Every family will face the inevitability of the death of a loved one. Often, significant medical expenses have been incurred prior to the death of this family member. This is in addition to the actual cost of the funeral which averaged $6,560 in 2009 according to the National Funeral Directors Association. Often, costs of travel to an out of state location can add to the overall cost incurred by the family. As a way of paying for these significant expenses, final expense insurance is sold to seniors as a way of offsetting these costs. The proposed insured applies for a whole life policy and, depending on his health condition, is issued an immediate death benefit policy, graded policy, or return of premium policy. Individuals with more severe health conditions will have limits on the issued policy usually for the first two years unless death occurs as the result of accidental death. Because the premium paid is fixed for the life of the policy no increase in cost is incurred. Policies can range in face amount from $2,000 to $35,000.

 

The death of a loved one is an extremely difficult and emotional time for a family. Knowing that expenses relating to the death and burial are paid, provides the family peace of mind as they adjust to life without their family member and allows them to carry on without bearing the burden of a large financial obligation.