Permanent Life Insurance

• Final-expense policies are nearly always permanent life insurance policies. Most final-expense products are little more than ordinary whole life or universal life policies with low face values.
  
  

Face Amount

• The majority of final-expense life insurance policies offer face amounts, the sum of money your beneficiaries receive when you die, in the range of $10,000 to $20,000. Final-expense products are not intended to replace lost income or leave a legacy, but rather to simply ensure that your family does not have to struggle to find money for your funeral.
  
  

Guaranteed Policy Issue

• Many life insurance products marketed as final-expense policies require little to no underwriting. Since the face amounts are typically small, insurance carriers often forgo intense and exhaustive analysis of these policies. To account for the increased liability of issuing coverage to nearly anyone who applies, insurance companies increase policy premiums to offset the added risk of potentially insuring an unhealthy or otherwise uninsurable person.
  
  

Graded Benefits

• Just as insurance companies increase premiums to offset the cost of possibly covering an extremely unhealthy person, some carriers choose to sell "graded" benefit products as final-expense policies. Graded benefit life insurance contracts stipulate that if your death occurs within the first few years after purchasing coverage, your heirs will receive a reduced payout. Your death benefit will increase to the full requested amount only after your policy has remained in force for a specified number of years, typically between two and four.