Is Final Expense Insurance Expensive?

Final expense insurance may cost more than some other life insurance policies, but is still very much affordable and inexpensive.

How to Estimate Final Expense Costs

The cost of final expense is determined by its premium. A premium is a monthly fee that you must pay to keep your coverage active until you pass away. Once you pass, your policy pays out its promised coverage, the death benefit.

The death benefit for final expense is a sum of money ranging from $2,000 to $50,000. There are two different types of final expense policies — simplified issue and guaranteed issue. Simplified issue death benefits tend to offer higher death benefits, while guaranteed issue is often on the lower end.

In this definition, there are two major factors that determine how much you pay for final expense — the death benefit and type of policy. The higher your death benefit, the higher your relative premium. Guaranteed issue also typically costs more than simplified issue because it is incredibly easy to qualify for, allowing people who may be at higher risk to receive coverage.

Other factors are involved, too — age, for instance, plays a big role. Sex, smoking habits, and credit score also determine costs. Location is very important — someone in New York, for instance, will almost assuredly pay more for final expense than someone from, say, Ohio.

How Final Expense Compares to Other Policies

With all of these factors in mind, how do you know how “expensive” final expense is? Let’s compare it to other life insurance options.

Whole life insurance is a similar permanent policy, but is purchased at a much younger age and requires good health to qualify. For those reasons, it costs less than final expense. However, keep in mind that you will be paying premiums for a much longer time than you would for final expense.

Term life insurance is often the cheapest of the life insurance policies. As the name implies, you purchase a policy for a set “term” of 10-30 years, and either renew or end your coverage afterwards. Because it’s not permanent, it costs less than the other options.

With all of this information, keep in mind that the average final expense monthly premium is still only $20-$30 per month. So, final expense is not expensive.

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