Final Expense life insurance, sometimes called burial or funeral insurance is much like any other life insurance in that you can get in a wide range of coverage amounts. Sometimes coverage is as low as $1000 up to $50,000. Final Expense policies are mostly simplified issue whole life. There are also Graded and Guaranteed Issue policies as well. Premiums are level for life so no surprises later in life. This is one thing you must watch. You don’t want higher costs when older.

Simplified Issue

Simplified Issue means that underwriting on these types of policies are “simplified” and no medical exams are required. Usually an application has medical questions that determine the level of coverage you can get. The underwriter will also run a MIB (Medical Information Bureau) and prescription check to see what kind of health history you might have. Even if you’ve had some health issues or medications you may still qualify for a plan. With this type of policy, you have immediate 100% coverage.

Graded Policies

A graded policy is a byproduct of the simplified issue application. The application is usually broken up into sections. If answers disqualify you from a certain section or two but not all you may be eligible for Graded. Graded works something like this: 30% face value coverage for first year, 70% face value coverage 2nd year and 100% coverage 3rd year and beyond.

Guaranteed Issue

Guaranteed issue policies can be issued even with serious health issues. Policies are a little more expensive but are good for those with no coverage. Many of these policies will only payout what premium you paid in plus interest if you die within first two years (called ROP or return of premium). Full benefit is paid 3rd year and beyond.