How does Final Expense Life Insurance work?
There are two options with this type of insurance – term coverage or permanent coverage.
Term Final Expense coverage will run for a designated period of time, perhaps 10 or more years, and will only pay the benefit amount if you die within that time frame.
Permanent coverage does not expire and will remain in place for as long as the premiums are paid. Sometimes, permanent policies can offer a cash value in addition to the benefit, which will accumulate during the life of the policy.
In both cases, the benefit amount is paid to the beneficiary on the occasion of your death, to allow for the cost of your final death expenses to be covered.
Typically the premiums for Final Expense Insurance coverage are lower than for standard life insurance coverage. Often this cover is used by persons who have a fixed income – such as retirees – because the policy can usually be paid in easy, monthly installments.