How Much Does Final Expense Insurance Cost?
Final expense insurance is a type of life insurance that is specifically designed to cover the costs of a person’s final expenses, such as medical bills, debt, and funeral costs. This type of insurance is an excellent option for those who want to ensure their loved ones are taken care of financially after they pass away.
The cost of final expense insurance varies based on several factors, including age, health, sex, coverage amount, and life insurance company. On average, the cost ranges from $40 to $80 per month. However, those who are over 70 years old or have significant health conditions may see higher premiums, which can range from $80 to $120 per month. Younger applicants who are in good health may be eligible for rates in the $20 to $50 range.
It’s important to remember that a cheaper rate usually means fewer benefits and features for surviving loved ones. It may be worth spending a few extra dollars each month to ensure that your family is adequately supported after you’re gone.
Medical Bills
With the current state of the healthcare industry, medical bills can quickly add up, especially in the last year of life when many people require chronic care, hospitalization, and hospice care. Although Medicare and Medicaid cover most healthcare expenses for the elderly, they still may not fully cover all expenses. According to the National Bureau of Economic Research, Medicare and Medicaid only cover about two-thirds of elderly healthcare spending.
In 2019, over 80% of the 2.85 million people who died in the U.S. were on Medicare before they passed away. On average, Medicare paid $153 per day, per person, for hospice care in 2016, but patients may still be responsible for co-payments, prescription drugs, and other end-of-life expenses. Final expense insurance can help protect loved ones from the financial burden of paying off any outstanding medical bills.
Debt
According to research from Experian FileOne and Credit.com, 73% of Americans die in debt, with an average total balance of $61,554 (including mortgages). Unfortunately, this debt does not disappear, and the estate must pay off as many debts as possible before any assets are distributed to surviving family members.
The average breakdown of consumer debt is as follows:
- Student Loans = $25,391
- Auto Loans = $17,111
- Personal Loans = $14,793
- Credit Card Debt = $4,531
Final expense insurance can help cover these costs, especially when families are not aware of the debt and expect their loved one’s estate to cover the funeral or other final expenses.
Funeral Costs
Funeral and cremation expenses can cost families thousands of dollars, often within days of their loved one’s passing. In 2017, the median cost of an adult funeral with viewing and burial was $8,755 (including a vault). Casket prices alone can range from $2,000 to more, depending on the material and style used. Simply opening and closing the grave can cost anywhere from $300 to $1,000, depending on the funeral home.
Final expense insurance, also known as burial or funeral insurance, is designed to cover these costs. The rising costs of funerals have been well-documented over the years, with the average cost of a funeral without a vault in 1960 being just over $700 and rising to $9,420 in 2021, including a vault.
In conclusion, final expense insurance is an excellent option for those who want to ensure their loved ones are taken care of financially after they pass away.