Final Expenses: A Gift of Peace for the People You Love
Final Expenses: A Gift of Peace for the People You Love
No one likes to think about their own funeral. But planning ahead is one of the kindest things you can do for your family. It means they can grieve without worrying about how to pay the bills. Here's what to know.
What end-of-life costs can include
Funerals cost more than many people expect. According to the National Funeral Directors Association's 2023 General Price List Study, the national median cost of a funeral with a viewing and burial was $8,300, and a funeral with a viewing and cremation was $6,280. Those numbers don't include things like a cemetery plot, a headstone, or a burial vault.
On top of the funeral, families may face final medical bills, travel for relatives, unpaid debts, and time off work. Without a plan, these costs often fall on children or a surviving spouse.
How final expense insurance works
Final expense insurance is usually a small whole life policy designed to cover end-of-life costs. Common features:
- Smaller coverage amounts than a typical family protection policy.
- Simpler applications. Many policies use health questions instead of a medical exam.
- Premiums that usually stay the same for life.
- Lifelong coverage, as long as premiums are paid.
If you have certain health conditions, you may be offered a graded or modified benefit. That means the full death benefit may not be paid if
death from illness happens in the first two or three years. Instead, the policy may return premiums, sometimes plus interest. The details vary by policy.
Who it's often a fit for
Final expense coverage is often considered by people in their 50s, 60s, 70s, and beyond who want a simple way to cover end-of-life costs. It can also be a fit for someone whose term policy has ended, who doesn't want a large policy, or who has health conditions that make other coverage harder to get. Younger families with children and a mortgage usually need more coverage than a final expense policy provides, so a larger policy may make more sense for them.
Other ways to plan
Final expense insurance isn't the only option. Families also use:
- A preneed funeral plan bought directly from a funeral home. It can lock in choices, but read the contract closely, including what happens if you move or the funeral home changes owners.
- A payable-on-death (POD) bank account that passes straight to a named person.
- Savings set aside for this purpose.
- A larger life insurance policy that covers final costs along with other family needs.
Under the Federal Trade Commission's Funeral Rule, funeral homes must give you an itemized price list, which can help you compare.
Talk about your wishes
A plan is more than money. Write down your wishes and share them:
- Burial or cremation?
- What kind of service, and
where?
- Who will make decisions?
- Where are your policy, will, and important papers kept?
Questions people ask
Can I get coverage in my 70s or 80s?
Often, yes. Many final expense policies accept older applicants, though age limits, prices, and health questions vary by insurance company and state.
Does the money have to be used for the funeral?
No. The beneficiary receives the money and decides how to use it. That's why it's important to name someone you trust and tell them your wishes.
Can a funeral home be paid directly?
In some cases, a beneficiary can assign part of the benefit to the funeral home. Ask how it works before you need it.
Sources: National Funeral Directors Association, 2023 General Price List Study (nfda.org); Federal Trade Commission, The Funeral Rule (ftc.gov).
WEDOIT education, led by Dr. Joel M Tchafack, PharmD, a pharmacist and licensed life insurance professional in NM, CO, MD, NC, SC, TN, TX, VA and WY (NPN 19623090). WEDOIT LLC, Carlsbad, New Mexico 575-266-3119 · info@wedoitinsurance.com
This content is for education only and isn't tax, legal, or investment advice. Coverage and benefits depend on the product, carrier, state, and underwriting.