How to save on final expense insurance

Why you can trust Insure.com

Quality Verified

At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry.

Planning for end-of-life services and expenses may not be at the top of your to-do list, but it may be more important than you think. Final expense insurance, also known as burial or funeral insurance, can provide financial coverage for funeral services, pay for medical bills and provide your beneficiaries with funds for living expenses, mortgage or rent payments and debts.

Final expense insurance plans are also affordable life insurance policies. According to Insure.com’s analysis, $10,000 face policy plans start at $295 on average annually. Learn more about financial expense insurance plans, including how to save on premiums, find the best coverage for your needs and other cost-saving considerations.

Key Takeaways

Final expense insurance offers funds for funeral expenses and other financial obligations after your death.
Having an end-of-life plan and a solid understanding of your finances is advisable before shopping around for final expense insurance.
Researching, shopping around, talking with insurance experts and investigating other life insurance plans can help you find cost-saving options.

What is final expense insurance?

Final expense insurance is a form of whole life insurance that provides policyholders with funds for funeral expenses, medical bills and other expenses. This type of insurance is often best for seniors, heads of households, individuals on a fixed income and anyone wanting to ensure their loved ones have some financial protection and limited funeral costs.

“Many people have not planned for their final expenses and after they die, not only do their loved ones have to deal with the emotional loss of the death, they often have to struggle to find the financial resources to meet the final expenses,” says Jim Brau, Joel C. Peterson professor of finance at Brigham Young University Marriott School of Business. “As can be imagined, enough trauma of death is experienced by the left-behind family members. … It is an act of love to plan for your final expenses while still alive so you are not a burden when you pass.”

Final expense insurance is a policy that doesn’t expire unless it’s canceled or premiums aren’t paid. Premiums are fixed and don’t increase. However, the policyholder can increase their face amount with a new policy and will likely pay more for premiums.

Shop around for the best rates

As of 2021, the median national amount for a funeral costs about $9,420, including casket, service, viewing and vault, according to the National Funeral Directors Association. While cremation is less — an average of $6,970 — a $10,000 face policy may not sufficiently cover your funeral and existing debts, medical bills or other financial expenses.

Typically, policy face amounts range from $5,000 to $25,000 on average, and premiums can be paid monthly. To determine what policy amount is best for your needs, it can help to get several final expense insurance quotes by contacting multiple final expense insurance companies.

“Shop around and if the final expenses are tied to a whole life policy make sure you are getting a fair deal. Many whole life plans are very expensive and not very flexible, so buyer beware,” Brau said.

Choose the right coverage amount

Know what your final expense costs may be before shopping around. It can help by assessing your end-of-life services: Do you want to be buried or cremated? Do you want a funeral or a burial?

These questions can help you determine what coverage amount may fit your needs. It’s essential to consider your medical expenses, financial situation, beneficiaries and debts.

According to Insure.com’s final expense insurance rate analysis, a $10,000 face policy starts at $295 annually on average for a 45-year-old woman and $343 annually for a 45-year-old man. On average, rates increase by $7-$11 year-over-year (YOY) through age 50.

Rates also increase based on the face policy amount and your age, health and gender. For example, if you’re a 65-year-old man seeking a $25,000 face policy, you could pay an average of $1,734 annually versus $1,326 annually if you’re a woman. This premium is based on age and gender and considers that women tend to live longer than men.

Opt for a simplified issue policy

One type of final expense insurance is simplified issue — a policy that stays active your entire lifetime as long as you pay your premiums. This type of policy doesn’t require policyholders to undergo a medical exam for coverage and has a quick approval turnaround. It’s a good option for individuals who have pre-existing medical conditions or who are unable to get a traditional life insurance policy.

Pay premiums annually

While the annual premium amount may look like a large amount upfront, it’s typically been discounted. This is because insurance companies often offer a small percentage off of an annual one-time payment versus paying monthly.

Before you decide on a policy, crunch the numbers to ensure you can pay a lump sum annually. Typically, insurance companies reduce the annual payment by 3%-5% and their administrative fees for processing your payments, which can save you hundreds of dollars over time.

Consider a smaller benefit amount

When you’re planning your benefit amount, take stock of what you may already have saved toward end-of-life services. This may include your savings, employer life insurance policies, a 401(K) or retirement plan and housing. By considering your overall financial portfolio, you may determine you only need a small face policy, which can save you on annual premium costs.

Review optional riders and add-ons

Understanding your policy can ensure you discuss alternative life insurance options. By opting for riders or other additional life insurance coverage add-ons, you could save on cheaper premiums. While final expense insurance could be ideal for seniors, adding on an endorsement, such as temporary accidental death, to your policy may save you money and better fit your needs.

Maintain good health habits

Final expense insurance premiums are determined by several factors, including your health. If you’re a smoker, older or have pre-existing health issues, you may be looking at a higher annual premium. By looking into final expense insurance as a healthy, nonsmoking 40-year-old man or woman, you will likely be considered a lower risk to ensure through the end of your life. This will help to keep your premiums lower and save you money.

Consider pre-need funeral plans

Pre-planning some of your funeral plans and needs can help save money and provide your loved ones with peace of mind. With a pre-need plan, you can begin planning your funeral services with a funeral home. Through this option, you select what you want and arrange to pay for your funeral in one lump sum or over time.

By determining your end-of-life services and paying for them before your death, you can keep your costs within one price bracket and ensure your loved ones don’t have to handle your burial.

Work with an independent insurance agent

Educating yourself is one of the best ways to save money on final expense insurance. You can start your research online and when you have a good idea of what you’d like your end-of-life funeral and financial plan to be, reach out to an expert (or several). Having an expert provide guidance can help you find cost-saving options – they can suggest ways to find the best plan for your needs and budget.

“After learning everything you can from online sources, if you have an insurance agent you trust, set up an appointment and discuss with them your various options,” Brau says. “Perhaps meet with several insurance agents face-to-face to do as much due diligence as possible prior to committing.”

Bottom line: Saving on final expense insurance

Creating an end-of-life plan is a wise choice. It helps ensure your finances and funeral services are thought through and settled, which can take the burden off of your loved ones. You can find cost-saving options by thoroughly investigating your options — shopping around, getting several final expense quotes, talking through life insurance and add-on options, checking out pre-need plans with a preferred funeral home and estimating what financial need your loved ones may have in your absence.

Remember, final expense insurance policies can be cost-effective, but you may need additional life insurance coverage options or savings to meet your financial and end-of-life needs.

Sources:

Insurance Information Institute. “What is burial insurance?” Accessed August 2023.

National Funeral Association. “2021 NFDA general price list study shows funeral costs not rising as fast as rate of inflation.” Accessed August 2023.

Lincoln Heritage Funeral Advantage. “What’s the difference between a pre-need plan and final expense insurance?” Accessed August 2023.

Quotacy. “Do you pay your life insurance annually or monthly? Does it really matter?” Accessed August 2023.

Zip Code

Please enter valid zip

Age

Coverage Amount

Coverage Type

Gender

Tobacco Use

Yes No

Compare Quotes

Katrina Raenell

Contributing Researcher

Katrina Raenell is a writer, editor and educator with 20 years of experience in content and communications for international organizations, nonprofits and start-ups. In her previous roles, she was a communications manager for study abroad, content project manager for higher education and finance websites, reported on arts and culture, and was a managing editor for an online health and wellness publication.