How Final Expense Insurance Pays the Average Funeral Cost

With the average cost of funerals and end-of-life expenses on the rise, it’s important that you have a solid plan to cover these costs. If you don’t have a traditional life insurance policy in place, final expense insurance may be the best option to guarantee that these large, costly expenses are covered. Find out why final expense insurace may be your best option to protect your family from an unexpected financial burden at the worst possible time.

Final expense insurance is a type of whole life insurance policy that is used to cover your funeral and burial expenses. It is considered whole life insurance because it doesn’t expire and lasts throughout your life.

While it is often meant to pay for your end-of-life expenses, the payout can also be used to provide a small inheritance to your beneficiaries. The coverage amount of Final Expense Insurance usually ranges from $5,000-$50,000.

This policy type has become widely preferred by seniors due to its flexibility. Another appeal would be the simple underwriting process. The application typically only requires a few questions and no physical exam.

Before deciding on how much coverage you need, there are a few things to take into consideration, such as:

• What is your budget for monthly premiums?
• What exactly do you intend to use this coverage for?
• What are your personal debts?
• How much do you expect your funeral to cost?
• What are your beneficiaries’ needs?

To accurately calculate the amount needed to cover your final expenses, research the average costs associated with the services you would like to have included in your funeral. We have compiled a breakdown of average funeral costs with information from the National Funeral Directors Association (NFDA) for your convenience below.

[TABLE]

In addition to these costs, you will also need to add in a “non-declinable basic service” fee. This is a fee charged by all funeral service providers that covers administrative costs, licensing, and transporting the deceased. According to the NFDA, the average cost of this fee is $2,195. After adding this fee into the average funeral expenses, your total cost for a traditional funeral comes out to $9,135.00. Keeping this in mind, you should budget to have no less than $10,000 of coverage in your policy.

It is important to note that it’s better to overestimate your total costs than to underestimate. This provides your family with flexibility in the event that the average prices increase before the need to use your policy.

The average burial cost can also fluctuate depending on where you live. For a more detailed breakdown of the average funeral cost by region, according to the NFDA, please see the chart below.

[TABLE]

It may be overwhelming to think about how your family will be taken care of following your death. However, adequately preparing for your end-of-life expenses can provide you and your family peace of mind.

Make it easy on yourself your family by consulting an expert on how to determine if a Final Expense Insurance is right for you. Fill out this simple, online form and one of our highly-trained staff at SAO will reach out and help you estimate an appropriate and affordable amount to cover your needs.