Not Sure about Final Expense Insurance? Get the Facts Now

final expense insurance
Written by Sonny

If you’re like many of us and spend any time watching TV during the daytime, you will more than likely be bombarded with commercials about Final Expense or Burial Insurance. Some companies will disclose more information than others, but like most commercials, the important disclosures are in a block at the bottom of the screen that is typically hard to see and read.

Please don’t misunderstand, for most seniors, final expense insurance is a good thing because it’s the most affordable way to take care of final expenses after you’ve passed away. Doing so in advance shows your love for your loved ones and removes the financial burden that they might have to deal with while they are mourning their loss.

Understand what You’re Getting (or not getting)

On most TV commercials, the final expense insurance being advertised is referred to as “Guaranteed Acceptance” or “Guaranteed Issue.” There is nothing wrong with these plans but they are best used as a last resort for seniors looking to purchase life insurance and here’s why:

  • The Waiting Period – Life insurance policies that are labeled “guaranteed acceptance” or “guaranteed issue” have a waiting period of two or three years before the company will pay the full death benefit if you die of natural causes. Most companies will instead pay (or refund) all of the premiums paid in the policy plus a small additional percentage like 10 or 15%. This means that if you purchase one of these policies with a $20,000 death benefit and then pass away during the waiting period due to natural causes, your beneficiary will get the money you paid in plus the additional percentage they offer. Unfortunately, this will fall well short of paying for your funeral. It’s important to note, however, if you die as the result of an accident, most companies will pay the full death benefit from the first day of coverage. No waiting period applies.
  • Your Cost of Insurance – With guaranteed acceptance life insurance, the insurance company does not require a medical exam and most companies have only a few health questions, if any, on their application. Since the company is not taking your health into consideration, they are entitled to charge more money for an unknown health risk.
  • Lower Face Amounts – When you agree to purchase this type of insurance, most companies will limit your death benefit to about $20,000. For most seniors, $20,000 is likely to cover a moderately priced funeral and maybe some unpaid medical bills, but that is likely all that will be covered.


Level Benefit Final Expense Insurance is the Best Choice

To get better health insurance coverage at a more affordable rate, it makes sense to see if you’ll qualify for traditional Final Expense insurance instead of purchasing “guaranteed acceptance” life insurance from the get-go. Traditional Final Expense insurance is referred to as “level benefit” because there is no waiting period when the insurance company will pay out less than the death benefit you applied for. Level Benefit life insurance also pays the death benefit for any reason from the first day your policy is issued.

With traditional level benefit Final Expense insurance, a medical exam is not required but there are substantial health questions on the application. If you are fairly healthy and can answer “no” to many of the health questions, you’ll likely qualify for coverage. If you have multiple serious health issues, you will probably be declined and then offered a guaranteed acceptance policy.

The good news is that not all insurance companies have the same underwriting guidelines. Where one company might decline coverage because of COPD, another company might not take issue with it. This means that to get the best coverage at the most affordable rate, you’ll need to speak with an experienced and reputable independent insurance agent who represents many of the companies offering final expense insurance. By doing so, you can shop your insurance needs in one place and find the best solution among many companies.

The Price Difference between Level Benefit and Guaranteed Acceptance

So you can see the savings when you qualify for traditional Level Benefit Final Expense insurance versus having to purchase Guaranteed Acceptance insurance, review the actual insurance rates listed below.

These are actual rates for $15,000 Level Benefit final expense insurance versus Guaranteed Acceptance final expense insurance for a female non-smoker:

Age of Applicant

Level Benefit

Guaranteed Acceptance

















As you can see from the chart above, the insurance rates for a Level Premium final expense policy is remarkably cheaper than Guaranteed Acceptance final expense insurance. To obtain insurance rates for your actual rates and your health history, simply contact an independent insurance agent who specializes in senior insurance products for an actual quote.

The Bottom Line for Final Expense Insurance

The purpose of this article is not to denigrate Guaranteed Acceptance final expense insurance. On the contrary, having guaranteed issue life insurance may be your only option and if so, it is certainly better than having no coverage at all. The intent of this article is to point out some of the drawbacks when you start your buying process by applying for insurance that is considered “the insurance of last resort” first rather than last.


About the author


After spending 25 years in the insurance industry, I reinvented myself into a freelance writer and web designer for the insurance industry. Now I get to talk about insurance instead of having to sell it. I currently write for all types of insurance agents, brokers, and companies.

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