With a name like final expense insurance, most would assume it only has one use. But as you will see, there are a variety of ways to interpret what a final expense is. Final expenses are typically left up to your loved ones, but can also apply to your debts in some cases.
Final expense and inherited debts
In most cases, your bills won’t be passed on to your loved ones. Your assets will cover your bills according to their combined value. However, a beneficiary may be forced to cover your leftover debts in some circumstances.
A final expense related to your unpaid debts mainly involves whoever cosigned on a loan with you. Those debts get passed to that other person but leaving them a death benefit will ease the stress because they’ll be able to cover at least a significant portion of the inherited debt.
Final expense and your loved ones’ debts
Final expense mostly has to do with your loved ones’ own debts instead of those they would inherit.
Final expense can refer to your loved ones’ debts. These debts are where the definition of “final expense” becomes diverse. Medical bills, mortgages, student loans, and credit card debts are all common sources. The interest rates for some of these make them even harder to pay off, making complete payment seem impossible. With a death benefit, these expenses no longer lurk in the back of your loved ones’ minds.
Final expense and funeral costs
This is the most common use. In the classic sense, a final expense refers to your funeral. The final expense insurance death benefit ranges from $2,000 to $50,000 depending on your policy, but the typical death benefit is around $10,000 to $20,000. This is enough to pay for all funeral costs. Funerals usually cost between $7,000 to $12,000.
Funeral costs are a combination of costs rather than a single expense. For example, these options can have a major impact on your overall funeral costs:
- Burial or cremation (can also be done directly, which can eliminate embalming costs as well)
- Whether you have a funeral service
- The funeral home you choose
And just like how the combined costs of a funeral can be considered a final expense, any of the individual aspects that contribute to the overall cost can be viewed as a final expense as well.
In this case, your beneficiary will be able to cover the entire funeral while also having some funds left over to pay for other expenses.
Get your final expense taken care of
No matter what your personal final expense is, you can join a policy that will help take care of it. At Final Expense Direct, we will work with you and get you a final expense insurance policy that best fits you, what you want taken care of, and what you’d like to leave behind. To find out more, please call us today at 1-877-674-0236.