Life Insurance Information Dictionary

Final Expense Life Insurance

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The Dictionary of Insurance Terms and Definitions

Final expense life insurance does not have a strict definition across the industry but is rather a category defined for marketing purposes.  Final expense life insurance is any life insurance product intended for use in paying off final expenses (funeral, medical, etc.).

In truth, any person can use any life insurance product he or she chooses to pay off final expenses.  And any policy marketed as a "final expense" life insurance policy can be used for any purpose—there's no rule that constrains use of the death benefit to only final expenses.

Nevertheless, policies marketed as final expense life insurance are generally better suited to handling solely final expenses.  They tend to be cheap and offer relatively small death benefits.  Some are permanent life insurance, and some are term life insurance products.

Often, final expense insurance products are nonmedical issue—that is, insurers require no medical exam to approve coverage.  This is useful for clients who are ill and so have reason to expect their death within a very few years.  If they don't have the money on hand to pay for their final affairs, they may find the most economical solution in simplified issue, guaranteed issue, or graded benefit life insurance.

A few of the carriers we quote

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