What Is Final Expense Insurance? (An Ultimate Guide)

Written by Matthew King, time it takes to read this article is  minute(s).

When looking to begin or advance your insurance sales career, adding on the sale of final expense insurance for seniors is an excellent way to boost your sales in a never-ending job market.

What is final expense insurance? The short answer is insurance which makes sure there are funds allocated and available for your family to use in preparing for your funeral and burial.

If you haven’t priced a funeral, burial plot, and headstone, be prepared for sticker shock. The national median cost for a funeral that includes a viewing and burial was $7,640 in 2019. If the cemetery requires a vault the average cost is $9,135.

The pricing above does not include the headstone, cemetery plot, flowers, obituary, or any other add-on expenses.

This is just one of many selling points that make becoming an agent seniors find when searching for “final expense insurance near me” a lucrative business move. Keep reading for everything you need to know about this unique insurance policy.

What Is the Difference Between Final Expense Insurance and Funeral Expense Insurance?

When working with senior citizens, you will want to convince them that purchasing funeral expense insurance is an important part of their overall insurance plan. These policies usually have a death benefit of $5,000 to $25,000 and provide financial security for their family to cover funeral and burial costs once they pass.

The advantage of this over a prepaid funeral is there is no risk of the funeral home going out of business between when the funeral is bought and when it is actually held, which could be years. Funeral expense insurance policies usually only cover the cost of the funeral and the beneficiary is usually the funeral home.

With final expense insurance, the purchaser of the policy selects the beneficiary and that person selects the funeral home, cemetery, headstone, etc. The beneficiary may also use the funds to pay any remaining outstanding debt of the deceased.

The ability for the beneficiary to determine the what, when, where, and how of the funeral is what makes final expense insurance an excellent choice.

Funeral Insurance Key Factors:

  • Only covers burial and funeral expenses
  • Funeral home is beneficiary
  • Specific arrangements are locked in at the time you purchase a policy
  • Once a plan is purchased benefit amount remains the same
  • You may not borrow against the balance

This policy definitely limits the purchaser by forcing them to make choices that they are unable to change.

Final Expense Insurance Key Factors:

  • Covers a variety of final expenses including burial, funeral, and outstanding debt
  • Purchaser selects beneficiary
  • Arrangements remain flexible for beneficiaries, but the purchaser may indicate their wishes
  • Balance may be borrowed against

Final expense insurance provides the purchaser and their decedents with more control in funeral arrangements and how the money is best used.

Why Your Client Needs Final Expense Insurance

Final expense insurance policies are available to clients over the age of 50. During the next 20 years, more than 12 million people will pass the age of 50. Those 65 and over will increase by 65% by 2030.

Many people assume their life insurance policy will pay for their end-of-life costs. While it can pay off debt, it generally provides an inheritance to decedents.

Life insurance is paid directly to beneficiaries, free and clear of any obligation to pay debt or expenses of the decedent. It also may payout later than needed to pay the costs of a funeral and burial.

When providing a final expense insurance quote you can assure the client that these policies are low-cost and easy to qualify for. There is no waiting period, and it will provide their family with peace of mind that they can provide a proper funeral without going into debt.

Final Expense Insurance Quick Facts

These quick facts will help clients understand the benefits of final expense insurance:

  • Policies are available for as little as $10 per month
  • Premium never changes
  • You only pay a premium until you reach age 100
  • Ability to select monthly or yearly premium payments
  • Anyone 50 or older may purchase
  • The policy never expires as long as premiums are current

The final benefit is that the client does not have to lock into a specific funeral home or arrangement. Their designated beneficiary is able to make decisions on the location and arrangements.

How Much Does the Average Funeral Cost?

The average estimate for a funeral in the United States is over $6,000. That average is on the low side. When factoring in all expenses related to giving a loved one a formal send-off, the family will likely spend between $8,000 to $10,000.

The first thing you need to make your client understand is the number of costs their family will incur. The expenses family members encounter when preparing a funeral include:

  • Mandatory Basic Services Fee—$2,195
  • Transfer of Remains to Funeral Home—$350
  • Embalming—$750
  • Preparation of Body—$255
  • Use of Funeral Home for Viewing—$425
  • Use of Funeral Home for Funeral—$500
  • Hearse—$340
  • Service Car or Van to Transport Family Members—$150
  • Basic Printed Memorial Package—$175
  • Metal Casket—$2,500
  • Vault—$1,495

This brings the average expenses payable to the funeral home with burial in a vault to $9,135.

If the family opts to purchase a mahogany, bronze, or copper casket, the cost for that item alone can be as much as $10,000.

If the family chooses to do an immediate cremation without a viewing or casket, the cremation fee averages $350, and the urn for ashes $275. A cremation casket is about $1,000 and holds the body when it is placed into the cremation chamber.

Additional Expenses

In addition to the costs shown above, there are other costs the family will encounter, which include:

  • Funeral Plot—$1,000 to $4,000
  • Headstone—$250 to $6,000
  • Casket Flowers
  • After the ceremony, gathering, and food

When presented to your client this information will help them understand how important purchasing final expense insurance is. Insurance provides them and their families peace of mind that they will be able to afford a proper ceremony.

When you consider that 40% of Americans find it difficult to come up with $400 for an unexpected expense, it becomes clear why this type of insurance is so important.

Final Expense Insurance Companies

When you work as an independent final expense insurance agent, you will be able to contract with a wide range of companies to provide a solid selection of options to your clients. InsuranceSales101 will provide you with training and discounts from various final expense insurance companies so you can provide your clients with the best pricing available.

This popular insurance is available from a wide range of companies across the country. This makes selling wherever you live easy. Final expense insurance companies include:

  • AIG
  • Aetna
  • Americo
  • Foresters Financial
  • Gerber Life Insurance
  • Great Western Insurance Company
  • KSKJ Life
  • Liberty Bankers Life
  • Mutual of Omaha
  • Oxford Life Insurance Company
  • Royal Neighbors of America
  • Sentinel Security Life
  • Transamerica
  • And many more

With the training, you receive at InsuranceSales101 and the resource material we provide, you will quickly be on your way to a lucrative career selling final expense insurance.

Easy to Sell in Person or Over the Phone

When you sell final expense insurance, you have a guaranteed market of people aging into the appropriate age frame of 50+ every month. You can also tap into those who are older and have not yet been told about this wonderful product.

Many agents build a rapport with clients by making contact over the phone. This personal contact is often welcome with the older generation of clients.

By making repeated telephone contact with each client, you are working your way toward acceptance. This is because about 60% of people say no four times before they say yes.

With 48% of salespeople never making any follow-up calls to potential clients, they are losing out on a market you can capture.

Whether you are selling over the phone or making an in-person sales call, make sure you have a perfect presentation. This includes knowing your product and how it benefits your client, plus building a personal bond with them.

Ask your potential client questions and find something you can connect with them on. This can be anything from an interest in fishing, a love of travel, or a love of gardening. It doesn’t matter what; the important thing is to make them feel you value them as a person.

By building those bonds and using other techniques you learn in your training on how to sell final expense insurance, you will move into top-selling status quickly.

According to Indeed.com, a final expense insurance agent averages $83,139 per year, while an insurance manager averages $103,146 per year in the United States. This is 27% above the national average.

Acting on the Answer to “What Is Final Expense Insurance?”

Now that you know the answer to “What is final expense insurance?” and how lucrative this type of insurance sales can be, you will want to get started moving your career forward.

InsuranceSales101 can help you jumpstart your final expense insurance sales career with our step-by-step agent training and support.

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