Final expense insurance is for those of you who are looking for smaller policies to cover final expenses or can’t get coverage through traditional life insurance products.
Final expense insurance can take all the worry out of passing on debts or burial expenses to your loved ones.
…and guess what? It doesn’t cost an arm and leg!
You’re probably going to die with some debt to your name. Most people do.
In fact, 73% of consumers had outstanding debt when they were reported as dead, according to a December 2016 study provided to Credit.com by credit bureau Experian.
These policies are ideal for seniors who want to clean up their affairs for their beneficiaries. Final expense life insurance provides you with some peace of mind, and it’s pretty easy for you to get approval.
Quick Guide / Table of Contents:
- Why Final Expense?
- Top 5 Companies
- Comparing Carriers
- What IS Final Expense?
- Final Expense vs. Burial Insurance
- Final Expense vs. Prepaid Funeral Plans
- What About Guaranteed Acceptance Whole Life Insurance?
- Benefits of Final Expense
- What Does Final Expense Cover?
- Get Quotes
I am thrilled to provide a comprehensive review of the 5 top final expense life insurance companies in the U.S. to help people wade through their options.
If you are seeking final expense life insurance programs, we know how confusing it can be to find the right policy.
These top 5 final expense life insurance companies all have stellar products which are affordable for most budgets.
Not to mention the fact that none of these products require a medical exam.
Why Consider Final Expense Insurance Companies?
In a nutshell, final expense life insurance offers seniors cheap burial insurance. These plans typically offer much lower amounts of life insurance and usually don’t require a medical exam.
But beware, they may ask a few health questions. Final expense insurance for seniors is an excellent choice for those with health problems and those who cannot afford life insurance with a medical exam.
These smaller amounts of life insurance can be used for the following purposes:
- to cover any outstanding personal debts
- pay outstanding medical bills not covered by health insurance
- provide a small financial legacy to surviving family members
- can pay for funeral and burial costs
Who Are the Top 5 Final Expense Insurance Companies?
Gerber is a company that understands how difficult it can be for people over the age of 50 to find low-cost life insurance.
Their answer to this conundrum is Gerber Guaranteed Life.
This amazing company provides a low-cost solution for those seeking small face amounts to cover final expenses.
Let’s look at this plan in more detail.
Ages & Corresponding Coverage
Guaranteed Life Insurance from Gerber Life provides life insurance for adults between 50 – 80 years of age!
The proceeds, which are payable to your beneficiaries, are non-taxable and can be used in any manner your beneficiaries choose.
The premiums are guaranteed to remain level for life and you can choose from coverage amounts between $5,000 – $25,000.
- Please note there is a $15,000 maximum in South Dakota.
The best thing about Gerber Guaranteed Life is that the company offers GUARANTEED ACCEPTANCE REGARDLESS OF HEALTH!
- There is No Medical Exam
- No Health Questions Asked
What Type of Life Insurance Do They Use?
The life insurance coverage provided is whole life insurance which means you are protected for your entire lifespan.
Not only does it provide death benefits, but it also comes with a cash value accumulation feature which builds as it matures.
You can also opt to borrow against the cash value accumulation portion or simply cash it out later in life.
As the name implies, whole life insurance is designed to protect you for your entire life. Premiums are significantly higher than term life policies, not only to compensate for the higher mortality risk in your later years, but because whole life policies accumulate cash value over time. The Motley Fool, Term vs. Whole Life Insurance: Which is Best for You?
Graded Death Benefit for First Two Years
Gerber Guaranteed Life Insurance contains a graded death benefit limitation.
If you pass away in the first two years of the policy for any reason, other than by accident, your beneficiaries will only receive the premiums paid to date plus 10% interest.
After the 2 year period elapses, the full amount of the policy is payable.
So let’s take a look at the accidental death provisions.
As I stated above your beneficiaries will receive the full amount if you die due to an accident.
You must also have had the policy in force for at least 90 days before the accident.
Beware, this period can go up to one year in some states, so be sure to speak with an independent life insurance agent.
So let’s check out Gerber’s official limitations during the first 2 years:
- Intentional self-inflicted injuries or attempts
- Suicide or attempted suicide, while sane or insane
- Act of war
- Active participation in a riot or civil disorder
- Extra-hazardous activities: including parasailing, bungee jumping, heli-skiing, base jumping, para-kiting, sail-gliding, scuba diving deeper than 130 feet; spelunking, or mountaineering/rock climbing
- Military service
- Alcohol intoxication above the legal limits in the jurisdiction where the accident occurs.
- Intoxication by or under the influence of any controlled substance or narcotic, unless prescribed by a physician, or any non-prescription drug unless taken as directed.
- Deliberate ingestion of poison, fume, noxious chemical substance or gas.
- Commission of or attempt to commit a felony or engage in an illegal occupation
- Specialized aviation activity (other than a fare-paying passenger on a commercial airline)
- Sickness or disease, except for infection resulting from an accidental cut or wound
Not bad at all! This is why we are touting Gerber as one of our top 5 final expense life insurance companies!
NOTE: Death as a result of suicide will have the same provisions as the 2 year waiting period requirements. Just remember all of these provisions change from state to state. Please don’t forget to speak to an independent life insurance agent. We can walk you through all the details.
American General (AIG)
American General is an established life insurer with a strong financial rating.
I selected them as one of the top final expense life insurance companies because they have a comprehensive offering that will help your beneficiaries take care of:
- Medical Bills
- Credit Card Debts
- Funeral Costs
- Estate Taxes or Provide Financial Liquidity
The American General Guaranteed Issue Whole Life Plan is for those who are 50 – 85 years of age.
This good news is, this policy does not require a medical exm or ask any health questions.
This means that your approval is GUARANTEED regardless of your current health!
NOTE: American General is not licensed to operate in New York State so this policy is not available there.
Ages & Corresponding Coverage
Under this plan, you can provide your family with coverage ranging from $5,000 – $25,000.
All premiums are guaranteed and will not increase for the life of the policy.
Coverage is also guaranteed to remain the same and will never decrease since this plan is also a whole life policy.
Whole life comes with a cash value accumulation feature which grows over the lifespan of the policy which can be borrowed against or when used when you surrender the policy.
Graded Death Benefit for the First 2 Years
This policy offers graded death benefits.
Should you die within the first 2 years of the policy being in force, your beneficiaries will receive 110% of the premiums paid up to your last premium payment.
You won’t get full benefits until after the 2 year period has passed.
However, should death occur as a result of an accident, your family will receive full benefits.
This plan also includes Living Benefits at NO EXTRA COST!
Additional living benefits at no extra cost
The following situations are covered:
Chronic Illness: American General returns all premiums paid if you’re unable to perform 2 of the 6 basic daily activities.
This section also applies if you have received a diagnosis of a “severe cognitive impairment” which includes dementia or Alzheimer’s disease.
Terminal Illness: American General provides 50% of your death benefits should a terminal illness be diagnosed by your doctor.
Death must reasonably be expected to occur within 24 months of the terminal diagnosis.
These policy provisions are why American General makes the grade as one of the Top 5 final expense life Insurance companies!
Let’s take a closer look at another low-cost final expense life insurance solution.
Phoenix Life Insurance Company is also considered one of the top-rated life insurers in the U.S.
The Phoenix Remembrance Life Plan is also known as a “simplified issue” whole life insurance and provides lifetime coverage.
As a form of permanent life insurance, this plan provides death benefits and a cash value accumulation feature which grows through the life of the policy.
Ages & Corresponding Coverage
Unlike many other life insurance final expense plans, Phoenix offers coverage to much younger individuals for higher face amounts that include:
- 30 – 59 Years of Age: $10,000 – $100,000 Policy Amount Coverage
- 60 – 69 Years of Age: $10,000 – $75,000 Policy Amount Coverage
- 70 – 80 Years of Age: $10,000 – $50,000 Policy Amount Coverage
NOTE: Issue ages are last birthday. Phoenix also offers Non-Tobacco (Preferred) or Tobacco (Standard) risk classes.
Death Benefit Payment Options
Phoenix final expense insurance allows you to choose how your beneficiaries can access the death benefits.
This includes both the lump sum and monthly payment options.
These choices are available through the Additional Income Rider.
Additional Riders At No Extra Cost
At no extra cost or increase in premiums, the plan offers 2 additional riders which include:
- Accidental Death Benefit Rider
- Accelerated Death Benefit Riders
Accidental Death Benefit Rider
Will pay an additional lump sum death benefit, the equivalent of 100% of the face value of the policy, if death occurs by a covered accident.
Accelerated Death Benefit Riders
Two accelerated death benefit riders are included at no extra cost:
- Terminal Illness Rider: You can access up to 95% of the death benefit coverage should you receive a diagnosis of a terminal illness and have life expectancy of 12 months or less.
- Critical Illness Rider: You can access up to 95% of death benefit coverage if you receive a diagnosis of a specific critical illness that includes the following – heart attack, cancer, stroke, kidney failure, ALS or major organ transplant.
These riders contain the following provisions:
- Your licensed doctor must provide a written and certified diagnosis.
- No waiting period applies to these riders.
- The minimum acceleration amount is $1,000.
- Using these riders is optional.
- The policy death benefit is reduced by the benefit amount accelerated. The actual amount paid is discounted based on your condition and life expectancy.
- Multiple benefit election access is available but there is a minimum 180 day waiting period between elections.
Phoenix Life also allows you to select additional coverage riders. This options will cost you more. Let’s take a look at them now:
- Legacy Rider: This is a way to provide birthday gift money for up to five children and grandchildren
- Education Rider: Provide up to 4 annual education payments for children between 18-22 years of age. The only requirement is that proof of university enrollment and attendance must be provided to receive payment.
- Accidental Death Rider: Your beneficiaries will be paid 100% of the death benefit if you die in an accident.
Premiums can be paid monthly, quarterly, semi-annually and annually.
Just remember, the more time you take to make payments the more expensive your premiums are!
Mutual of Omaha
Mutual of Omaha is a Fortune 500 company which was founded in 1909.
Their final expense life insurance solution is known as “Living Promise” and offers 2 Whole Life insurance policies:
- Level Benefit Plan
- Graded Benefit Plan
Let’s review their 2 final expense plans to find out why they made into my list of the top 5 final expense life insurance companies now!
Please note, no medical exam is required for either of these policies.
Additionally, there are several excellent riders designed to complement this product.
Premiums will not increase during the life of either policy.
Let’s look at what these two plans offer when it comes to final expenses.
The Level Benefit Plan
The Level Benefit Plan offers coverage for clients from ages 45-85.
It also provides a good amount of coverage.
Face value ranges from $2,000 – $40,000.
Please note in the state of WA coverage ranges from $5,000 – $40,000.
This policy also provides Accelerated Death Benefit for Terminal Illness or Nursing Home Confinement.
This allows the policy owner to access a one-time election to the accelerated death benefit.
You have to be diagnosed by a certified doctor with a terminal illness.
Death has to be expected to occur within 12 months.
This is a great addition if you happen to get sick and need funds to pay for medical treatment.
You can also choose to add the optional Accidental Death Benefit Rider.
Graded Benefit Plan
The Graded Benefit Plan offers coverage for clients ages 45-80.
Please note that coverage starts later and ends earlier in NY: ages 50-75.
Policy coverage is not as high, with face value ranging from $2,000 – $20,000.
The state of WA is different however and coverage ranges from $5000 – $20,000.
Graded death benefit means that if the policyholder dies of natural causes (any cause other than an accident) during the first two years the beneficiaries will receive all premiums paid plus 10 percent.
Full benefits are paid should the policyholder survive for 2 years, no matter what the cause of death.
Foresters unique and innovative Final Expense Plan offers 3 different types of Whole Life Insurance.
Whole Life is a form of permanent life insurance which provides both death benefits and a cash value accumulation feature.
Under all 3 plans, you can access the cash value accumulation portion on “full surrender” of the policy.
Take a look to find out why Foresters is listed as one of my picks for the top 5 final expense life insurance companies.
How Premiums Will Be Calculated & Paid
Premiums for these policies are based on age, gender, and tobacco use.
Underwriting classifications are available for both Non-Tobacco and Tobacco use.
For qualification, a three-part series of medical questions will be asked.
To qualify for the Level Plan you must answer no to each question.
You may still qualify for either the Modified or Graded Plan, but the applicant must also be within the height and weight guidelines.
You have four premium options that include: monthly, quarterly, and semi-annually and annually.
The 3 Types of Coverage Available
Level Benefit Plan
- Minimum premiums less than $10.00 per month
- Issued age: 50 – 85 at last birthday
- Medical Questionnaire Required
- Coverage to age 121
Graded Benefit Plan
- If you die in years 1 & 2, based on the greater of: Return of Premium (ROP) plus 4.5% annual interest
- The 1st year: 30% of the face amount in effect
- 2nd Year: 70% of the face amount in effect
- In Years 3+ – 100% of the face amount in effect
- Issued Age: 50 – 85 at least birthday
- Medical Questionnaire Required
- Coverage to age 121
Modified Benefit Plan
- If you die in year 1 you receive: ROP plus 10% annual interest
- In year 2 – ROP plus 10% annual interest
In year 3+ – 100% of the face amount in effect
- Issued Age: 50 – 80 at last birthday
- Medical Questionnaire Required
- Coverage to age 121
Foresters Level Benefit Plan
The Foresters Level Benefit Plan is a whole life policy that provides coverage until age 121 with level premiums. All Foresters PlanRight policies require you to answer medical questions.
The death benefits available are fairly comprehensive and face values are as follows:
- Ages 50 – 80 Years of Age: $2,000 – $35,000
- Ages 81 – 85 Years of Age: $2,000 – $15,000
This policy provides 2 types of life insurance riders for additional protection:
- Accidental Death Rider available (issue ages 50-80)
- Common Carrier Accidental Death Rider (this is included at no additional cost)
Foresters Graded Benefit Plan
The Foresters Graded Benefit Plan is a whole life policy provides coverage until age 121 with level premiums. All Foresters PlanRight policies require you to answer medical questions.
The death benefits available are slightly less than the level plan. Let’s check ’em out now!
- Ages 50 – 80 Years of Age: $2,000 – $20,000
- Ages 81 – 85 Years of Age: $2,000 – $10,000
The Accidental Death Benefit Rider is not available for the graded plan but the Common Carrier Accidental Death rider is included at no additional cost.
Foresters Modified Benefit Plan
The Foresters Modified Benefit Plan is a whole life policy provides coverage until age 121 with level premiums.
All Foresters PlanRight policies require you to answer medical questions.
The death benefits available are less than the level and graded plans. Take a look!
- Ages 50 – 80 Years of Age: $2,000 – $15,000
- Ages 81 – 85 Years of Age: Not Applicable
This policy also has riders you can add: The Accidental Death Rider is not available for this plan but the Common Carrier Accidental Death Rider is included at no additional cost!
Comparing Final Expense Insurance Carriers
- All Ratings are provided by AM Best and all approval times are based on the best case scenario, times can change if additional health information is needed.
|Carrier||Rating||Approval Time||Coverage Options|
|Gerber Life Insurance Company||A (Excellent)||1 Day||$5,000 - $25,000|
|Phoenix Life Insurance||B (Fair)||3 Days||$10,000 - $100K|
|AIG||A (Excellent)||2 Days||$5,000 - $25,000|
|Mutual of Omaha||A+ (Superior)||1 Day||$2,000 - $40,000|
|Foresters Financial||A (Excellent)||2 Days||$2,000 - $35,000|
What Is Final Expense Insurance?
Final Expense Insurance is a type of whole life insurance that was created to focus on giving people between the ages of 50 to 85 an easier and more affordable opportunity to get coverage.
Usually these policies offer ranges of $2,000 up to $25,000 in coverage; however, there are some that can go higher.
These policies will work just like a traditional whole life policy and usually build some cash value.
Although, we don’t recommend using the cash value for this type of policy.
These policies are much easier to get an approval for and usually have the following below outcomes:
A standard approval rating is the best health rating you can receive and is going to give you the best price when applying for a final expense policy.
As we stated above, these policies are no medical exam, and some even offer no phone interview, so the highest rating they start with is Standard. A standard policy will not have any waiting periods tied to it.
A sub-standard approval rating is the second best health rating you can receive. It will be more expensive than standard; however, it won’t require a waiting period.
You usually find yourself getting a sub-standard rating if you have diabetes that is insulin dependent or if you are on multiple medications for one condition.
It’s going to be based on the underwriting guideline for each company so be sure to ask your agent how each insurance company will underwrite for each condition.
Graded, Modified, Guaranteed Issue
These three outcomes are all the same. They are going to be the least favorable option and will come with a waiting period.
Traditionally these policies are going to be the most expensive outcome as well. Policies that have any of those words like graded, modified, or guaranteed issue means there isn’t any underwriting done, and you can get approved for almost any condition.
Final Expense Insurance vs. Burial Insurance
When you start searching online for final expense insurance, you might get a bit confused by the difference between Final Expense Insurance & Burial Insurance. Well, you’re in luck.
These two products are the same thing, just called something different. Like how up in the north people say “Pop” but in the south, they say “Soda,” two different words that mean the same thing.
If you read something about final expense insurance, you can take it as being the same for burial insurance.
Final Expense Insurance vs. Prepaid Funeral Plans
I want to also address the difference between these two often confused types of plans. Final Expense Insurance is insurance for your final expenses or burial.
A prepaid funeral plan is a payment plan you set up directly with a funeral home for your burial. Usually, the funeral home will put your payment in a trust that triggers payment when you pass away.
This may be a great option if you are going to pay for the full burial and trust the home won’t be going out of business anytime soon. If you are going to require payment plans, we don’t recommend this type of product at all because a life insurance policy would be better.
For example: If you have a burial that is going to cost $8,000 and you are on a prepaid funeral payment plan of $1,000 a year it will take eight years to pay for the funeral. What happens if you pass away two months or 2 years later, what will your family do with $166.00 or $2,000?
It still wouldn’t cover your final expenses and your family would have to come up with the rest of the money. With a final expense policy, your family would have been covered for the full amount and still had money left over to cover any additional final expenses.
As you can see; prepaid burial plans aren’t going to be the best option for most people.
What Is Guaranteed Acceptance Whole Life Insurance?
Guaranteed Acceptance Whole Life Insurance, also known as a Graded Death Benefit Policy, is a type of whole life insurance policy with no health questions and no medical exam. Your approval is guaranteed; however, there is a catch to it.
Your benefits usually won’t kick in until you have had the policy for 2 or, on some occasions three years. Usually, you will see guaranteed life insurance for seniors, the reason for this is because there are no health questions and for most seniors, this is the only type of insurance they qualify for.
It’s mainly a no questions asked life insurance policy. If you have any of the below conditions then this is probably the best option for you:
- Insulin Dependent Diabetes
- Lou Gehrig’s Disease (ALS)
- Alzheimer’s Disease
- Heart Attack
- Internal Cancer
- HIV Positive
What Are The Benefits of Final Expense Life Insurance?
Final Expense Insurance has some great benefits that make them perfect for people on a budget, with a few health issues and who need coverage fast.
Easy Underwriting Guidelines
Final Expense Insurance is going to have the most lenient underwriting requirements and the most direct underwriting approvals.
This is why it’s important to deal with a broker and let them shop multiple carriers for you.
One carrier might say High Blood Pressure & Diabetes is a Sub-Standard rate, while another one might say it’s a Standard rate.
Below is just a sample of how simple and straight forward an underwriting guideline for most final expense carriers looks.
Sample Underwriting Outcome Guide
|Medical Condition||Probable Underwriting Outcome|
|Diabetes - Non Insulin||Standard|
|Diabetes - Insulin||Sub-Standard|
|Heart Valve Surgery||Graded Benefit|
|Heart Attack - Within 2 Years||Decline|
|Heart Attack 2 - 10 Years||Sub-Standard|
|Heart Attack - > Than 10 Years||Standard|
|High Blood Pressure||Standard|
You still have some conditions that can’t be covered.
- This is just a sample table of underwriting outcomes, keep in mind that you would need to speak with an agent to get the specifics for each company.
If you looked at the above chart you can see that underwriting can be based on specific stages of a condition you may have and that final expense policies can cover an assortment of conditions.
However, if you deal with an agent, your chances of getting covered for a specific condition are much higher.
Unlike most insurance products, final expense insurance has super fast approval times, most of them can be instant if you complete a telephone interview and you can have your policy as soon as 7 to 10 business days in the mail.
It can also take up to 2 days to get an approval if additional information is needed.
However, I have never seen a final expense case take more than a week to get an approval or a decline.
You will know really fast.
If you are getting a guaranteed issue policy, depending on the carrier, nothing more is needed for your approval than your basic information and payment.
If getting approved fast is important for you then final expense insurance will be right up your alley.
Quick Claims Payout
Another benefit you will get from final expense insurance companies is their ability to pay out on the claims very fast.
I have seen carriers payout as fast as 5 days.
This is extremely fast from the time a claim is filed to when a check is in the mail.
The one situation you don’t want your family to have is a long claims paying process.
If you pass away, you want them to have the fastest access available to funds and a final expense policy will outpace any type of insurance product when it comes to paying out a claim.
Coverage Will Never Decrease
No matter what happens to you, after you are covered, the policy amount will never decrease.
There are some policies that decrease over time, known as decreasing term policies.
These policies decrease in the coverage amount over time and at the end of the policy, you will have little to no coverage.
There were also policies in the past that would lower your coverage amount as you aged or if you became sicker.
Most of these policies don’t exist anymore, however, it’s always best to re-confirm this with your agent.
This means that if you purchase a $25,000 final expense policy, it will always be worth $25,000.
Rates are Locked In
Another benefit about Final expense life insurance is that your rates are locked in.
Having your rates locked in is a great benefit, especially for anyone that’s on a fixed budget.
If you are currently receiving SSI or SSDI, any dramatic change to your expenses could mean that you have to cut things our or you might no longer be able to afford you insurance at all.
Getting into something that is fixed can assure that once you budget for your premiums, you never have to worry about the rates changing.
Having the peace of mind with locked in rates is one of the best benefits that a final expense insurance policy offers.
What Are The Drawbacks Of Final Expense Insurance?
Graded Benefit Period
One of the benefits that people most try to avoid when searching for final expense insurance is the waiting periods.
Depending on your condition, you may be able to avoid a waiting period altogether.
However, be mindful that if you have a major condition like Dementia or Alzheimer’s, you are probably going to be looking at that waiting period.
Paying For A Final Expense Policy With Direct Express
The Direct Express® card is a prepaid debit card offered to federal benefit recipients who receive their benefits electronically.
This means that all Social Security Retirement and Supplemental Security Income will come to this card.
This helps you avoid receiving your benefits late and also allows you to keep your bills from being late.
How Much Does Final Expense Insurance Cost?
The cost of final expense insurance is going to vary based on the insurance company and your current health condition.
Below are some monthly sample rates:
|55||$21.80||$ 38.23||$ 54.65||$71.08||$87.51|
|60||$24.91||$ 44.45||$ 64.00||$ 83.54||$ 103.08|
|75||$ 54.92||$1 04.46||$154.01||$203.56||$253.11|
- Rates based on a male with standard health and no tobacco use.
What Costs Does A Final Expense Policy Cover?
Here is a reasonable “ballpark” estimate of the main funeral costs.
It’s important to notes that funeral prices vary considerably between funeral homes and geographic areas of the country.
According to Parting.com, below are average fees for the:
- Funeral director’s services: $1,500
- cost for a casket: $2,300
- embalming: $500
- cost for using the funeral home for the actual funeral service: $500
- cost of a gravesite: $1,000
- cost to dig the grave: $600
- cost of a grave liner or outer burial container: $1,000
- cost of a headstone: $1,500
If you add all of this up, it will come out to around $8,900 only for the funeral.
Hopefully, you can understand why it’s very important to have some sort of coverage when it comes to your burial.
Final Expense Insurance Quotes
So, as you can see there is a whole host of options available for you!
This is why I decided to post an article about my top 5 choices for final expense life insurance companies.
Before you sign on the dotted line, you need to contact us so that we can go through these companies with you in greater detail.
If you have read any of my articles you know that not all companies are created equally.
We can help you select the insurer that works best for your personal circumstances.
This can save time and SERIOUS money.
We can walk you through the top final expense life insurance companies so you can see with your own eyes which one works best for you and your family.
There really is nothing better than protecting your loved ones from having to deal with your debt and funeral expenses.
Trust me, these things add up and you want to make sure you don’t encumber your family with obligations they didn’t incur.*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.