Final expense life insurance
Final expense is a whole life insurance policy. There is no medical exam involved, and the application only takes a few minutes. See if it's right for you.
Author: Brian Greenberg CEO of True Blue Life Insurance
Last updated October 13, 2020
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Is final expense life insurance right for you?

Final expense insurance is intended to help cover expenses incurred during the end of life, including medical bills.

Unless there is a life insurance policy, it can take a long time to transfer assets after death. In that situation, the family is often saddled with burial costs and other expenses until the assets become available.

Key features of final expense policies

  • Coverage amounts from $2,500 to $50,000
    Final expense and burial insurance are specific types of policies meant to provide families with funds to ease the burden of burial, debts, and medical bills.
  • No medical exam
    Final expense policies are “simplified issue.” This means they do not require medical exams.
  • Quick approvals
    Applications are just one to three pages. The answers provided on the application determine what type of policy you are eligible for.
  • Applicants must be over 50 years of age
    Final expense policies serve a specific market: people over 50 years of age who want a simple life insurance policy without a medical exam.
  • Guaranteed acceptance policies are available
    For those who do not qualify for a level or graded policy, a modified guaranteed issue policy with no health questions is available. With a modified policy, there is a two-year waiting period before the full benefit is paid. During that time, a partial benefit is usually paid, even if it is simply a return of the premiums paid plus 10%.
  • They build cash value
    As with any traditional whole life policy, final expense policies build cash value. This allows funds to be withdrawn if the need arises.
  • Premiums stay the same
    Once a whole life policy is purchased, the premiums are guaranteed to stay the same. One exception is a group life policy, where the benefit amount decreases after a certain age but the premiums still stay the same.
  • The beneficiaries choose how the benefits are spent
    The person who buys a final expense policy names the beneficiaries (those who will receive the proceeds of the policy upon death). Those beneficiaries can spend the insurance check on whatever is needed. By comparison, with a funeral insurance policy, the beneficiary is the funeral home.

How to get the best price on a final expense insurance policy?

Consider the following four criteria when choosing a final expense insurance policy:

  1. Application health questions
  2. Financial ratings
  3. Premium costs
  4. Policy type

1. Application Health Questions

Every insurance company has slightly different qualifying questions on its application. Where it gets tricky is finding the lowest cost policy while taking into account the different qualifications to get approved.

For example, someone who had cancer and was last treated more than two years ago could qualify for a level policy from Royal Neighbors that provides immediate full coverage. But if the same person applied to Mutual of Omaha, he or she would only qualify for a graded policy, which would have a two-year waiting period before the full benefits of the policy would be paid.

We talk to people all the time who want coverage right away with no health questions. Often, these people qualify for better policies if they are willing to answer some health questions.

If you can answer “no” to all of the following questions, then you can qualify for a policy that is priced better than a guaranteed acceptance policy with no health questions.

  • Are you currently hospitalized, in a nursing facility, confined to a bed, or receiving hospice care?
  • Are you currently prescribed oxygen for a lung or respiratory disorder?
  • Do you have a confirmed aneurysm that has not been surgically repaired?
  • Do you have any condition requiring a bone marrow, stem cell, or organ transplant?
  • Do you have kidney disease that requires dialysis?
  • Do you have Alzheimer’s disease, dementia, or mental incapacity?
  • Do you have Lou Gehrig’s disease (ALS)?
  • Has a medical professional told you that your life expectancy is 12 months or less?

Questions on the application must be answered truthfully.
Insurance companies verify the information on an application by pulling public reports:

  • Pharmacy Report – A record of prescribed medications over the last 10 years
  • MIB Report – A record of all previous life insurance applications
  • DMV Report – A record of driving history
  • If the information on any of these reports conflicts with the answers on the application, then the application will be declined or additional information may be requested.

2. Financial ratings

When choosing a company, it’s best to narrow down the search to companies with A ratings from AM Best and Standard & Poors. This ensures that the company chosen is able to meet its ongoing insurance obligations and has low vulnerability to adverse changes in economic conditions.

AM Best financial ratings explained
RatingScoresDefinition
SuperiorA+ to A++Awarded to companies that have a superior ability to meet their ongoing obligations.
ExcellentA to A-Awarded to companies that have a good ability to meet their ongoing obligations.
GoodB+ to B++Awarded to companies that have a good ability to meet their ongoing obligations.
FairB to B-Awarded to companies that have a fair ability to meet their ongoing obligations. Their financial strength is vulnerable to adverse changes in underwriting and economic conditions.
MarginalC+ to C++Awarded to companies that have a marginal ability to meet their ongoing obligations. Their financial strength is vulnerable to adverse changes in underwriting and economic conditions.

3. Premium costs

Choosing the right company can save 20 – 30% in premium costs for the same exact benefits.

A burial policy from Colonial Penn with no questions is over 20% more expensive than a no health questions policy from AIG (American Insurance Group).

Both companies are A rated. AIG offers up $25,000 in coverage, close to double the amount available from Colonial Penn. Both are modified policies with two-year waiting periods for full benefits. Both offer accelerated death benefit provisions. And both build cash value.

The biggest difference between policies from Colonial Penn and AIG is the cost.

4. Policy Types

Final expense life insurance comes in six different types. Each type has its own structure and pricing. Generally, the healthier the applicant is, the more benefits the policy will include, and the more affordable the policy will be.

We’ll talk about each type of final expense in depth below:

  1. Level benefit
  2. Graded benefit
  3. Modified benefit
  4. Guaranteed acceptance
  5. Group insurance

1. Level Whole Life Policies with Immediate Benefit

A level policy is the most basic and straightforward of the final expense policies. Level policies are issued to applicants who are in good health, with any health issues having been controlled for at least three years. The full amount of the policy will be in effect the day the application is approved. When the insured person dies, the named beneficiaries can receive the full death benefit right away.

An example of immediate benefit final expense life insurance

Specifications of level whole life policies

  • Full coverage from day 1
    Unlike graded or modified benefit policies, an immediate benefit policy will provide 100% of the death benefit starting on day 1.
  • Best-priced final expense plan
    Out of the six types of final expense policies, an immediate benefit plan has the best price and offers the best benefits.
  • Offers a higher coverage amount
    Level whole life policies can be purchased for $2,500 to $100,000, depending on the insurance provider.

What do you need to qualify for an immediate benefit/level whole life policy?

  • No major medical diagnosis or treatment in the past three years, including:

    heart attack, internal cancer, leukemia, respiratory disorder, diabetes diagnosed before age 40, stroke, COPD, Crohn’s disease, cerebral palsy, and MS
  • No history of:
    congestive heart failure, cardiomyopathy, Parkinson’s disease, paralysis, amputation or dependency on a wheelchair, dialysis, Alzheimer’s disease, ALS, AIDS, HIV, or current hospitalization
  • All medical conditions are well-controlled.
Best companies for level benefit policies
Insurance CompanyProductEligible agesCoverage amounts
American Continental Aetna Life Insurance CompanyLevel Benefit Plan45 – 89 years$3,000 – $35,000
Mutual of Omaha Life Insurance CompanyLiving Promise Level Benefit Plan45 – 85 years$2,000 – $40,000
Royal Neighbors of America Life Insurance CompanySimplified Issue Whole Life50 – 85 years$5,000 – $25,000
Sentinel Security Life Insurance CompanyNew Vantage I0 – 75 years$1,000 – $35,000
Prosperity Life Insurance CompanyNew Vista Level50 – 80 years$1,500 – $35,000
United Home Life Insurance CompanyExpress Issue Deluxe Simplified Issue Whole Life20 – 80 years$5,000 – $50,000
Americo Life Insurance CompanyEagle Premier Level50 – 85 years$2,000 – $30,000
Liberty Bankers Life Insurance CompanySIMPL Final Expense40 – 80 years$3,000 – $30,000
Nassau Re Life Insurance CompanyRemembrance Life30 – 80 years$10,000 – $100,000

2. Graded Benefit Policies

Depending on the insurance company chosen, applicants can often qualify for a graded policy if they have not had any major illnesses in the past 24 months.

For example, a graded plan might be right for someone with Parkinson’s disease or some other medically manageable disease. If a non-accidental death occurs within a two-year time frame, the policy will only pay a percentage of the total death benefit. During the third year and beyond, the entire death benefit will be paid.

An example of graded benefit final expense life insurance

Specifications of graded benefit policies

  • Graded death benefit
    Unlike immediate benefit policies, a graded death benefit policy will pay 30% of the coverage amount to the beneficiaries during the first year. The second year, the death benefit is increased to 70%. At the start of the third year, the death benefit will become 100%.
  • Accidental death rider
    If the cause of death is due to an accident, the beneficiaries will receive 100% of the death benefit, starting on day 1.
  • Return of premium + 10% in the case of suicide 
    If the cause of death is due to suicide, the beneficiaries will receive any paid premiums plus 10%.

What do you need to qualify for a graded whole life policy?

  • No major medical diagnosis or treatment in the past three years, including:
    heart attack, internal cancer, leukemia, respiratory disorder, diabetes diagnosed before age 40, stroke, COPD, Crohn’s disease, cerebral palsy, and MS
  • No history of:
    dialysis, Alzheimer’s disease, ALS, AIDS, HIV, or current hospitalization
  • All medical conditions are well-controlled.
Best companies for benefit policies
Insurance CompanyProductEligible agesCoverage amounts
American Continental Aetna Life Insurance CompanyGraded Benefit Plan45 – 80 years$3,000 – $35,000
Sentinel Security Life Insurance CompanyNew Vantage II45 – 85 years$1,000 – $20,000
Prosperity Life Insurance CompanyNew Vista Graded50 – 80 years$1,500 – $35,000
Royal Neighbors of America Life Insurance CompanyGraded Death Benefit (GBD)50 – 78 years$5,000 – $10,000

3. Modified Benefit Policies

A modified policy is very similar to a graded policy except it involves a serious illness, such as cancer, instead of a more manageable ailment. Modified policy benefits usually have a two-year waiting period before the entire death benefit can be paid to a beneficiary.

If a non-accidental death occurs before that two-year time frame, the policy will only pay a return of the paid premiums plus a small percentage of the total death benefit. During the third year and beyond, however, the entire death benefit will be paid.

Modified benefit explained for final expense

Specifications of modified benefit policies

  • Graded death benefit
    During the first two years of the policy, the beneficiaries will receive any paid premiums plus 10%. At the start of the third year of the policy, the beneficiaries will receive 100% of the death benefit.
  • Accidental death rider
    If the cause of death is due to an accident, the beneficiaries will receive 100% of the death benefit, starting on day 1.
  • Return of premium + 10% in the case of suicide 
    If the cause of death is due to suicide, the beneficiaries will receive any paid premiums plus 10%.
  • Coverage amounts of $1,000 to $40,000

What do you need to qualify for a modified benefit whole life policy?

  • No major medical diagnosis or treatment in the past three years, including:
    heart attack, internal cancer, leukemia, respiratory disorder, diabetes diagnosed before age 40, stroke, COPD, Crohn’s disease, cerebral palsy, and MS
  • No history of:
    dialysis, Alzheimer’s disease, ALS, AIDS, HIV, or current hospitalization
  • All medical conditions are well-controlled.
Best companies for modified benefit policies
Insurance CompanyProductEligible agesCoverage amounts
Mutual of Omaha Life Insurance CompanyLiving Promise Graded Benefit45 – 80 years$2,000 – $20,000
American Continental Aetna Life Insurance CompanyModified Benefit Plan45 – 75$3,000 – $35,000

4. Guaranteed Acceptance Policies

A guaranteed issue policy is a policy with no health questions. There’s a two-year waiting period before the entire death benefit can be paid to a beneficiary.

In years 1 and 2, the benefit is the return of all the money paid thus far plus 10%. This protects insurance companies in cases where the person who purchases the policy already has a terminal diagnosis or is in hospice. For accidental death, the full benefit amount is paid to beneficiaries in years 1 and 2.

In year 3, the full benefit amount is paid to beneficiaries.

Guaranteed Acceptance explained for final expense

Specifications of guaranteed acceptance policies

  • Graded death benefit
    During the first two years of the policy, the beneficiaries will receive any paid premiums plus 10%. At the start of the third year of the policy, the beneficiaries will receive 100% of the death benefit.
  • Accidental death rider
    If the cause of death is due to an accident, the beneficiaries will receive 100% of the death benefit, starting on day 1.
  • Return of premium + 10% in the case of suicide 
    If the cause of death is due to suicide, the beneficiaries will receive any paid premiums plus 10%.
  • Coverage amounts of $1,000 to $40,000

What do you need to qualify for a guaranteed acceptance whole life policy?

  • There is no health qualification. Acceptance is guaranteed.
Best companies for guaranteed acceptance policies
Insurance CompanyProductEligible agesCoverage amounts
AIG American General Life Insurance CompanyGuaranteed Issue Whole Life50 – 85 years$5,000 – $25,000
Gerber Life Insurance CompanyGuaranteed Life50 – 80 years$5,000 – $25,000
Great Western Life Insurance CompanyGuaranteed Assurance40 – 80 years$5,000 – $40,000
AAA Life InsuranceGuaranteed Issue45 – 85 years$5,000 – $25,000

5. Funeral Insurance

A pre-need funeral policy is purchased directly from a funeral home, and the funeral home is named as the beneficiary. The purpose is to pay for one’s funeral in advance. The policy covers the cost of funeral home services, a casket, burial fees, and memorial services.

The negatives: This is more like a layaway plan than a life insurance policy. These plans are offered as single-pay, 1-year, 5-year, and 10-year payment options. Once a plan is chosen, it’s locked in and difficult (or impossible) to change.

The positives: The positives: Once the plan is in place, there is no hassle or worry about needing to plan for a funeral at the last minute. And, the prices are set ahead of time.

Funeral insurance explained

Specifications of funeral insurance policies

  • Graded death benefit
    During the first two years of the policy, the beneficiaries will receive any paid premiums plus 6%. At the start of the third year of the policy, the beneficiaries will receive 100% of the death benefit.
  • Accidental death rider
    If the cause of death is due to an accident, the funeral home will receive 100% of the death benefit, starting on day 1.
  • Return of premium + 6% in the case of suicide 
    If the cause of death is due to suicide, the funeral home will receive any paid premiums, plus 10%.
  • The funeral home is the beneficiary
  • Coverage amounts of $1,000 to $20,000

What do you need to qualify for a funeral insurance policy?

    There is no health qualification. Acceptance is guaranteed.There is no health qualification, acceptance is guaranteed.
Best companies for funeral insurance policies
Insurance CompanyProductEligible agesCoverage amounts
National Family Assurance Life Insurance CompanyPreneed Insurance50 – 85 years$5,000 – $25,000
United Heritage LifePreneed Funeral PlanningAny age$1,000 – $20,000
Great Western Life Insurance CompanyPreneed Funeral Insurance0 – 89 years$5,000 – $25,000
Lincoln Heritage Life Insurance CompanyFuneral Advantage0 – 85 years$1,000 – $20,000
American MemorialFinal Event Planning0 – 85 years$5,000 – $75,000

6. Group Life Insurance

Group life insurance is a type of policy that is provided by an employer, an association, or an organization. Each group has its own requirements for becoming a member.

Each group or association has different products. The products are issued by an insurance company, but the group is the master policyholder. This means that instead of the insurance company issuing each person an individual policy, everyone named on the policy receives a certificate of insurance.

Service for the policy is provided by the plan administrator rather than the insurance company directly.

Group life insurance is available to all ages, and there are very few health questions, if any, to qualify. Coverage amounts start at $10,000. Term and whole life policies may be available, depending on the group.

Group life insurance explained

Monthly premium example of group life insurance

Specifications of group insurance policies

  • Full coverage from day 1
    Unlike graded or modified benefit policies, an immediate benefit policy will provide 100% of the death benefit starting on day 1.
  • Just a few health questions to apply
  • Issued a certificate of insurance rather than a full policy
  • May be canceled if the group terminates
  • Coverage amounts of $10,000 to $75,000

What do you need to qualify for a group insurance policy?

  • Membership requirements depend on the group.
Final expense company comparison chart
Company & ProductEligible Ages & Coverage amountsTrue Blue Comments

American Continental Aetna Life Insurance Company
Final Expense Whole Life Brochure
45 – 89 years
$3,000 – $35,000
Application is taken over the phone in just 15 minutes. One of the most lenient health questionnaires. Great pricing. Excellent customer service.

Mutual of Omaha Life Insurance Company
Living Promise Brochure
45 – 85 years
$2,000 – $40,000
Application is taken over the phone in 15 minutes. There may be a phone interview conducted by a company representative. One of the most popular final expense companies. Outstanding customer support.

Royal Neighbors of America Life Insurance Company
Final Expense Brochure
30 – 80 years
$10,000 – $100,000
The application takes 15 minutes to complete, and then another 15-minute call with a Royal Neighbors representative. The product comes with several membership benefits. One of the most lenient companies for those with health conditions.

Sentinel Security Life Insurance Company
New Vantage Brochure
0 – 75 years
$1,000 – $35,000
One of the best-priced final expense plans. Application is taken over the phone in 20 minutes, and an instant approval is given. This is one of the best plans for those who qualify, due to the incredible pricing.

Prosperity Life Insurance Company
New Vista Brochure
50 – 80 years
$1,500 – $35,000
Application is taken over the phone in about 15 minutes. The pricing is fantastic on these products. Payments can be made by credit card.

United Home Life Insurance Company
Simplified Issue Whole Life Brochure
20 – 80 years
$5,000 – $50,000
This is one of the most lenient companies in terms of approving applications. There are several level benefit plans to choose from. This is a great product for those who have problems qualifying for first-day coverage.

Americo Life Insurance Company
Eagle Premier Brochure
50 – 85 years
$2,000 – $30,000
Americo has lenient underwriting, so we recommend this product for people who meet the health requirements for first-day coverage.. Strong company with good customer support.

Liberty Bankers Life Insurance Company
SIMPL Final Expense Brochure
40 – 80 years
$3,000 – $30,000
Application can be taken over the phone in 30 minutes and, with a voice signature, the policy is active immediately. Depending on your health situation, this may be the best-priced plan.

Nassau Re Life Insurance Company
Remembrance Life Brochure
30 – 80 years
$10,000 – $80,000
This is an interesting product in that there are living benefits riders included at no charge. These allow access to the death benefit in the event of serious illness or disability.

AIG American General Life Insurance Company
GIWL Brochure
50 – 85 years
$5,000 – $25,000
The application is completed online with a digital signature, and the process takes about 15 minutes. This policy has no health questions and is often the best-priced modified benefit plan.

Gerber Life Insurance Company
Gerber Guaranteed Life Brochure
50 – 80 years
$5,000 – $25,000
Application takes 15 minutes to complete. There’s a 7% discount for paying monthly with ACH bank transfer. Excellent pricing that is often less expensive than modified plans with health questions.

Great Western Life Insurance Company
Guaranteed Assurance Brochure
0 – 89 years
$5,000 – $40,000
Great product that offers the highest amount in guaranteed acceptance coverage ($40,000). If you are able to appropriately answer three medical questions, you can get $48,000 in coverage with first-day coverage.

Columbian Life Insurance Company
Guaranteed Issue Whole Life Brochure
25 – 80 years
$2,500 – $25,000
Columbian has the only policy that provides guaranteed acceptance plans to people as young as 25. Coverage for most no-questions policies begins at age 50.
National Family Assurance Life Insurance Company50 – 80 years
$5,000 – $25,000
One of the leaders in pre-need insurance policies. Funeral homes often sell this product directly to customers. Security National is a good company with good customer service.
Lincoln Heritage Life Insurance Company

Funeral Advantage Brochure

0 – 89 years
$1,000 – $20,000
Application is taken on paper and takes 20 minutes to complete. Strong company financially. Policies are expensive.

United Heritage Life
Preneed Funeral Planning Brochure
0 – 80 years
$1,000 – $20,000
United Heritage is sold by agents and funeral homes. Costs are on the expensive side. Strong company financially.
American Memorial
Final Event Planning
0 – 85 years
$5,000 – $75,000
One of the more popular plans offered through funeral homes. Service is handled by the parent company, Assurant. Customers often report to us that the lack of customer service is frustrating.
Rated 4.9 out of 5 based on 48 Ratings
5
Jul 19, 2020
Freda Wheatcraft - North Carolina
Review:
She was very helpful and worked with my needs.
Agent:
Cheryl Schlenkert True Blue agent
5
Jul 06, 2020
Sylvia Donnell - Oklahoma
Review:
Very helpful, easy to deal with.
Agent:
Aaron Udell True Blue agent
5
Jun 28, 2020
Ford King - Nevada
Review:
One word GREAT. EFFICIENT AND KNOWLEDGEABLE. TOOK TIME TO GO OVER ALL COMPANIES. THE BEST. WILL BE DOING MORE BUSINESS FROM AMY MY DAUGHTER. THANKS
Agent:
Aaron Udell True Blue agent
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