LIFE INSURANCE VS. FINAL EXPENSE
October 1, 2017
You have probably heard of Life Insurance before and have a fair understanding of what it means; you pay an insurer a monthly premium in exchange for financial protection if you were to die unexpectedly. Seems simple enough. But you may have also heard of Final Expense Insurance, which sounds like it’s the same thing but cheaper.
What are the differences between the two, if any? Which is a smarter investment, and for what types of individuals? In the following post, we look at the main differences between the two and provide recommendations of which is the smarter choice for you and your family.
What is Final Expense Insurance?
Final Expense Insurance (sometimes known as Burial Insurance) is designed to help your loved ones pay for bills specifically associated with your death. These bills could be medical expenses, but most commonly are funeral expenditures such as caskets, funeral service, or cremation.
What Are the Main Differences?
While life insurance is meant as an income replacement for your beneficiaries, final expense is intended to be used only to cover your death expenses. Final expense insurance is usually smaller in scope as it focuses on only paying for a certain number of costs, so the premiums for the policy are lower than standard life insurance.
Who Is Final Expense Insurance For?
If you have outlived your term life insurance policy. Or if you won’t need your life insurance policy to provide for your loved ones when you are gone. Then a final expense policy can cover only the funeral costs once you’re gone so your family won’t be stuck paying out of pocket.
Hopefully, you now have a better understanding of the differences between life insurance and final expense insurance. Take a look at your own family’s needs and your expenses. Also make sure to consult with an insurance broker before making a final decision.