The final expense insurance is a specific type of insurance coverage, where the death benefit amount helps pay for life end expenses. Several insurance companies offer insurance for final expense policies with various payouts and premiums.
Year after year, the burial expenses have increased. You need to ensure the insurance proceeds are adequate for life end expenses. Here we have explained the average cost of final expense insurance.
What Is the Average Cost of Final Expense Insurance?
The average cost of final expense insurance is $50 per month. This premium assures the beneficiary an $10,000 after the insured person’s death. However, the death benefit is not always the full face amount assured. It relies mainly on factors like the type of policy, type of policy issue, restriction period, and the kind of death of the insured (accidental death or death by natural ways).
Factors That Determine the Cost of Final Expense Insurance
To understand how much your final insurance would cost, you need to understand the different factors considered by insurance companies.
Gender plays a vital role in the cost of the final expense policy. In most policies, men will have higher monthly premiums than women. But, in Montana, the state regulations require insurance companies to levy the same premiums for men and women. Why women have lower monthly premiums is because they live longer than men on average.
The applicant’s age is the 2nd most crucial factor in determining the insurance for final expense policy costs. The insurance companies have different pricing for seniors aged 50, 51, 52, and so on. Some insurance companies have age bands for pricing. For example, the age band 50-55 will have a specific price, while the 55-60 age bands will have different pricing.
A general rule followed by insurance companies is higher the age, more the monthly premium. If you applied for the final expense quote at 55 instead of 50, you would have a higher monthly premium. So to keep the costs low, you need to apply for the final expense policy earlier.
The final expense policies are broken into 2-3 risk categories – Low, Medium, and High Price. Insurance consultants use words like Rating or Preferred to describe the lowest risk ratings. Graded or Standard terms describe medium-tier rating. Modified is the word used to describe the high and riskiest grade in the insurance for final expense.
The lowest risk level will have the lowest monthly cost. The highest risk level will have a higher monthly fee. In the end, your health classification helps determine the risk level for your policy. The health factor influences the cost of insurance for the final expense heavily.
- Tobacco Status
Insurance companies offer a lower cost final expense policy to non-smokers. Smoking is a significant health risk. Hence, insurance companies require smokers to pay higher costs to obtain burial insurance.
- Amount of Coverage You Select
The general face amount of final expense policy is $10,000. However, insurance companies also offer insurance policies with a face amount greater than $10,000. The amount of coverage you select also determines the cost of the insurance. A smaller coverage amount would keep the insurance costs low. A higher amount of coverage will increase the value of final expense insurance.
The funeral costs are increasing every year, and $10,000 is not always adequate. A lower death benefit amount can increase the financial burden of the family members.
You can always take final expense policy with higher face amounts to ensure it is adequate to cover your life end expenses. However, you need to take into consideration monthly costs before opting for higher coverage.
The Average Cost for $5000 Insurance Coverage
Some insurance companies also offer $5000 final expense coverage. The average monthly cost of $5000 face amount is given below:
- A 50 years old woman without tobacco habits would have to pay $13.94 per month towards the insurance premium.
- A 50 years old woman with smoking history would have to pay $16.97 per month towards the premium.
- A 50 years old man without tobacco habits would have to pay $16.18 per month towards the insurance premium.
- A 50 years old man with a smoking history would have to pay $20.05 per month towards the premium.
The information given in the post gives you a clear idea about the average cost of the final expense policy. For the best burial insurance, request quotes from all insurance providers and select the one that fits in your budget.