Is Final Expense Insurance Worth It?

Written by Kim Wilhelm

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Last Updated 14 Jun 2024

For many people, the thought of their loved ones having to pay for their funeral is a scary one. 

With rising funeral costs and other debts you may have, leaving your family with your bills after you pass away can seem overwhelming.

This is where final expense insurance can help!

Final expense insurance (also known as burial insurance) is designed to help families with burial costs after their family member passes away. 

It can be a great way to ensure that your loved ones are taken care of financially after you’re gone. 

However, it’s important to understand how this type of insurance works before deciding. 

In this article, we’ll take a closer look at final expense insurance and whether it’s worth the investment.


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How to Know if Final Expense Insurance is Worth It

Deciding if final expense insurance is worth it is not as easy as you might think.

There are two costs you need to analyze to decide whether burial insurance is worth it to you: 

1.) What expenses are you expecting to cover?

  • Funeral
  • Casket
  • Cemetery plot and associated expenses
  • Memorial service
  • Cremation
  • Unpaid debt
  • Etc.

2) Cost of premiums- How much are you able to afford in your monthly budget?

These costs, are a great place to start when considering how valuable a final expense insurance policy is to you and your family.

At Final Expense Direct, we recommend families evaluate their individual needs carefully before making any decisions. 

Ultimately, whether burial insurance is worth it to you depends on your budget and end-of-life needs.

Here are some other considerations that may help you decide if final expense insurance is right for you: 

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To decide whether final expense insurance is worth it to you, you need to start by comparing the cost of your end-of-life expenses, with the cost of burial insurance.

Final expense insurance does what it’s intended to do:provide peace of mind that final expenses such as funeral costs or unpaid end of life expenses will be taken care of after you pass away.

For many people, that’s more than worth the cost of monthly premiums.

Cost of Premiums 

Next, it’s wise to consider the cost of premiums and if you can afford them in addition to other expenses. 

With burial insurance, how much you pay in premiums depends on your age, health, gender, and the size of the policy. 

Here’s what you can expect to pay for a $10,000 final expense insurance policy:

Sample rates for male and female simplified issue benefits
Sample rates for male and female guaranteed issue benefits

Most final expense premiums are very affordable depending on your budget. 

Cost of Funerals

With funeral costs rising every year, many families struggle to know how much money to set aside for a funeral. 

As of 2023, the average funeral ranges from $8,000- $10,000 (in some states as high as $14,000).

Because of this, we often see families opting for a cremation instead of a burial, which can save families considerablemoney. 

However, many still struggle to come up with the funds needed for a cremation, which can cost between $3,000 to $5,000.

But don’t just take our word for it, the NFDA released some numbers that show that since 2017, funeral costs have risen over 6% and the median cost of a funeral with cremation has increased to over 11%.

If you’re interested to know how much a funeral cost in your state, we wrote an article explaining what you can expect to pay on average for a funeral. We also included an infographic that breaks down the cost for you: 

Funeral costs by each state

Planning a Funeral with no Money

With the cost of funerals being as high as they are, for many, it can seem overwhelming when considering how to pay for a loved one’s funeral.

With burial insurance, some policies can cover up to $35,000, but the average policy is $10,000.

The average funeral in most states is $7,000-$10,000. The average cremation is $3,000-$5000.

This means that with a final expense policy, you will be able to cover the majority, if not all, of your funeral costs.

Understanding Final Expense Insurance Policies

Now that we’ve started to look at some of the worthwhile reasons for burial insurance, let’s look at burial insurance policies that are available for you.

There are three different types of burial insurance policies:

  • Traditional Immediate Benefit
  • Graded/Modified
  • Guaranteed Issue

Each type serves a purpose and will give you a different benefit depending on which one you qualify for.

Immediate Benefit

Immediate Benefit final expense insurance offers the lowest cost and provides the full death benefit if you pass within the first two years of obtaining the policy.

You can read more about this type of policy in a recent blog we wrote about “What to Look for in a Final Expense Policy

Graded/Modified Issue

Graded/Modified Benefit final expense insurance is a type of policy that is best for those with semi-serious health conditions. 

In Texas, a graded final expense insurance policy has a two-year waiting period before a benefit can be received (except for death by accident, which pays the full death benefit during the first two years).

Here’s how benefits are distributed: 

If you die within the first year of being insured, your loved ones will get anywhere from 25-50%. The year after that, they will receive anywhere from 50-75%, depending on the insurance company.

Once year three has passed, your loved ones can expect to receive the full benefit. 

If you want to learn more about graded insurance, we wrote about it in our guide that covers everything about final expense insurance.

Guaranteed Issue 

Guaranteed Issue final expense insurance policy works similarly to Graded/Modified in two ways: 

  • The death benefit has a two-year waiting period
  • The death benefits go directly to your beneficiaries.

A Guaranteed Issue final expense insurance policy is more expensive, as more serious health conditions are accepted. However, your approval is guaranteed.

If death due to natural causes occurs within the first two years, your beneficiaries will receive all premiums paid plus interest (except for death by accident, which pays the full death benefit during the first two years).

If you want to learn more about Guaranteed Issue insurance, we wrote about it in our guide Everything You Need To Know About Final Expense Insurance.

Other Questions to Ask When Considering Final Expense Insurance

At Final Expense Direct we often get asked whether final expense insurance is worth it.

If it still seems confusing, here are some other questions that will hopefully help you:

  • Who is it for?
  • What type of policy do you qualify for?
  • What do you want out of a final expense insurance policy?

Below, we break down each of these questions so you can determine if final expense insurance is worth it to you. 

Who Is Final Expense Insurance For?

The end goal of final expense insurance is to help lessen the financial burden left on families after you pass. 

Simply put, final expense insurance is best for people that: 

  • Want peace of mind
  • Who are unable to pay for final arrangements out-of-pocket 
  • Do not want to leave financial responsibility to their loved ones  

If you relate to the above, reach out to our team for a quote and see how much coverage you qualify for.

What Type of Policy You Qualify For 

When considering if final expense insurance is worth it to you, it’s important to consider what policy you may qualify for.

The type of policy you qualify for varies based on age, health, gender and coverage amount.

Most final expense insurance companies offer 3 (3, not 3-4) 

While we can’t guarantee that you will qualify for immediate benefit, there are other types that you are guaranteed to qualify for and that we think are worth considering.

What Do You Want Out of a Final Expense Policy? 

Once you understand final expense insurance and the type of policy you may qualify for, it’s worth considering what you want out of a final expense insurance policy. 

Most people come to Final Expense Direct for help with 4 main issues: 

  • They want to ease the financial burden of their end-of-life expenses on their loved ones
  • They don’t have the funds for a traditional funeral, but they want to have one
  • They were unable to qualify for other life insurance policies
  • They want to work with a respected, professional agency that specializes in providing the best burial insurance plans to seniors

If these apply to you, then final expense insurance is worth it.

How Final Expense Direct Helps

Final Expense Direct works with all of the top insurance companies to ensure that our customers get the best plans, plus all of the additional features and benefits available at the best rates. 

If you want peace of mind for your burial expenses or if you just want to make sure your family does not have to feel a heavy financial burden when you die, then we can help! 

Our process is really easy and done over the phone so you never have to step foot in our office, or have an agent come to your home.It’s worth giving us a call today to see how we can help you!

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