No one can truly prepare you for the loss of a loved one, but having a plan in place to cover the
immediate financial stressors can ease the burden during the grief process.
The cost of funeral, cremation and burial services can add up rather quickly, which is why many
people choose to obtain final expense insurance as a safety net to cover these costs.
Final Expense Insurance: How it Works
The average traditional funeral with a burial can run anywhere from $5,000 to $15,000 in
Canada.
This includes everything from the funeral service itself to a casket or urn, a burial plot, a
monument and memorial services. While cremation services are slightly more affordable, they
still come with an expense that, if the right coverage is not in place, will fall on the shoulders of
your loved ones.
Often also referred to as burial insurance, final expense insurance is a form of permanent life
insurance that will protect your loved ones from having to cover these costs. It has a small death
benefit and is relatively easy to get approved for regardless of your health or age.
As long as you pay your premiums, it will remain in effect. Your premium will not increase, and
your death benefit will not decrease.
While the intended purpose of final expense insurance is to cover expenses like a funeral,
memorial service or cremation, the chosen beneficiary can use the benefit for any purpose (ie. to
cover outstanding debts, medical expenses, etc).
The Pros & Cons of Final Expense Insurance
Final expense insurance is an especially useful tool for a few different specific demographics of
policyholders.
- Those who have already been denied standard life insurance coverage due to age or
medical reasons - Individuals over the age of 70
- Individuals with a terminal medical condition or a severe/complicated medical history
It is a popular form of insurance for these particular demographics because there is no medical
exam required to obtain final expense insurance, and it provides comfort to those who want to
ease the burden of their final expenses but are unable to get any other insurance due to their
age or medical condition.
With that said, while you will be able to obtain final expense insurance regardless of your age or
medical status, rates increase and the amount of your death benefit can decrease based on
these factors. This means that the payout beneficiaries receive may not cover all of your final
expenses.
So, Is Final Expense Insurance Worth It?
As mentioned, if you fall into one of the three categories listed above, then yes: final expense
insurance is most definitely worth it.
But, if you are in relatively good health, and you are looking for insurance to not only cover your
final expenses but help support financially dependent loved ones, then you would likely get more
out of a traditional permanent or term life insurance policy.
While these policies do require a medical exam and/or access to historical medical records, they
provide significantly more extensive coverage than final expense insurance policies, and the
premiums tend to be lower.
While most final expense or funeral insurance policy coverage amounts cap out around
$50,000, the average life insurance payout in Canada is in the $240,000 to $550,000 range.
This type of policy will cover your final expenses, in addition to helping your loved ones do things
like pay off the mortgage, take bereavement leave, start a college fund, or cover any other
significant expenses that arise in the event of your death
Should I Buy Final Expense Insurance?
Final expense insurance isn’t right for everyone, but it certainly has its place. If you do not qualify
for traditional term or permanent life insurance, are in poor health or are a senior concerned
about your loved ones having to shoulder the burden of your final expenses, then it is worth
talking to a qualified professional about final expense insurance.
As a fully digital life insurance provider, the experts at Easy Insured can compare quotes from
reputable insurers across Canada and help you select the right policy for you, your family and
your business.