Final Expense vs. Term Life Insurance

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Final expense insurance and term life insurance are both low-cost insurance coverages. However, there are key differences between the two insurance policies you should know.

Term Life Insurance

Term life insurance is also known as temporary life insurance. It is a type of life insurance that pays out a stated death benefit if the policyholder dies during a specified period. Term life insurance lasts for a specific term, such as ten years, 15 years, or 30 years. If the term expires, the policyholder can renew it for another term, terminate the policy, or convert it to permanent coverage.

After you purchase a term life insurance policy, the insurance company will fix the premium based on the payout amount and your age, gender, and health. The insurance company may also require a medical exam and details about your driving record, smoking status, occupation, hobbies, and family history.

If the policyholder dies during the policy term, the insurer will pay out a death benefit to the beneficiaries listed on the policy. However, if the policy expires before the policyholder’s death, then there will be no payout. It is possible to renew term life policies after they expire, but the insurer will recalculate the premiums based on the age at the time of the renewal. 

Final Expense Insurance

Final expense insurance, sometimes referred to as burial insurance, is a type of permanent life insurance coverage designed to cover end-of-life expenses such as funeral arrangements, medical bills, or other expenses incurred by the policyholder. This coverage ensures the beneficiaries are not burdened with the policyholder’s final expenses. 


Since final expense insurance is designed to cover end-of-life expenses, it is more suitable for older people and those with health conditions. However, term life insurance is suitable for younger individuals as it is cheaper if you purchase one at a younger age. It can also be ideal for people with young children to ensure they can get financial help in case of the policyholder’s passing.


Final expense plans also do not require a medical exam, making them easier to be approved for than term life. And since these plans are permanent, they will not end after a certain period of time has passed. However, since these plans offer near-certain approval to those who apply, this makes the insured risk higher for the insurance company and the death benefit lower.

Want to Learn More? Give Us a Call

Expense Mutual is here to help you find a policy that works for you and your loved ones. If you’re interested in learning more about your term life or final expense options, reach out to us today!