Final expense insurance cost by age: what changes the price

Final expense insurance costs more the older you are when you buy it, because the insurer expects to pay the benefit sooner. Your age at purchase, the benefit amount, whether the policy asks health questions, and tobacco use set most of the price. With whole life coverage, the premium you start with often stays the same for life, so the age you buy at keeps mattering.

What changes the price

Your age when you buy

Life insurance is priced on how long the insurer expects to collect premiums before it pays a claim. Each year you wait, that expected time gets shorter, so the same benefit costs more. Most final expense policies are sold within set age ranges, and some stop issuing new policies past a certain age. Ask each insurer what its oldest issue age is.

The benefit amount

The premium rises with the size of the benefit. A policy sized to a cremation will cost less than one sized to a burial with a vault and headstone. That is why the worked example below starts with real funeral numbers instead of a round guess.

Health questions, or none

A policy that asks health questions lets the insurer price you on your own health. A guaranteed issue policy asks none and charges for the added risk. New York's Department of Financial Services requires applications for graded death benefit policies issued between ages 50 and 75 to state that, with minimal or no medical underwriting, the premium includes an extra mortality risk charge, and that a person healthy enough to qualify as a standard risk would likely pay less for a fully underwritten policy. See guaranteed issue life insurance for how those policies limit the benefit in the first two or three years.

Tobacco

Insurers that ask health questions usually ask about tobacco and price smokers higher. Answer honestly. The Texas Department of Insurance explains that life insurance policies have a two-year contestable period, during which the insurer can review your application for wrong or missing information if you die.

A rate set at purchase

Final expense insurance is whole life coverage, which TDI describes as staying in effect for your entire life unless you cash the policy in or stop paying premiums. Many whole life policies set the premium when you buy and keep it level. If yours does, the age you buy at sets the price for as long as you hold the policy. Ask each insurer, in writing, whether the premium can ever change.

A worked example: sizing the benefit

Start with what a funeral actually costs, then subtract what will already be paid.

The National Funeral Directors Association's latest General Price List Study put the national median cost of a funeral with viewing and burial at $8,300. A vault, which the FTC notes many cemeteries require, had a median of $1,695, for a total of $9,995. A funeral with viewing and cremation had a median of $6,280.

Social Security pays a one-time $255 lump-sum death payment to an eligible surviving spouse or child, according to SSA.gov.

Those medians leave out the cemetery plot, opening and closing the grave, a headstone or marker, flowers and an obituary, NFDA notes. For burial, add the cemetery's own prices. As a hypothetical, if a local cemetery quoted $3,000 for a plot, opening and closing, and a flat marker, the burial total to cover would be $12,740.

Prices keep rising after you buy, and most final expense benefits are a fixed amount. NFDA's burial median rose 5.8% between its last two studies, from $7,848 to $8,300, and the cremation median rose 8.1%. If you are buying a policy you expect to hold for many years, leave some room above today's figure.

Finally, subtract what you already have. Savings set aside for the funeral, an existing life insurance policy, or a prepaid funeral contract all reduce the benefit you need. The remainder is the amount to ask for on each quote, and asking for that same amount everywhere lets you compare prices side by side.

Prices also differ by region. In NFDA's latest study, the Pacific region (Alaska, California, Hawaii, Oregon and Washington) had a burial median of $7,835 and a cremation median of $5,812. Our funeral costs guide has the full breakdown and the price-list rights the FTC gives you.

Checklist for comparing quotes

• Ask for the same benefit amount on every quote.
• Write down whether each policy asks health questions, and which ones.
• Note the length of any graded or waiting period and what it pays during that time.
• Ask whether an accidental death is paid in full from the start.
• Confirm whether the premium is level for life or can change.
• Ask how long premiums are due, and what happens if you miss one.
• Check the free-look period; TDI says Texas policies have one of at least 10 to 20 days.
• Check the oldest and youngest issue ages.
• Name a beneficiary and a backup on the application.
• Get every answer in writing before you pay.

The free Final Expense Cost Guide includes a fill-in version of this worksheet. Get the free guide, or call us at (888) 410-2975 to talk through the numbers.

Frequently asked questions

Why does final expense insurance cost more as I get older?

An insurer prices a policy on how long it expects to collect premiums before paying the benefit. The older you are when you buy, the shorter that expected time, so the same benefit costs more. With whole life coverage, the premium is often set when you buy, so buying sooner usually means a lower lifelong rate.

How much final expense coverage do I need?

Begin with funeral costs: NFDA's latest study found a median of $9,995 for a funeral with viewing, burial and a vault, and $6,280 with cremation. Subtract the $255 Social Security lump sum and any savings or insurance you already have, then add the cemetery's prices for burial.

Does my premium go up every year on a final expense policy?

Many whole life policies, including final expense policies, set the premium when you buy and keep it level for life. Not every policy works that way, so ask the insurer in writing whether the premium can ever change. The Texas Department of Insurance says whole life coverage stays in effect as long as premiums are paid.

Will smoking change what I pay?

Policies that ask health questions usually ask about tobacco and charge smokers more. Answer honestly, because the Texas Department of Insurance explains that insurers have a two-year contestable period to review an application for wrong or missing information after a death. A guaranteed issue policy asks no health questions but limits the benefit in its first years.

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