Jeff is a well-known speaker and expert in life insurance and financial planning. He has been featured and quoted in Nerdwallet, Bloomberg, Forbes, U.S. News & Money, USA Today, and other leading finance websites. He is a licensed life insurance agent and has helped over 3000 people secure life insurance. He is licensed in all 50 states & DC. Jeff has spoken at top insurance conferen...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Oct 14, 2020

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Did you know that the Social Security Administration only pays $255 when someone passes away? Since a funeral costs $9,000 on average, loved ones are responsible to pay for the difference.

If you leave no savings to cover this cost difference, which averages $8,745, your loved ones will face a difficult burden. It’s no wonder GoFundMe campaigns pop up all over social media to cover final expenses.

Burial insurance offers a cost-effective way to pay for your funeral service and any outstanding debts so your family doesn’t have to pay out of pocket or ask for donations.

This is why final expense coverage has become one of the fastest-growing segments of life insurance sales in the United States.

IN THIS ARTICLE:

The Problem (& The Solution)

senior couple secured with final expense policyNobody wants to burden their family members with the cost of a funeral and any debts they currently have or will have at the time of death. Small unsecured loans, medical bills, burial costs — it could add up to $30,000 or $40,000.

Your family members would take on personal debt, organize fundraisers, or sell their personal belongings to preserve your dignity in death. Families do it every day because so many people do not have the cash to pay for a funeral and other final expenses.

But you don’t have to leave your loved ones facing this dilemma. Final expense life insurance policies exist specifically to address your need for end-of-life cash.

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What Is a Burial Policy?

Burial insurance is not technically a type of life insurance. Burial coverage is just a marketing term.

This is why you’ll find so many different names for this kind of insurance: final expense insurance, burial insurance, funeral insurance, to name a few.

Ultimately, all these names refer to one thing: a simplified issue whole life insurance policy with a small death benefit. These policies do not expire and the monthly premiums are fixed for life. The face value can’t decrease.

When it’s all said and done, these policies provide cold hard cash so your family has the money to pay for your final expenses.

Fortunately, every funeral home, no matter where they are, accepts cash.

Burial policies from the best life insurance companies pay out the cash quickly. Your coverage would take effect immediately with no waiting period. So these policies can be the best answer if you’re worried about your funeral costs or other final expenses.

How Do I Find the Best Burial Insurance Policy?

This article will show you exactly how to find your best option for final expense insurance. This coverage should be affordable, easy to buy, and simple to understand.

When it’s not, you can find better options.

Life insurance companies depend on name recognition to sell their products, and for good reason: Shoppers associate reliable names with reliable coverage.

Often name recognition and quality go hand in hand. But not always. This post will share some common burial insurance pitfalls to avoid. Some may surprise you.

If you are seriously considering a final expense policy, this article is a must-read. If you know a loved one who needs burial insurance, copy the link, and share this post. It could save you a lot of trouble later.

What Is the “Best Burial Insurance”?

Before we continue, let’s agree on a definition of “best burial insurance coverage.” I’ve noticed that most articles online lack clarity. They assume readers already know what an insurance agent knows. Or else they’re so basic readers don’t learn anything.

As a consequence, shoppers often have little idea of how insurance works and how they can shop for the best burial insurance quickly and easily.

So here’s the deal: The best burial insurance policy is one that costs the least and protects you as soon as possible. That’s it.

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Notice I didn’t say you need to make sure the company has a specific rating with A.M. Best. I didn’t say your life insurance company needs a century of service to qualify as one of the best.

At the end of the day, the best plan out there is the one from a reputable insurer that covers you sooner than later. In addition, the best coverage often costs less than what the other insurers would charge you.

Every situation and circumstance is different and unique, but most final expense life insurance plans feature the same basic options.

The Myth About Final Expense Life Insurance

If you search online for the best burial insurance companies, you will find a ton of articles that mostly share the same general advice.

Most writers (who aren’t experts in this business by the way) encourage you to look for companies that match this profile:

  1. A good A.M. Best rating.
  2. A long history in the insurance industry.
  3. An impressive annual revenue.
  4. They have well-known household names.

If you were to follow this “advice” you would greatly limit yourself, and you would probably overpay by a wide margin, too.

There are tons of wonderful and very trustworthy life insurance companies that can offer you a much better deal compared to companies that match that criteria above.

Here are some of the basic and standard policy options that come with most final expense life insurance plans.

The Basics of Final Expense Insurance Policies

Final expense life insurance is a basic form of life insurance that most people between the ages of 50 and 85 can qualify for without having to take a medical exam.

Of course, there are exceptions, depending on the circumstances, but this coverage is available to most people.

Final expense insurance is very common and affordable because policy shoppers want basic life insurance without hassle. Many people who buy this kind of coverage no longer qualify for term life insurance or even other whole life policies.

Some shoppers have pre-existing health conditions that make underwriting for another type of life insurance too complicated.

In short, this kind of coverage is usually affordable because policies are small and simple.

How Does Burial Insurance Work?

Burial insurance or funeral insurance is one of the most basic and affordable forms of life insurance. There is not really any reason not to apply for it.

Most basic plans qualify applicants up to a maximum age limit of 82. Others continue writing new policies for shoppers up to age 85. It is possible, but difficult, to buy new coverage up to age 89.

If you are under the age of 82, are not employed in a dangerous vocation, and you do not have a severe medical ailment or condition, then you qualify for this kind of whole life coverage.

Applicants over the age of 82 may be subject to requests for extra information or medical exam to confirm you don’t have dangerous health issues.

As you can already tell, your current age and your health status are the major determining factors underwriters consider when you apply for coverage.

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Why Do Age and Health Issues Matter So Much?

Life insurance underwriters base premium payments and coverage decisions on your risk of mortality. Statistically speaking, most people die in their late 70s or early 80s.

When you die with a life insurance policy in force, the insurer has to pay your death benefit. So if you bought $50,000 in final expense life insurance coverage last month and then you died next month, your insurance company would owe your loved ones $50,000.

You would have paid only two premium payments so your insurer would be losing quite a bit of money. The best life insurance companies want to avoid this scenario by collecting your premium payments for many years before you die.

They invest your premiums and use the profit to pay other policyholders’ death benefits. If you’re unhealthy and likely to die sooner rather than later, insurance underwriters can deny your coverage or charge more expensive premiums.

Women tend to live longer than men — so women normally pay lower life insurance costs.

Final Expense vs. Traditional Life Insurance

Because of age, health, and other risk factors traditional life insurance — both term life insurance and whole life insurance — stops being available to older shoppers.

Age 65 is often a cut-off for term life insurance. You can understand why. With death benefits in the millions, insurers have too much to lose.

Final expense life insurance policies may top out at $50,000. As you age, you’ll be eligible for lower coverage amounts, down to $10,000. This is good because burial insurance shoppers do not need a $500,000 death benefit anyway. They just need a way to pay for a funeral, a headstone, credit card debt, and the like.

So funeral insurance is tailor-made for the people who need it:

  • Premium payments can be designed to meet your budget, lifestyle and prospective final expense needs. But on average, the younger you are, the cheaper the premium will be.
  • Most final expense life insurance policies offer coverage plans as low as $2,500 and as high as $50,000.
  • Most final expense life insurance plans are a kind of whole life insurance, meaning that premiums are paid throughout the lifetime of the policyholder.

You could find term life variations of final expense life insurance but whole life works better because you can’t outlive whole life coverage as long as you keep paying the premiums.

Limitations of Final Expense Insurance

Most funeral expense life insurance policies come with a two-year contestability period. Notice I did not say waiting period. We’ll get into that more below.

A contestability period means your insurer will contest payment of your death benefit if you die within the first two years of coverage.

If the company found evidence that you’d lied on your application, it could decline paying your claim. For example, if you failed to disclose a serious medical condition or a dangerous job, your company could refuse to pay out the claim.

This is a basic feature on most life insurance policies of any type. If everything turns out OK, the insurer will pay your family as agreed.

Your funeral expense life insurance policy can accrue cash value over time and can be leveraged against a loan by the policyholder. But with such small coverage amounts, the cash normally builds too slowly to become a significant asset.

And, of course, funeral insurance limits your death benefit to $50,000 in most cases. Older applicants in their late 70s or early 80s may be even more limited. Buying more than $25,000 in coverage may not be possible.

If you need more than $50,000 in coverage, consider a guaranteed universal, indexed universal, term life, whole life or any other form of traditional life insurance. All of these policies will cost more, and your age could disqualify you. You’d also need a medical exam.

Guaranteed Issue Insurance Is Not Burial Insurance

Not everybody can qualify for true burial insurance. Serious health conditions could disqualify you. But all hope is not lost.

Guaranteed issue coverage can still help you provide some cash for your family members when you die. Guaranteed issue does not ask many health questions. You could get up to $25,000 in life insurance coverage with no medical exam required.

Guaranteed issue has its drawbacks so unless you can’t qualify for a burial insurance policy with simplified issue underwriting, you should not shop for guaranteed issue coverage.

Limitations of Guaranteed Issue Insurance

  • Waiting Periods: You can get approved today for guaranteed issue, but if you died tomorrow your family members couldn’t file a claim. These policies require at least two years of waiting before your coverage takes full effect. If you died sooner than two years into the policy, your family could claim a refund of your premiums plus interest.
  • Low Coverage Amount: As of this writing, the max you could get in guaranteed issue coverage is $25,000.
  • Higher Premium Payments: Premiums for this $25,000 or less will be more expensive than premiums on a $50,000 burial insurance policy. Why? Because insurers know next-to-nothing about your health. They’re taking a big risk and will charge accordingly.

Despite these limitations, this coverage can give you what you need. You shouldn’t use this option unless you have no other choices.

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Pay Attention When You Shop to Avoid the Wrong Coverage

Insurance providers and agents don’t always share this distinction between burial life and guaranteed issue coverage.

Since final expense insurance or burial insurance is just a marketing term and not an actual type of life insurance, they can make a case that guaranteed issue is burial insurance. Here is a brief example:

A lot of articles online will recommend you consider AARP or Colonial Penn for your final expense coverage.

Both providers are highly rated, well known, and respectable insurance companies. Truthfully, these are all accurate statements.

However, none of those attributes alone mean their insurance will cost less and go into effect sooner. When you buy guaranteed issue from one of these companies you will have to wait for the coverage, and you will pay more — even when it’s sold by a trusted name.

Compared to the cost and accessibility of simplified issue coverage, guaranteed issue will lose every time even when it’s backed by a household name.

Since AARP and Colonial Penn sell guaranteed issue, you can beat their price when you buy true burial life insurance which has simplified issue underwriting.

All the millions they spend on advertising wont change this fact, and these insurance companies know this. They don’t have to change this fact. They just have to convince you they can give you the best deal.

Other reputable providers, such as AIG and Mutual of Omaha, sell both types of insurance products — guaranteed issue and simplified issue burial insurance. You might not know the distinction as a shopper unless you read the fine print or ask the agent point blank: Is this a guaranteed issue policy?

If it is you can find a much better value with simplified issue insurance.

How to Find the Best Insurance Companies for Final Expense Coverage

Now that you know you need to be open to insurance companies that aren’t on TV, the next question is: How do you find them? We are one step ahead of you.

Honestly, this goes back to the original question about how you find the best policy in the first place. The thing you must accept is that you alone can’t find these companies.

Fortunately, there is an easy way. Just ask for help. An independent life insurance agent knows the ins and outs of the highly rated insurance companies — whether they advertise on TV or not and whether they send out mass-market mailings or not.

An independent agent should get to know your specific needs and then match your needs with the insurance company best suited for you.

Other Options

The basic final expense policy isn’t always perfect for everyone. If health is an issue, you may not qualify. If you’re already in your late 70s, you may not want to pay the high premium payments.

And some shoppers find they do not need a final expense policy. They already have money saved for this purpose. Unless they want to leverage the tax-free payout to the advantage of their estate, there’s no reason to pay the premiums.

Let’s discuss those other options.

Using Guaranteed Issue If You Need It

Guaranteed issue takes a lot of lumps, both in this post and elsewhere. But it has its place. Almost every applicant who applies is accepted with no consideration of age or medical status. So if you truly can’t qualify for another type of coverage, guaranteed issue may be for you.

Like I said above, the waiting period would negate your coverage if you died within the first two years of having coverage. Some of these policies grade up your benefits. After the first year, you’d have at least part of the coverage available.

Accidental death is almost always an exception to this limitation. If you died because of an accident during the first two years of coverage, your loved ones could successfully file a claim.

This type of coverage will cost more but it can be money well spent if it provides the peace of mind you seek. At least premium rates are locked-in and do not feature rate increases over time.

The Self-Insurance Option

You could be your own insurance company. By saving up the money you’d need for final expenses and leaving instructions for your heirs to access the money, you’d be self-insured.

Some people like to use both approaches simultaneously. As they save up to fund their own final expenses, they also want a policy in place just in case they die before saving enough money. This is a smart idea. When you reach your savings goal you can cancel the coverage. Or you can keep both and provide even more resources for your loved ones.

If you’d like to self-insure, start early. If you’re 65 you could save $1,000 a year and have $20,000 when you reach age 85. Putting the money in a high yield savings account could speed up the process.

And, remember, the cost of a funeral will only increase over the next 20 years, so save accordingly.

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Pitfalls To Avoid

When you dive into the world of burial insurance, you need to be aware of some traps which are waiting to snare you.

Sadly, some companies will attempt to trick you. Usually, their goal is to sell you an inferior product without you really knowing what you’re getting.

Here are some final expense shopping pitfalls to avoid according to our final expense experts here at LifeInsurancePost and  Choice Mutual.

Burial Insurance Offers By Mail and TV

These plans are typically guaranteed issue life insurance policies whether they say so or not.

They ask no health questions and require no medical checks. This sounds great, but know these plans are not the best value for most folks. The less your insurer knows, the more you’ll pay.

Usually, the vast majority of applicants can get approved for a plan that has lower prices and immediate protection by going with a company that asks health questions.

AARP, Globe Life, & Colonial Penn

All three of these companies are grossly overpriced. There is just no chance that you can’t find a better deal elsewhere. Furthermore, AARP and Globe will attempt to sell you life insurance that expires.

Yes, you read that right.

Their flagship plans expire at a certain age leaving you without protection. Just stay away.

The Incredible Value Of An Independent Agency

When you need legal advice or you are sick who do you turn to for help?

You ask a lawyer or your doctor right? Of course, you do because they are qualified experts in their business.

In a similar fashion, you lean on the expertise of a qualified burial insurance agency to help you find the best final expense policy.

Unless you have time to learn the underwriting tendencies of 30 different companies so you could determine which one is best for you, you need some help.

Funeral expense life insurance is the most basic form of life insurance you can find. Given the stark realities of bankruptcy, debt and the compounded emotional grief that can haunt the family and loved ones of people who don’t prepare for the expenses of death, there is no excuse not to apply for such coverage.

Contact us today to begin the application process for your final expenses. Do it soon, for yourself and for the sake of your family.

We’ll set you up with a reputable company like Transamerica, State Farm, New York Life, AIG, Mutual of Omaha, or another leading provider. We’ll compare life insurance quotes and find the best type of permanent life insurance for you.

Facts About Funerals and Final Expense Insurance

Most people don’t know basic funeral plans almost always cost several thousands of dollars. The National Funeral Directors Association says the average funeral costs about $9,000. Even a cheap option costs about $3,000 to $5,000. It’s not unusual for the final bill to surpass $12,000 or $15,000.

Facts about Funerals

  • When it comes to preparing for a funeral, expenses can include but are not limited to: funeral preparations, funeral arrangements, floral arrangements, food and refreshments, funeral parlor rental, funeral procession, burial preparations, casket with or without options, burial plot and headstone, the burial ceremony and other related expenses.
  • Your family will be grieving your loss and won’t have the energy to figure out how to finance final expenses.
  • Your family could burn through savings or take on debt if left no other option at the end of your life.
  • The threat of bankruptcy and debt can stalk your family for years after your death.

Facts about Funeral Insurance

  • The best policies are whole life simplified issue permanent life insurance plans that never expire and slowly build cash value over time.
  • Your premiums should stay the same for the rest of your life.
  • A term life policy is not a good idea since it could expire before you die.
  • If you don’t answer health questions you’re probably getting guaranteed issue which has waiting periods and more expensive premium payments.
  • Companies that advertise on TV or send offers in the mail probably aren’t your best deal.
  • You can buy pre-need insurance from a funeral home but final expense pays your family, not the funeral home, offering more freedom.

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What to Do After You Buy Final Expense Insurance

When you buy a policy, you’ll choose a beneficiary. This person will receive the money when you die. Your beneficiary should be a trusted adult child, grandchild, niece, nephew, or younger friend. You can always change your beneficiary if yours passes away before you do.

Inform your beneficiary that you’ve bought burial insurance. Make sure he or she knows what type of policy you bought and which company you chose. Write down your policy number and the phone number for the claims department.

You can also leave directions for how to spend the money but keep in mind your beneficiary has the final say. That’s why it’s important to choose someone you can trust to follow your wishes.

Then, it’s time to relax and know you’ve taken steps to ensure your family will have what it needs to pay your final expenses.