4 Ways That Final Expense Insurance Can Protect You and Your Family

Most people don't think about final expense insurance when planning their financial future. DebtMD has you covered on how it can help you and your family.

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Final expense insurance goes by many names, including burial and funeral insurance. If you are interested in this type of coverage, you’re likely more interested in how final expense insurance can provide comfort for you and your loved ones than you are in the vocabulary. So, here’s what you can expect to get help with from final expense insurance:


You may already know that the biggest perk of funeral insurance is ensuring your funeral costs are covered. If you have never had to plan a funeral, you may not even realize just how high those costs can be. Median funeral costs over the past year have been right around $7,640, but this figure should really just serve as a baseline. With additional expenses thrown in, including a vault and casket, most funerals end up costing surviving family members anywhere from $10,000 to $12,000. If that number is surprising to you, just think about how shocked your loved ones would be if they had to come up with $10,000 to pay for your funeral. While some organizations provide financial assistance to help with funeral expenses, your family could be left taking out loans if you were to pass away without any insurance coverage.  


Funeral expenses are not the only debts left behind when a loved one passes. Other leftover debt, including credit card balances, medical bills, and personal loans, can be passed on to surviving family members after your death. This is especially true if you are married and live in a state with community property laws. Under these laws, any debts incurred while married become the surviving partner’s responsibility if one of you should pass away. While having life insurance can help offset these leftover debts, it’s also wise to build some additional financial protection for your loved ones. Buying burial insurance is a budget-friendly and smart way to do so because your family can use this policy in one of two ways. They could cover funeral costs, as mentioned above, which will free up cash to pay off debts, or they could use your final expense policy to cover debts, depending on how much coverage you purchase.


Funeral costs and leftover bills can certainly be leftover expenses. Buying final expense insurance will ensure that your loved ones don’t have to deal with these costs if you should pass away unexpectedly. That’s reason enough to buy a policy but burial insurance can also help you out with surprise expenses while you are still alive. Burial insurance is considered a “cash policy,” which means as you pay your premiums your policy will be building cash value. With cash value insurance, you can use the equity you build to take out a loan, withdraw cash, or even sell your policy. While taking advantage of these options can be rather expensive, having access to an additional source of cash can be a real lifesaver when emergency expenses come up. Of course, having an emergency fund can keep you from having to cash out your policy. 


If you tend to view insurance, whether it’s burial, health, or car insurance, as just an extra expense, you should consider adjusting your perspectives. That’s because when you have the right types of insurance for your life stage, you essentially have a life preserver for your finances. So if you’re not quite ready to plan your own funeral but you do want more financial security, you should definitely think about whether having burial insurance will help you do so. As mentioned above, final expense insurance can be a budget-friendly alternative to more traditional life insurance. Plus, you may even be able to build some cash value depending on your plan. More importantly, think about all of the ways that a final expense insurance policy could help your loved ones avoid additional anguish during an already stressful time. 


If you want to achieve true financial stability, you have to plan for both the expected and the unexpected. This includes your own end of life. So whether you opt into final expense insurance or other life insurance coverage, make sure your loved ones have what they need. 

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