How Much Does Final Expense Insurance Cost?
Final expense insurance is very affordable, with many policies costing between $50-$100 per month.
As you may already know, insurance costs vary based on a number of factors, including how much coverage you need, your age, and your gender.
Before we delve into some cost examples, you may be wondering – why do I need final expense insurance anyway?
Why Buy Final Expense Insurance?
Final expense insurance is designed to cover – you guessed it – your final expenses. Most commonly, this includes your funeral and the costs associated with your burial.
There are other expenses that come with dying (morbid, we know), like medical bills, legal fees, credit card debt, and any other bills you may have. We all know that funerals come with a cost, but many of us just don’t realize how expensive these things are.
Final expense insurance is specifically designed to cover these end-of-the-road bills so that it’s not left to your loved ones. Most of us want to leave a loving legacy, not a financial burden.
Ultimately, the purpose of buying final expense insurance is to make sure that your spouse, children, or other loved ones won’t be on the hook for the costly bills that come with death.
How Much Final Expense Insurance Do I Need?
Final expense insurance plans have death benefit options that range from as low as $2,000 to as high as $50,000.
The cost of a funeral ranges pretty drastically depending on how fancy you get. For example, a basic casket costs around $2,000, while some mahogany, bronze, or copper caskets cost upwards of $10,000 (Federal Trade Commission).
When we look at a basic funeral with average selections, the cost with viewing, burial, and a vault is $8,775 as of 2017 (National Funeral Directors Association). For cremation, the average cost is $6,260. Additionally, you could opt to donate your body to science, which lowers the cost even further.
You may also have other expenses, such as probate or estate taxes.
You can estimate your potential final expenses by using our Final Expense Cost Planning Worksheet. The worksheet has the average costs included to help you determine your expected costs.
Do Not Buy Term Life Insurance For Your Funeral Costs
Believe it or not, there are websites out there that recommend term life insurance as a plan to cover your funeral costs.
This is absurd advice, and please, if you get nothing else from this, do not buy term life insurance with the goal of using it for final expenses!
Term life insurance is very inexpensive, but that’s because it’s used for a term. Typical term policies will cover you for 10, 15, 20, or even 30 years, depending on how long you need coverage.
These are great for newly married couples that want to insure their spouse or young families who want to make sure their kids and spouse will be covered in the event of premature death.
However, the older you get, the pricier these policies become.
In reality, term life insurance is not at all designed to cover your final expenses.
Final expense insurance policies are designed to pay for your funeral and other expenses, and they don’t have a term. They generally last until age 121, and the benefit is in line with the actual costs expected so that you don’t overpay for insurance, especially if money is tight.
If you’re 70 years old, and you want term life insurance to cover you for the next 30 years, you can expect to pay more than $3,000 per year for the lowest death benefit offered.
Final expense is much more affordable, and we know that’s what’s important, especially if you’re living off a fixed income and don’t have much to spare.
How Much Does Final Expense Insurance Cost?
Final expense insurance is an inexpensive way to make sure your funeral expenses will be taken care of.
Let’s look at a few examples of final expense insurance premiums here in Decatur, IL.
If you’re a female, and you want a $10,000 death benefit, you’re looking at around $40 per month (non-tobacco, age 65). If you’re a male, the monthly premium would be around $50 per month.
Let’s say you’re 75 years old and you need a $15,000 death benefit. A female would be right around $100 per month, and a male at about $120 per month (both non-tobacco).
The price can vary by carrier, but we always shop the options to make sure you’re getting the best price for the coverage you need.
For many individuals, this minor monthly cost is well worth the assurance that your family will not be responsible for their end of life expenses.
How Else Can I Pay For My Final Expenses?
While we highly recommend adding final expense insurance to your retirement preparations, there are other options to consider.
For example, you can pre-pay for your funeral through a funeral home. The benefit of this is that it locks your price in so that you aren’t subject to rising costs of funerals. Your burial space is also reserved at that time, and your family doesn’t have to make any of those major decisions.
However, there are some cons to consider, such as:
- If you move and no longer want to use that funeral home
- If that funeral home goes out of business, you lose your money
- That sum of money is tied up, and you can’t use it if you need it
Another option would be to purchase a traditional life insurance policy. These permanent plans can be tailored to fit your budget and needs.
For example, if you have a lump sum of money, you might consider placing it in a High Cash Value Single Premium life insurance policy. This has cash value that grows over time, and it also has a guaranteed death benefit that is very attractive for many individuals.
Another example is if you need a plan for potential long-term care costs. There is a hybrid option called Life Insurance with Long-Term Care Benefits, and this allows you to pull money from the policy if you end up needing care, such as nursing home care or assisted living care.
So, while Final Expense insurance is a fantastic way to plan for your funeral expenses, we have many options that you might consider looking into.
Our team of licensed agents is so knowledgeable about all the details of these options. Please take advantage of our expertise, and let us help you make the right decision for your family.
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