Pros and Cons of Final Expense Insurance: Is It the Right Choice for You?

*Updated December 1st, 2025

Ensuring your family is financially protected after your passing requires careful planning. Final expense insurance is often marketed as an accessible and affordable solution for covering funeral costs and other end-of-life expenses. However, with smaller death benefit amounts and higher premiums per dollar of coverage, it’s important to assess whether this type of insurance truly meets your needs. In this guide, we’ll provide a clear analysis of final expense insurance, its advantages and drawbacks, and potential alternatives to consider alongside other life insurance options.

What Is Final Expense Insurance?

Final expense insurance, also known as burial insurance or funeral insurance, is a type of whole life insurance designed to cover final expenses and other end-of-life expenses. It provides a relatively small death benefit, typically ranging from $5,000 to $50,000, which is intended to cover funeral costs, burial and cremation, medical bills, and minor outstanding debts. Unlike larger traditional life insurance policies that focus on income replacement and long-term financial planning, final expense life insurance is specifically structured to provide immediate financial relief to your beneficiary or beneficiaries.

Because it’s a type of life insurance, a final expense insurance plan also falls under the category of permanent life insurance, meaning it stays in force for your lifetime as long as you pay the premiums.

How It Differs from Traditional Life Insurance

Final expense insurance shares some similarities with whole life insurance, but it has key differences compared to more traditional life insurance policies, such as term life insurance or higher-value whole life insurance.

Compared with traditional life insurance policies, final expense policies are not meant to replace income or fund major long-term goals. Instead, final expense insurance is designed to handle funeral costs and other end-of-life obligations so your family doesn’t face a large financial burden when planning your final arrangements.

Who Typically Buys Final Expense Insurance?

This type of life insurance is designed for individuals who:

• Are between 50 and 85 years old and need a policy to cover funeral costs and burial expenses.

• Have pre-existing medical conditions that make it difficult to qualify for traditional life insurance.

• Lack savings to pay for end-of-life expenses such as the costs of your funeral, medical bills, or small debts.

• Do not need a large death benefit but want to ease the financial burden on loved ones.

• Want a simple, hassle-free application process with final expense insurance policies that may not require a medical exam.

Since final expense insurance may be easier to qualify for, it is especially attractive to a senior who has limited savings or no other life insurance coverage in place.

Types of Final Expense Insurance & Coverage Details

Final expense insurance policies are available in two primary types: simplified issue and guaranteed issue. While both offer insurance coverage without requiring a full medical exam, they differ in eligibility, approval process, and any waiting period before the full death benefit is available.

1. Simplified Issue Final Expense Insurance

A simplified issue final expense insurance plan is a good option for those in moderate to good health who want final expense coverage without a medical exam but are willing to answer a few basic health questions.

Key Features:

• No medical exam required, but applicants must answer health-related questions (e.g., history of major illnesses, smoking status).

• Immediate coverage (no waiting period) if the applicant qualifies, so the payout from a final expense policy is available from day one.

• Lower insurance rates compared to guaranteed issue final expense plans.

• Coverage amounts typically range from $5,000 to $50,000.

Best For:

• Seniors in relatively good health.

• Individuals who do not have serious pre-existing conditions.

• Those who want immediate final expense coverage without delays.

2. Guaranteed Issue Final Expense Insurance

A guaranteed issue final expense life insurance policy is available to anyone within the eligible age range (typically 50–85 years old), regardless of health status. It is ideal for individuals who cannot qualify for other life insurance plans due to medical conditions.

Key Features:

• No health questions or medical exams—everyone in the eligible age range qualifies.

• Higher premiums due to increased risk to the insurance company.

• Includes a graded death benefit (a waiting period of 2–3 years before full payout).

• If the insured dies during the waiting period, the beneficiary typically receives a refund of premiums paid plus interest instead of the full death benefit.

Best For:

• Seniors with serious medical conditions (e.g., terminal illness, history of heart disease, cancer).

• Individuals who have been denied traditional life insurance policies.

• People willing to accept a waiting period in exchange for guaranteed approval.

Coverage Amounts & Typical Uses

Final expense life insurance policies offer modest coverage amounts designed to handle specific funeral expenses and related costs.

According to the National Funeral Directors Association, the median cost of a funeral in the U.S. can easily range from $7,000 to $12,000 or more. A final expense life insurance policy is meant to cover final expenses such as the costs of your funeral, burial, and small medical bills, so your family doesn’t have to scramble for funds.

Pros of Final Expense Insurance

Final expense insurance is designed to provide accessible, straightforward insurance coverage for individuals who want to ensure their funeral and related expenses are taken care of. It is particularly beneficial for seniors and those with health conditions who may not qualify for traditional life insurance.

Affordable Compared to Whole Life Insurance

Compared to traditional whole life insurance, final expense life insurance is generally more budget-friendly. While a larger whole life insurance policy can cost hundreds of dollars per month, premiums for a final expense policy are usually lower because the coverage amount is smaller. For someone who primarily wants to cover funeral and small debts, final expense insurance can help provide targeted protection at an affordable rate.

Fixed Premiums for Life

Like other forms of whole life insurance, final expense insurance policies come with fixed premiums that remain consistent throughout the life of the policy. Premia do not increase with age, which gives policyholders predictable long-term costs and ensures the life insurance coverage does not become unaffordable later.

No Medical Exam Required

One of the biggest selling points of final expense insurance is that many policies do not require a medical exam. For simplified issue policies, you’ll answer a few health questions; for guaranteed issue, there may be no health questions at all. This makes final expense life insurance particularly appealing to older adults or those with health issues who might otherwise be turned down for other life insurance policies.

Provides Peace of Mind for Beneficiaries

A final expense life insurance policy is primarily designed to ease the financial burden on loved ones. By providing a dedicated death benefit to a beneficiary, this type of policy helps ensure that funeral costs and other end-of-life expenses are covered. Instead of worrying about how to pay for your burial or funeral insurance needs, your family can focus on honoring your wishes and managing your final arrangements.

Quick & Simple Application Process

Compared to more complex life insurance plans, final expense insurance policies are often quick and simple to apply for. Approvals can happen in days rather than weeks, making them a practical choice for people who want coverage in place quickly.

Potential for Cash Value Accumulation

Because final expense insurance is a type of permanent life insurance, many policies build a small cash value over time, similar to a whole life policy. While this isn’t usually the main reason to buy final expense life insurance, it can provide some flexibility if you ever need to borrow against your policy.

Cons of Final Expense Insurance

Despite its benefits, final expense insurance is not the right fit for everyone. Understanding the downsides can help you decide how much final expense coverage—if any—makes sense.

Lower Coverage Amounts

The most obvious limitation of final expense coverage is its lower coverage amount. Policies usually top out around $50,000, which may be enough to cover funeral and some small debts, but not nearly enough for income replacement, mortgage payoff, or college funding. For those needs, term life or other traditional life insurance policies are typically better suited.

Higher Cost Per Dollar of Coverage

Because final expense insurance is designed for older adults and people with health issues, premiums for final expense insurance are higher per dollar of coverage than term life insurance. If you are younger and healthy, you’ll usually get far more life insurance coverage for the same price by choosing a term life or traditional whole life policy.

Waiting Periods on Some Policies

Guaranteed issue final expense insurance often includes a 2–3 year waiting period before the full death benefit is paid. If the insured dies during that period, the beneficiary may only receive a refund of premiums plus interest rather than the full payout from a final expense policy. This is an important limitation to understand before purchasing.

Limited Value for Younger, Healthier Individuals

For younger, healthier people, final expense plans typically don’t offer the best value. Because premiums for a final expense policy are high relative to its coverage amount, it’s usually more cost-effective for them to look at term life insurance or larger permanent life insurance options instead.

Who Should Consider Final Expense Insurance?

Final expense life insurance is a good fit for:

• A senior (50–85) with no savings set aside to cover funeral costs.

• People with pre-existing conditions who don’t qualify for traditional life insurance.

• Low-income families looking specifically for burial or funeral insurance rather than broad financial protection.

• Individuals without dependents who only need enough insurance coverage to handle funeral expenses and small debts.

It is not ideal for people who need high-value life insurance for income replacement or long-term financial planning.

Alternatives to Final Expense Insurance

While final expense insurance is a helpful tool for many, other options might provide better value depending on your situation.

1. Term Life Insurance

• Lower cost per dollar of coverage.

• Can easily provide $100,000+ in life insurance coverage.

• Best if you need temporary protection for a defined period (e.g., while paying a mortgage).

2. Whole Life Insurance

• Higher death benefit and lifelong coverage.

• Builds cash value over time as a traditional whole life insurance policy.

• More expensive, but more flexible for broader estate or family planning goals.

3. Personal Savings & Investments

• No premiums—funds remain completely under your control.

• Requires financial discipline to ensure enough is saved to cover final expenses and funeral and related expenses.

How to Choose the Right Option

Selecting the right life insurance or final expense solution depends on your financial situation and goals.

Consider:

• Financial situation – Do you have savings or will loved ones depend on a death benefit to pay funeral costs and other end-of-life expenses?

• Coverage needs – Do you only need to cover funeral and small debts, or do you need larger life insurance plans for income replacement?

• Health status – Can you qualify for traditional life insurance at reasonable rates, or is final expense insurance your most realistic option?

• Urgency of coverage – Do you need a quick, simple policy, or can you go through full underwriting?

Final expense insurance is a type of life insurance best suited for those who cannot qualify for larger life insurance policies or who only need to cover final expenses.

Conclusion

Final expense insurance is a reliable and accessible option for handling funeral costs and other end-of-life expenses, particularly for seniors and individuals with health conditions. As a type of whole life insurance, it offers fixed premiums, lifelong coverage, and a focused death benefit intended to cover funeral costs, burial, and small debts so loved ones aren’t left with a heavy financial burden.

However, because final expense coverage is limited and more expensive per dollar of coverage than other life insurance products, it may not be the best choice for younger, healthier people or anyone needing substantial life insurance coverage. Carefully comparing final expense policies, term life, whole life, and even personal savings will help you decide how much final expense protection—if any—is right for your situation.