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Life Insurance vs. Final Expense Insurance – What’s The Difference?


A person’s obligations change dramatically as they age. They no longer have to worry about supporting a young family or making mortgage payments. Nevertheless, you always have financial obligations that must be safeguarded, and the best part is that you have the means to do so.

Over the previous two decades, the amount of debt held by those over 70 has climbed by 543%, reaching $1.1 trillion, as reported by the Federal Reserve Bank of New York. Likewise, the debt of individuals in their 60s (including mortgages and car loans) increased by 471% and reached $2.4 trillion during the same timeframe.

Many retirees still have significant financial obligations, such as car loans, credit card payments, or even student loans, so preparing for the future is important. You can protect your loved ones from the burden of paying for your funeral, other final expenses, and other debts with final expense insurance.

The person or organization you designate to receive the funds can use them however they see fit. This brings us to the question, what are the differences between final expense insurance and more conventional life insurance? Let’s take a look.

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What Are The Differences?

If something were to happen to you and your loved ones, traditional life insurance would help. There are two primary kinds: temporary and permanent. Term insurance policies are a cost-effective way to get coverage for a while that you choose, usually between 10 and 30 years.

The cash value component of permanent plans is guaranteed to be available to you at any moment throughout your lifetime, and the coverage period is likewise permanent. Many individuals in their youth purchase life insurance to help their loved ones replace lost income, meet ongoing living costs, and save for the upcoming years in the event of their untimely death.

Funeral and other end-of-life expenses are covered by last expense insurance, often called burial insurance. These days, it’s not uncommon for funerals to cost upwards of $10,000. Having a final expense policy in place relieves your loved ones of the burden of coming up with the money for these costs at a difficult time in their lives.

A final expense compensation can be used for your family’s needs, including paying off debts or leaving a bequest to your children or grandchildren. Final expense plans are a form of permanent insurance that will continue to exist even after you pass away, giving your loved one peace of mind that they will have the resources they need to deal with the financial fallout of your passing.

How Do You Know Which One Is Right For You?

Some considerations that should be made while selecting the best life insurance policy for you are:

1. Your Age

Buying a traditional policy when you’re young and healthy usually results in lower premiums and simpler underwriting. However, because the final expense insurance was designed for the elderly, you can apply for insurance far into your 80s without worrying about being turned down. That’s why Franklin Life & Annuity is devoted to providing retirees with a wide range of insurance plans to meet their needs.

2. Your Financial Obligations

If you still have extra expenses after paying off your mortgage, such as college tuition or support for the elderly or disabled family, life insurance may be your better choice. Due to their intended purpose of covering funeral and burial costs, final expense policies typically offer less coverage.

3. Your Health

If you’re experiencing health problems, final expense insurance could be better than standard life insurance.

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Choose The Right Life Insurance Agency!

Having final expense insurance, often referred to as funeral insurance, can alleviate stress in your ultimate years so that you can focus on spending time with loved ones rather than worrying about leaving a financial burden for them.

Before beginning the application process, you should give some thought to the funeral you desire and the costs your loved ones may face in your absence. The proper level of coverage can be determined by totaling all of these costs, including funeral costs of any kind.

That’s why it’s important to choose the right final expense insurance agency, and who better than Franklin Life & Annuity for it? We are one of the providers of life insurance in Houston and have helped many secure the right life insurance policy. Contact us today to get quotes on our life insurance offerings in Houston, Texas.

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