Final Expense Insurance vs. Life Insurance

How final expense insurance works

Final expense insurance is a small permanent plan designed to help cover expenses like funeral costs and medical bills. Death benefits are smaller than traditional whole life insurance policies, but premiums are often lower than other policies.¹ This policy may not have a medical exam – you only have to answer a few medical questions on the application. You also get coverage for life and can build cash value. Therefore, a final expense insurance policy can help prevent your loved ones from experiencing financial stress while they grieve. Aflac offers final expense whole life insurance that can you can apply for to get coverage.

Differences between final expense insurance and other life insurance policies

Here are some key differences between final expense insurance and other life insurance policies:

Coverage amount

Final expense death benefits tend to range between $5,000 and $25,000.¹ According to the National Funeral Directors Association, the median cost of a funeral, with viewing and burial, was nearly $8,000 in 2021.² Therefore, a final expense policy may help cover most of your funeral costs. You could also get a larger death benefit to help with other expenses.

Other life insurance policies typically come with larger death benefits. With a traditional life insurance policy, a rule of thumb is to get coverage worth 10 times your salary.³

Premiums

Final expense insurance tends to offer lower premiums since the death benefit is smaller. A 50-year-old male could get $10,000 of coverage for an average of $47 per month, and a 50-year-old female can qualify for premiums starting at $34 per month for the same amount of coverage.¹ This helps reduce the cost of life insurance without giving up lifelong coverage. Since traditional life insurance policies offer a larger death benefit amount, they often come with higher premiums.

Coverage lengths

Final expense insurance coverage lasts for your entire life. That means you can purchase a policy early on to lock in the lowest premiums and maximize the time you have to build wealth through cash value. Term life insurance offers temporary coverage, meaning your policy will eventually expire.

Policy’s purpose

Many traditional life insurance policies are designed to help with loss of income, pay off debts, help cover your children’s education, and save for emergencies. Final expense insurance has a smaller death benefit because it's designed specifically for end-of-life expenses, such as funeral costs.

Which type of life insurance is right for me?

Consider the following factors when picking a policy type:

• Your loved ones' financial needs: If your loved ones will need help with your loss of income or need help paying off debts after your passing, whole or term life insurance may suit you better. But if they’ll only need help paying for a funeral, a final expense insurance policy may be the better option.
• Your budget: If you need to minimize life insurance costs and you’re fine with a smaller death benefit, a final expense plan can be a great option.
• Your own financial goals: Final expense insurance’s wealth-building potential is in between term and permanent life insurance. It typically offers cash value, but it grows slower than whole life insurance because your premiums are lower. So, it’s smart to consider your financial goals and how much cash value you want to build when deciding on a policy.

Get a quote for Aflac life insurance

Traditional life insurance policies, like term and whole life insurance, are more enhanced in nature. They can help your family with the loss of your income and help pay off any debts while saving for the future. These policies may work better if you’re the primary wage earner or want to leave more wealth to your heirs.

Final expense insurance has a more specific purpose, helping your loved ones cover end-of-life costs without debt or financial strain. If your family is financially stable but needs help covering these costs, final expense insurance can allow them to receive the funds they need after your passing.

Now that you know the differences between final expense insurance and traditional life insurance policies, you may be considering your options. Aflac can help you choose which policy is right for you — whether that’s final expense insurance or another life insurance policy. Start chatting with an agent today to learn more and get a quote.