Final Expense Insurance vs. Whole Life Insurance
When it comes to covering the costs associated with final affairs in life and funeral expenses, both final expense life insurance and other types of life insurance can potentially be viable options. In fact, final expense life insurance is a type of life insurance, but what’s the difference and why does it matter? We will give you a breakdown below.
| Final Expense Insurance | Whole Life Insurance | |
|---|---|---|
| Purpose | Final expense insurance is specifically designed to cover end-of-life expenses, such as funeral costs, unpaid bills and debts, and burial expenses. | whole life insurance provides coverage for the entire life of the policyholder and can also be used to cover end-of-life expenses. It can also be used as an investment vehicle to pass along generational wealth. |
| Coverage Amount | Final expense insurance policies typically have smaller death benefits, ranging from $5,000 to $50,000. | Whole life insurance policies can have higher death benefits, ranging from $50,000 to several million dollars. |
| Premiums | Final expense policies tend to have lower monthly premiums, making them more affordable for those on a budget. Some plans can start as low as $5/month to limited coverage amounts. | Whole life insurance policies have significantly higher monthly premiums, but they can also build cash value over time. It varies greatly depending on your age, current health, and the amount of coverage you are looking for. |
| Duration | Final expense insurance policies are typically designed to provide coverage for a limited time period, such as 5, 10, or 20 years. | Whole life insurance policies provide coverage for the entire life of the policyholder. |
| Application Process and Coverage | Final Expense policies typically have a very simple application process, often without medical exams. The coverage can vary in terms of how long a period they cover and in some cases do have health or age restrictions. | Whole life insurance policies offer guaranteed coverage for the life of the policyholder but have a more complex application process. In most cases it will require some medical records or an exam to get approval and your current health will be taken into account when determining premium amounts and coverage levels. |
As you can see, there are quite a few differences between the two life insurance types. The choice between final expense insurance and whole life insurance really depends on your specific needs and financial goals. If you’re looking for a simple and affordable way to cover end-of-life expenses, final expense insurance may be the right choice for you. If you’re looking for lifetime coverage and the potential to build cash value, whole life insurance may be a better option.
In either case, the team at GetLifePlans can help. We can connect with a licensed agent to answer your questions and get you a free, no obligation quote on your terms. Either call the number below to be connected right away or provide your contact information and an agent will contact you.
