Why it matters
- Funerals are typically a large expense. Final expense insurance could prevent your loved ones from having to shoulder this financial burden.
- Final expense insurance is often more affordable than traditional life insurance because it typically has lower coverage or face amounts and lower premiums. By contrast, traditional life insurance generally has higher face amounts and higher premiums.
- Social Security provides just $255 as a one-time death benefit.1 So understanding the final expenses your loved ones may face can help you plan ahead to ensure they can address funeral costs when the time comes.
It's only natural to want to help our loved ones whenever we can. Though when it comes to what happens shortly after our passing — the arrangements that will have to be made for our burial or cremation — most people would rather not have to think about it. Unfortunately, you can’t ignore important financial decisions like these, and it’s better to deal with them sooner than later.
In 2023, the median cost of a funeral with a viewing and burial was $8,300 (the latest data available).The median cost with cremation was $6,280.2 Even if your estate has the funds to pay for the arrangements you’d like, that money likely won’t get to your beneficiaries for several months.3 That’s where final expense life insurance can step in. It’s an easily accessible way to make sure you and your family are covered for the expenses that arise after your passing.
What is final expense life insurance?
Essentially, it’s a type of whole life insurance with smaller face amounts (the amount your loved ones will receive if you pass away, also known as the death benefit)— usually $40,000 or less in coverage4, though a few insurers may offer up to $50,000 in coverage.5 You might even hear these policies referred to as “burial insurance” or “funeral insurance,” since the idea is to use the death benefit to pay for end-of-life arrangements. In reality, there aren’t any restrictions on how the death benefit can be spent.5
This type of life insurance tends to be easier to qualify for than others.4 In most cases, final expense life insurance policies don’t require medical exams, so they can be a good option for someone with a pre-existing condition who can’t qualify for other types of life insurance.5 And since these are smaller face amounts, the monthly premiums are also less expensive relative to policies with larger death benefits.5
What does final expense insurance cover?
While this type of insurance is designed to cover the costs associated with a person’s death — caskets, cremations, receptions, burial costs, etc. — the death benefit can truly be spent on anything. There aren’t any rules mandating what the money must cover, so the beneficiary is free to use it for mortgage payments, taxes, medical bills, savings, college tuition, or anything else.6
What are the benefits of final expense insurance?
Final expense life insurance is easy to qualify for and ensures your loved ones have the money they need to cover the costs of your passing.
No medical exam
In most cases, there’s no medical exam required for a final expense insurance policy, nor will the insurer need to go through your medical records.5,6 That means it’s usually quick and easy to be approved for these policies. At most, you may need to fill out a health questionnaire, depending on the provider and type of policy.5
Guaranteed death benefit
Final expense life insurance is a type of whole life insurance, so as long as the premiums are paid on the policy, the death benefit is guaranteed.7 And its value can’t decrease, unless the policy’s cash value has been borrowed against.7 Your beneficiary also won’t have to pay federal income taxes on the death benefit once they receive it.7
To wrap up, speak with your financial professional if you’re concerned about making sure your loved ones will be able to pay for your final arrangements and other expenses after your passing. With a final expense life insurance policy, you can have the peace of mind of knowing that you’re providing them a level of financial stability they can count on. And they’ll likely appreciate the thoughtful way you planned ahead on their behalf.
Things to consider
- Speak with your financial professional to understand how final expense insurance could benefit you and your loved ones.
- Explore how much final expense life insurance coverage you might need by researching the cost of a funeral and related expenses in your area to set a realistic target amount for your specific needs.
- Compare multiple final expense insurance policy options, paying close attention to waiting periods, premium costs, and other coverage limitations and exclusions that could impact your beneficiaries.
1 “Survivors Benefits,” SSA.gov, January 2024
2 “Statistics,” National Funeral Directors Association, September 2024
3 “How Long Does Probate Take?” Inheritance Funding, accessed February 2025
4 “How to Choose Life Insurance,” Investopedia, January 2025
5 “How to Use Burial Insurance to Pay for Final Expenses,” Nerdwallet, April 2024
6 “The best burial insurance companies in 2025,” CNBC, January 2025
7 “Final Expense Life Insurance: How It Works, Benefits & Whether You Should Buy,” MoneyGeek, November 2024
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical or financial advice or guidance. Please consult your personal independent professionals for answers to your specific questions.
