Final expenses insurance 101

Planning ahead for end-of-life expenses isn't the easiest topic to think about. But taking proactive steps now can help spare your loved ones from any unexpected financial strain.

Final expenses insurance – sometimes called burial insurance or funeral insurance in Canada – is designed to help pay for funeral costs, cremation, and other final expenses.

In this guide, we'll break down how final expenses insurance works, how it differs from a traditional life insurance policy, and what benefits it can offer you and your family.

What is final expenses insurance?

Final expenses insurance is a type of insurance designed to cover funeral and burial costs, memorial services, and any other immediate expenses that might come up when someone passes away.

Unlike more traditional life insurance policies (which are often aimed at long-term financial security or income replacement), final expenses insurance focuses specifically on covering funeral costs, outstanding medical bills, and smaller debts.

This means your family won't have to worry about making lump sum payments for funeral arrangements or other end-of-life expenses.

What can final expenses insurance help with?

The death benefit from a final expenses insurance can reduce the financial burden on your family. Coverage options typically include:

• Funeral or memorial service costs: Expenses for a funeral or memorial service can vary widely, and having insurance coverage can help alleviate that burden.
• Burial or cremation costs: Whether you prefer a burial plot or cremation, these costs can add up, even for basic funeral packages.
• Outstanding medical bills: Although Canada’s public health care system (Medicare) covers many essentials, private healthcare costs or uncovered medical expenses can add up.
• Immediate expenses: These might include debts, short-term bills, or other funeral-related expenses such as an obituary or memorial service stationery.

What is the difference between final expenses insurance and funeral insurance?

The terms final expenses insurance and funeral insurance are often used interchangeably. Both provide a modest coverage amount to help with funeral costs, burial expenses, and other final arrangements.

Some policies may also be called burial insurance or funeral insurance in Canada, but the core concept is the same – expect smaller whole-life insurance coverage that pays out a lump sum amount to help with essential end-of-life expenses.

What is the difference between life insurance and final expenses insurance?

While final expense insurance falls under the umbrella of life insurance products, it differs from traditional life insurance, such as term life insurance or whole life insurance, in several key ways:

• Coverage amount: Term life insurance and other traditional life insurance policies often provide larger death benefits to replace lost income or support long-term financial security. Final expenses insurance, on the other hand, offers a smaller coverage amount to help with funeral expenses and related costs.
• Underwriting: Final expenses insurance usually involves a simplified underwriting process. This means many policies may not require a physical exam or a detailed health questionnaire.
• Premium payments: Policies typically come with fixed premiums, meaning the cost remains stable over time. Because final expense coverage is lower, costs are generally more affordable than larger life insurance policies.
• Purpose: While some life insurance options are designed for major financial support, final expenses insurance plans are meant to help with funeral or memorial service expenses, cremation or burial costs, and any immediate debts.

What is direct insurance?

Direct insurance refers to buying a policy straight from an insurance provider without using a middleman or a broker. This can simplify and speed up the process of securing cover.

Many direct providers streamline the application process with potentially fewer health checks or medical exams.

For Canadians, direct insurance can offer an easy way to get covered quickly because it speeds up approval times and reduces administrative hurdles. It's also particularly helpful for those with health issues or those looking for guaranteed acceptance plans.

Plus, direct insurers can give you access to licensed insurance advisors, helping to provide recommendations and advice on products might suit your needs and circumstances.

What are the benefits of final expenses insurance?

Final expenses insurance plans come with several advantages, like flexible coverage options, making them a practical choice for those looking to ease the financial burden on their loved ones. Here are some of the benefits to consider.

Guaranteed acceptance

If you have pre-existing health conditions or are in poor health, some policies offer guaranteed acceptance. This means you can get insurance coverage even if other insurance options might not be available to you.

No medical tests

Often, final expenses insurance policies don't require a full medical exam. This can help you avoid lengthy procedures and the potential stress of being turned down due to health issues.

A quick payout

The death benefit amount is typically paid out swiftly, ensuring your loved ones can cover funeral costs and other expenses without any unnecessary delays.

Immediate coverage

Once your policy is approved and your first premium payment is made, your coverage begins immediately, giving you peace of mind.

Triple payout for accidental death

Some policies come with an accidental death coverage, which increases the benefit amount if death occurs due to an accident. This can provide extra financial support for your family.

Early cash out

For additional financial flexibility, certain final expenses insurance policies accumulate cash value over time, which you can withdraw or borrow against in case of emergencies.

Manageable premiums

Because final expenses coverage is designed for funeral and burial costs rather than large lifetime coverage, the monthly premiums tend to be more budget-friendly than traditional life insurance policies.

Flexible coverage

Whether you want to cover funeral expenses for a traditional funeral, a modest memorial service, or a cremation, you can choose a coverage amount that suits your needs.

No payments after 90 years of age

Some final expenses plans might allow you to stop making premium payments after a certain age (often 90) while your coverage remains in place for the remainder of your life.

Protect your loved ones with final expenses insurance

It's tough to think about end-of-life arrangements. But planning ahead is a practical way to help those you care about. Having a final expenses insurance policy can go a long way toward lessening the emotional and financial pressure on your family, allowing them to focus on celebrating your life rather than worrying about funeral expenses or immediate bills.

Choosing the right policy means considering your burial wishes, preferred funeral service, and financial security. Open conversations about your final arrangements can also smooth the process and prevent misunderstandings down the road.

Get a free quote

If you're ready to explore final expenses insurance or are looking for final expenses coverage, get a free quote for FiftyUp Final Expenses Insurance. With a streamlined application, you can learn how a policy like this can offer peace of mind and cover you for all your final needs.

It's time to take the first step towards protecting your loved ones by planning ahead – ensuring they have the financial support they need when it matters most.