Many of us spend years planning for our life in retirement. Planning for our deaths, however, isn’t quite as much fun.
The simple fact is that Medicare coverage ends, well, when your life does. And Social Security’s death benefit is a mere $255.1 According to the National Funeral Directors Association, the national median cost of a funeral with a viewing and burial in 2023 was approximately $8,300.2
Relying on retirement assets left to your estate to pay the bill is one option. Purchasing a “final expenses” insurance policy offers another.
What is final expense insurance?
A final expense policy is a type of life insurance that's designed to eliminate any financial loose ends when you pass away. These policies feature a guaranteed death benefit that's payable to your beneficiary.
The proceeds of a final expense policy can be used to cover funeral, cremation or burial costs, as well as outstanding medical bills, credit card debt or any other end-of-life expenses.
Generally, final expense insurance is available to people aged 50 to 85, although some insurance companies may set the cutoff at age 80. Depending on the insurer you purchase the policy from, you may have the choice between term and permanent coverage, with benefit amounts typically ranging from $5,000 to $50,000.