Final Expense vs. Preneed Insurance

As the time for funeral planning draws closer, you may be debating as to whether you need final expense or preneed insurance. While used for similar purposes, they each have features that make them distinct from one another. The right one for you depends on priorities and circumstances.

How Are Final Expense And Preneed Insurance Similar?

Final expense and preneed insurance are both:

  • Permanent; no need to renew or worry about the policy expiring
  • Provide a death benefit
  • Capable of covering all funeral expenses so loved ones won’t have to
  • Able to be obtained without needing to undergo a medical exam beforehand
  • Easy to acquire – even for those who have trouble qualifying for other types of insurance policies

In the sense of covering funeral costs, both are viable choices. However, everyone has different goals with insurance, and it’s the differences that make one a better fit than the other.

How Is Final Expense Different?

Final expense disburses funds to your loved ones. The common motive is covering funeral costs, but its use isn’t limited to that. In fact, your loved ones don’t have to use it to cover funeral costs at all. They can use the funds to cover personal debts or pay for a much-needed vacation. 

Death benefits aren’t limited to your overall funeral expenses. Some policies can pay out up to $50,000, which can cover both funerals and any other expenses.

Its enrollment process varies by type. Simplified issue policies require answering a medical questionnaire, whereas guaranteed issue policies don’t have any medical underwriting at all.

What Makes Preneed Insurance Different?

Preneed insurance solely lists the funeral home as the beneficiary. Your loved ones won’t receive a death benefit. Instead, this works more like a contract with the funeral home.

With preneed insurance, you’re also planning your funeral details with the funeral home. Your loved ones won’t have to do any funeral planning themselves, or debate on costs. Everything is done in advance.

However, the death benefit is only enough to cover funeral expenses and nothing else. This is also assuming your funeral home will not change ownership or go out of business. If either happens, your preneed insurance may not transfer, and the premiums paid up to that point will be a sunk cost.

Contact Us Today For The Best Policy

At Expense Mutual, you won’t have to worry about weighing options. We will do that for you, and get you a policy that is perfect for your needs and preferences. Learn more about why final expense could be right for you by calling us today at 470-761-4652.

Give Your Loved Ones Peace Of Mind​

At Expense Mutual we want you to be able to take care of the ones who mean the most to you. Call us today at 888-280-2825.