeral home directors, who are licensed agents, will sell you the policies.

When you purchase a pre-need policy, the funeral home is listed as the beneficiary, covering the cost of your funeral and burial. The funeral director will also receive a commission for selling you the policy, much like any other insurance agent. 

Your options for pre-need policies are quite limited as well, because funeral homes usually only offer policies underwritten by a single insurance company. This means you won’t have much freedom to compare rates, unless you visit multiple funeral homes. 

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Funeral Insurance Options and Limitations 

Some people prefer pre-need insurance, because it is simple and ensures that your funeral expenses will be paid. But others like the flexibility of final expense death benefits. With final expense insurance, your beneficiaries have freedom to use the death benefit for anything they need, while pre-need insurance purchased through a funeral home can only be spent on funeral and burial or cremation costs. This limitation is what leads many people to choose final expense insurance, rather than pre-need coverage. 

Final Expense Insurance Vs Funeral Insurance

Final expense policies are low-value life insurance policies that you can purchase directly from an insurance company. These policies are normally permanent life insurance, meaning they provide you with coverage for your entire lifespan, as long as you pay the premiums. In some cases, you may be able to find term life final expense policies, but they are far less common. A term life policy will only cover you until a certain age, so permanent options are the more versatile form of coverage. 

The Four Types of Funeral Insurance Premiums

Funerals are not cheap – oftentimes they average $9,000. This is an inevitable part of life and an expense that must be paid upfront. There’s not much time between when a loved one dies and when their funeral takes place. Luckily, final expense insurance provides that financial safety net so funeral costs are not as intimidating. Just like how you can make the choice between standard and pre-need funeral insurance, you can choose how you’d like to structure your premium payments.

Stepped Premiums

Stepped premiums build up every year. Your premiums take your age, health, sex, and death benefit size into account. Then your policy calculates exactly how much you will pay in premiums for the year.

This is a good option if you’re someone who maintains a healthy lifestyle and doesn’t have any illnesses. Your premiums will not go up as much as someone who has poor lifestyle habits.

Leveled Premiums

Rates never go up. The premium costs are decided from the very beginning, and given that you’re paying your premiums, the rates never go up. This is an option because the leveled premiums will appear more expensive than the other choices at first, but since it never changes, it can end up being cheaper.

This is a conservative approach to premium payments. This eliminates the unpredictability element that comes with paying premiums every year. You won’t have to worry about how much your premium is going to increase, because it will never increase, to begin with.

Capped Premiums

Limit-based, either by age or amount spent on policy. For example: if your policy has capped premiums where the age limit is 90, then you will never have to pay a premium again after you’ve turned 90. A policy may have a limit of $100,000, and once you’ve paid that amount over the years, you don’t have to pay premiums after you’ve reached that.

Capped premiums are a great option for someone who joins a policy very early on when they’re first eligible. If you’re in it for the long haul, this helps guarantee that you will get to a point where you will no longer have to make payments.

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Payout Guarantee

This specifically applies to what your beneficiary will receive. This guarantees that your beneficiary will receive the higher of one of these two amounts – the precise amount of premiums you’ve paid, and the amount of the original insurance.

Why Is There a Waiting Period for Funeral Insurance?

Funeral insurance policies have a waiting period, which means that to get the full benefit amount, a designated amount of time must pass. That amount of time varies, so it’s best to check with your insurance provider and ask about those details before enrolling.

The Importance of Waiting Periods

Waiting periods help eliminate fraud and ensure that all insurance payouts are fair. By observing waiting periods, insurance companies know that policies were bought for fair reasons, and there’s less cause to believe that something suspicious is occurring.

Insurance companies weigh risk when offering individuals a policy. By including waiting periods in policies, the insurance company can assess the risk, and both parties are given a fair deal. Waiting periods also allow premiums to be cheaper and more accessible.  

How Funeral Insurance Waiting Periods Are Helpful

Whether or not you’d like to have an elaborate funeral, it’s still an excellent idea to pay for funeral insurance. Funerals can be extremely costly, something that many families don’t consider or aren’t prepared for. If you want to provide for your funeral costs and set aside some money that can go toward that, purchasing a funeral insurance policy is an excellent way to do so.

Funeral insurance waiting periods allow insurance companies to be comfortable when offering funeral insurance policies. Because they do this, many people’s families can afford to provide them with the service that they wanted.

Purchasing funeral insurance means that your family is prepared. Many people are unsure about what their financial situations will be like in the future, so purchasing a funeral insurance policy will make sure that your family can give you the funeral that you want. Purchasing funeral insurance can be a good time to start making a funeral plan.

Whether you have small or large plans, sharing them with your family means they’ll need to make fewer decisions during the time when they’re grieving. This is a gift that can relieve stress and ensure your funeral is the way you want it to be.

Need Help with Purchasing a Funeral Insurance Policy?

If you want to purchase a funeral insurance policy but don’t know where to begin, let us help! Determining what waiting period is appropriate when selecting a plan can be complicated, so we can assist with that process. At Final Expense Direct, our professionals are here to provide you with advice and help you select an insurance plan that will fit your needs.

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Can You Cancel a Funeral Insurance Policy?

Yes, it’s possible to “cancel” a funeral insurance policy. However, this is not recommended and can have large financial impacts.

Enrolling in a funeral insurance policy is an important decision and one that should not be taken lightly. This is partly because “canceling” a funeral insurance policy will mean that you’ll lose all of the money you’ve paid into it.

Choosing the Right Funeral Policy

Choosing the right funeral insurance policy is incredibly important. When applying, consider the premium and whether you think you’ll be able to make timely payments for the duration required. If you think you may not be able to afford the premiums, consider purchasing another plan, or making other arrangements.

Keep in mind that funeral insurance and burial insurance are two separate things. If you wish to get insurance to cover your burial, there are other policies solely intended for that.

What Happens If I Cancel?

Canceling a funeral insurance policy means that you’ll stop paying the required premium. If this occurs, you won’t receive any of the death benefit and will also not be refunded any of the money you’ve previously paid into the policy. This can be extremely costly, which is why it’s important to select a plan that you’re confident in from the beginning.

Canceling a funeral insurance policy can mean losing a large sum of money. If it’s at all possible to continue paying your premium, it’s typically best to do so.  This will ensure that you’re not losing any money you’ve already paid, and your loved ones can still receive the death benefit specified by your plan.

Why Choose Funeral Insurance?

Funeral insurance can provide you with the peace of mind that comes from knowing you’ve made preparations and a plan to cover the costs of your funeral.  Funerals can be costly, so if you have grand plans, it’s best to purchase an insurance policy that can fulfill those.  

Making preparations for your funeral is another way to ensure that your wishes are being carried out. It can be overwhelming to think about making plans, but it’s one of the best ways to tell your loved ones what you want. Funerals can vary greatly, so it’s best to make detailed instructions and be clear about what you envision for your remembrance.

For all your funeral insurance questions, call 1(877) 674-0236 and speak with one of our professionals.

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Where To Get Funeral Insurance Alternatives

Final expense insurance is available from most major life insurance companies. Therefore, the best way to find a policy is by getting in touch with a licensed insurance agent or broker. They will help you collect quotes and identify the best policy for your current situation.

Find Funeral Insurance

If you want a more versatile form of life insurance, start shopping for final expense coverage now. The trained insurance agents at Final Expense Direct can help you find the policy you are looking for. Just give us a call at 1-877-674-0236 to get started with a free quote.