Final Expense Whole Life: A Simplified Approach for Burial Costs
Final Expense Whole Life insurance, often marketed as burial or funeral insurance, is a simplified form of permanent life insurance designed specifically to cover end-of-life costs. It caters primarily to older adults who need a modest, permanent policy without complex underwriting.
Key Features of Final Expense Policies
Unlike traditional Whole Life, Final Expense policies are characterized by:
- Lower Face Amounts: Typically ranging from $5,000 to $50,000, tailored for funeral and final medical bills.
- Simplified Underwriting: Often requires no medical exam, relying instead on a few health questions. This makes it accessible to individuals with pre-existing conditions.
- Permanent Coverage: The policy lasts for life, with a guaranteed death benefit and fixed premiums.
The Graded Benefit Clause
To mitigate risk due to simplified underwriting, many Final Expense policies include a **Graded Death Benefit**. If the insured passes away within the first two or three years for a non-accidental reason, the beneficiaries may only receive a return of premiums paid plus interest, rather than the full death benefit. The full death benefit is paid immediately for accidental death.
Disclaimer: This content is for informational purposes only and is not financial or legal advice. Final expense policies are intended for specific, modest needs. Consult an agent to ensure the policy meets your goals.