Skip to main content

    Final Expense Insurance

    Often overpriced. Sometimes useful.

    The honest reality

    Final expense insurance = small permanent life insurance ($5-25K) marketed to seniors for funeral costs. Average policy: pay $1,500/year, get $10K death benefit. Over 10 years, you pay $15K to leave $10K. Often a BAD financial deal.

    Better alternatives

    • "Pay on Death" bank account — set aside $10-15K. Beneficiary gets at death. NO premiums.
    • Existing life insurance — many already have group life from work / association.
    • Pre-pay funeral home — locks today's prices (with risks — see /tools/funeral-prearrangement).
    • Term life — if under 70 in decent health, term life is cheaper for same coverage.
    • Cremation — direct cremation $700-2,500 vs $10K traditional. Less coverage needed.

    When final expense MIGHT make sense

    • You can't qualify for term life (health).
    • You don't have $10K savings.
    • You can't commit to monthly POD savings.
    • You want guaranteed-issue coverage.
    • For some seniors who otherwise wouldn't plan — better than nothing.

    TV scam warning

    • "Just $9.95/month" TV ads — coverage often $1,000-5,000 only.
    • Premiums increase as you age.
    • Some have 2-year waiting period — NO benefit if die in first 2 years (return of premium only).
    • Read fine print BEFORE signing.

    If you must buy

    • Get 3 quotes — Mutual of Omaha, AARP/NY Life, Globe Life.
    • Compare exact same coverage + waiting period.
    • Pick "level death benefit" (NOT graded).
    • Confirm: NO 2-year waiting period if you can.
    • Buy ONLY what funeral cost likely will be.

    Best plan for most seniors

    Open Pay-on-Death savings account. Save $50-100/month for 5-10 years = $5-15K. Beneficiary inherits tax-free. NO premiums. NO waiting periods. NO commission to salesman. Best math for most seniors.

    Final Expense Insurance Reality | TekSure