Final expense is actually a type of life insurance. So, there is technically no “difference” between the two—there are, however, differences between final expense and other types of life insurance.
What is Life Insurance?
There are multiple types of life insurance. One of the most common types is whole life insurance. You can purchase this policy as old as about 50 years, while you’re in good health. You’ll make monthly premium payments and, as long as you keep up with them, you’ll be covered for the rest of your life. Once you, the policyholder, pass away, a payout, called a death benefit, will be issued to the individual(s) of your choice, called your beneficiaries. You also have access to slowly accruing cash value, which you can use before your death benefit is issued.
Universal life insurance works in a similar way, but with more of an emphasis on growth and cash value. Your policy is permanent, but you may have some flexibility with premium payments depending on your policy’s requirements. More of your premiums will go towards the stock market and investments, so you may see more growth, but they can be more expensive and tricky to navigate.
Finally, term life insurance is the only non-permanent option. You purchase a policy for a term of anywhere from 10 to 30 years. During this time, as long as you make your premiums, you’re covered. You then have the option to renew, find a new policy, or let it lapse. There is no cash value involved with a term life policy, but it is less expensive than other options.
What is Final Expense?
On the other hand, we have final expense. Final expense is actually a type of whole life insurance. This just means that it’s permanent for the rest of your life as long as you keep up with payments.
Final expense is the easiest life insurance policy you can qualify for. Unlike the other options, which limit enrollees to around age 50 to 60 and those with good health, final expense accepts individuals aged 85 with terminal and pre-existing illnesses. Then, like whole life, the death benefit is issued when the policyholder passes away.
The Difference Between Final Expense and Other Life Insurance
You’ve probably already started to see many of the differences between final expense and other life insurance policies. It’s unlike term life because it’s permanent, but unlike all three because it’s easier to qualify for. The death benefit is smaller—between $2,000 and $50,000—than the other policies, with payouts anywhere from $200,000 to $1 million.
Bottom line? Final expense is life insurance. But, it’s unlike other life insurance because it’s easy to qualify for without many of the other complications involved.
Your Final Expense Experts—Call Expense Mutual
Expense Mutual will help you find a final expense policy that works for you. Get a quote or call 888-280-2825.