What is Final Expenses Insurance?

Malcolm Tatum
Malcolm Tatum

Final expenses insurance is a type of insurance coverage designed to provide financial assistance with settling funeral and other types of end-of-life expenses. A policy of this type can alleviate a great deal of stress on loved ones who are going through the grieving process, since worries about how to pay for a funeral or secure a gravesite are offset by the funds made available by the insurance. While similar in many ways to a traditional life insurance policy, the amount of the coverage is normally much less than a life policy.

Final expenses insurance is meant to help with funeral costs.
Final expenses insurance is meant to help with funeral costs.

Determining the amount of final expenses insurance that is needed involves calculating final expenses in terms of the cost of various items connected with the funeral and interment of the deceased. In order to manage this process, obtaining quotations from local providers on the cost of burial services like caskets, cremation services, and general funeral arrangements are important. Issues such as the cost of securing a gravesite, digging the grave, installing the vault, and purchasing a headstone are also key to determining an adequate amount for the final expenses insurance. Typically, it is a good idea to secure coverage that is roughly 20% more than current costs in order to allow for the possibility of inflation over the years.

Final expenses are associated with funeral expenses, including embalming fees.
Final expenses are associated with funeral expenses, including embalming fees.

When evaluating different contracts for final expenses insurance, it is important to determine if the coverage is considered whole or term. With whole insurance, the benefits are available even if the insured party lives many more years than anticipated. By contrast, if the policy is structured as a form of term insurance, this means that the coverage is only valid until the insured party reaches a certain age. Should the party outlive the policy, then there are no benefits to call upon once the individual passes away.

A casket may be part of a person's final expenses.
A casket may be part of a person's final expenses.

Anyone who has not made arrangements and paid the costs for those arrangements in advance should consider purchase some sort of final expenses coverage. Doing so helps to bring peace of mind to the insured party, who has the benefit of knowing that loved ones will not have to assume out-of-pocket expenses to manage the funeral and burial arrangements. The final expenses insurance also provides some comfort for loved ones, in that they can appreciate this last gesture of love and esteem that the departed granted by creating a resource that can be used to settle those final expenses.

Final expenses insurance can help with the purchase of a headstone.
Final expenses insurance can help with the purchase of a headstone.
Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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