Final expense life insurance is a small life insurance policy designed to cover the end of life expenses – like the cost of a funeral and remaining medical bills.
You will also see final expense insurance called burial insurance. The terms are entirely interchangeable.
Because the face amount (the amount that the insurance company pays to the beneficiary) is significantly smaller than a traditional policy, you’ll pay a fraction of the cost in premiums.
Table of contents
- Quick Summary
- Why Final Expense?
- Burial Insurance For Marijuana Users
- Top 3 Final Expense Companies Who Approve Cannabis Consumption
- Best Guaranteed Issue Final Expense Companies
- Pros & Cons of Final Expense
- Final Expense for Seniors
- Final Expense For Parents
- How Marcan Insurance Can Help
Final expense is a smart way to cover the often sudden cost of a funeral. It’s a popular option for adult children caring for aging parents and aging parents who don’t want to burden their children with the cost of the funeral, burial, or cremation.
We listed the three best companies below for both recreational consumers and medical cannabis patients.
Why Final Expense?
Insurance companies created this type of policy to cover people doing end-of-life planning. Specifically, they designed it for people who do not want their children to bear the cost of their memorial services.
Life tends to throw emergencies our way when we’re trying to save up. Putting a small amount each month toward this goal makes it easier for seniors living off their retirement nest eggs.
The average cost of a funeral in the United States is $10,000. Oddly enough, it’s the same whether you choose burial or cremation.
Burial Insurance For Marijuana Users
Even with recreational legalization in many states, most insurers won’t issue a policy to someone with THC in their system. Thankfully, nobody has told them about the wonders of CBD oil, or they’d probably get stuffy about that too.
The good news is many companies are adjusting to the times. Change means there are some prevailing myths that need to be addressed.
Several are taking the “let’s just not ask” approach. Others are setting guidelines about how frequently you can smoke/vape/eat cannabis products without penalty.
For medical marijuana users, it’s entirely different. You still need to get a policy from a company that accepts marijuana use, but they won’t charge you based on how many times a week you smoke. They treat medical marijuana just like any other medication.
Noting the cannabis, they’ll ask you all the standard questions about the condition you’re using it to treat. This will determine your premiums for burial insurance, not marijuana.
Top 3 Final Expense Companies Who Approve Cannabis Consumption
Final expense is trickier to get than life insurance with recreational marijuana. There are fewer companies that offer it. Even then, it’s not the few companies that will approve life insurance with cannabis.
The following three companies will all issue burial insurance to anyone who smokes marijuana – provided you qualify for their other restrictions, like age.
Sentinel is our favorite because it’ll issue a fully underwritten policy for recreational marijuana.
They offer three types of final expense policy:
- New Vantage I – Immediate benefit
- New Vantage II – Graded Benefit
- New Vantage III – Modified Benefit
New Vantage I is the standard form of final expense policy. The other two pay the beneficiary less than the face amount in the first two years, only delivering 100% when the insured has held the policy for at least three years.
However, if the cause of death is an accident, both New Vantage II and III will pay the full face amount.
Anyone from birth to age 85 can qualify for New Vantage I. They offer up to $35,000 until age 76, where it drops to $25,000. Then it drops again to a maximum of $15,000 for applicants aged 81 to 85.
The other two Sentinel options begin issuing policies at age 45. The face amounts max out at $20,000 until age 81, where it drops to $15,000.
None of the three types of policies require a medical exam.
For medical marijuana, you will have to list it under the prescriptions in the health information section of the app. The reason we like them for recreational consumers is they don’t ask at all about drug use.
Royal Neighbors of America
Royal Neighbors of America offers two versions of their final expense policy – level and graded benefits. Level means that your beneficiaries will always receive 100% of the benefits.
Graded benefits change depending on how long you own the policy. Royal Neighbor’s schedule is below:
- 1st year – 30% of the benefits
- 2nd year – 70% of the benefits
- 3rd year – 100% of the benefits
One of the best things about this policy is its underwriting guidelines for diabetics. They offer policies in many cases with little, if any, extra premiums. They also don’t have limits on their height and weight guidelines.
The simplified underwriting process only asks nine questions, and the policy can be approved over the telephone. They do not ask about marijuana use at all, so it does not affect their underwriting decision or your rates.
Royal Neighbors of America has one rider for their final expense policies, accelerated living benefits. However, they only issue it in some states. It means you can get up to 75% of your benefit amount upon being diagnosed with a qualifying condition. They don’t charge any extra premium for this.
Prosperity has two types of final expense policies. Neither application asks about marijuana consumption, so we recommend going with the traditional final expense policy over the guaranteed issue.
Final Expense – New Vista
The new vista policy has no medical exam and only a few medical questions on the application. The benefit options range from $1,500 to $35,000 and are available to anyone ages 50 to 80. This is one of the smallest benefits available in the final expense market.
One of the major drawbacks is Prosperity cannot issue the policy to residents of CT, DE, DC, HI, MT, ND, or SD.
Prime Term 100
Prosperity offers Prime Term as a guaranteed issue final expense. It’s more complicated than their level policy. First, it’s a 20-year term, up to age 100. After the 20-year term expires, you can keep the policy in force, but the benefits will decrease each year until age 100. The premiums remain level the whole time.
They also have graded benefits for the first three years of the policy. The maximum benefit is also slightly smaller than the New Vista policy, at $30,000.
Best Guaranteed Issue Final Expense Companies
Guaranteed Issue life insurance does not ask any health or lifestyle questions. Drug use is not asked about at all. However, these policies have a waiting period before the full death benefit is paid out from a pre-existing condition.
Accidental deaths are paid out from day 1. You should expect to live for at least two years (hopefully more) before considering one of these guaranteed issue options.
AIG is a guaranteed issue final expense policy. That means you have to survive at least two years before your beneficiaries can claim the full face amount. If you pass within the first two years, AIG will pay your beneficiary the premiums paid plus an extra 10%.
They start issuing the whole life policy at age 50, up through age 80. You can get up to $25,000 in benefits. The low end bottoms out at $5,000.
The application is super short. Plus, it’s guaranteed issue, so everyone is accepted.
Gerber also offers a guaranteed issue final expense policy to anyone between 50 and 80 years old. Like AIG, the benefits offered range from $5,000 to $25,000.
They don’t ask and don’t look into your medical history. It’s a good option for both recreational and medical cannabis consumption. The application is so short that you can do it while dinner is on the stove. The application can be completed over a 15 minute phone call.
Great Western Insurance Company is unique in that they will accept clients 40 years of age and older.
The benefits and grading are standard. You can choose between $1,000 and $40,000 in benefits. If you pass within the first two years of owning the policy, they pay your beneficiaries 110% of the premiums paid, except in cases of accidental death.
They include an accelerated death benefit rider, which pays a one-time lump sum upon diagnosis of a terminal illness.
However, here is the interesting part. They include a cash value accumulation on the policy. They also have an optional child/grandchild rider for $1 a month, which pays a $2,500 one-time lump sum if a dependent child or grandchild passes.
They also have an offshoot of the GI plan called Assurance Plus. This asks three health questions (none of which ask about marijuana) and increases the benefits by 25% if you answer no on all of them.
Great Western is not available in all states.
Pros & Cons of Final Expense
Not every family will benefit from a final expense policy. If your estate can easily cover any final expenses, then it makes more sense to keep that money invested.
Burial insurance can help cover expenses that you don’t want to pass on to your children. It’s one of the lowest cost policies you can get because the benefit is smaller than other types of life insurance.
Most companies will allow up to $50,000, which is enough to cover the majority of funeral expenses and leave something behind to any loved ones.
The lowest cost policies are not guaranteed. You still need to answer medical questions that may disqualify people in poor health.
It’s also not a replacement for a traditional life insurance policy.
Estate planning gets absurdly complicated. If you explain your goals to your insurance agent, they can point you in the right direction. It’s also wise to consult a financial planner or estate lawyer since you’ll pay them a flat fee regardless of what type of insurance is right for you.
Is Final Expense Worth it?
For most families, it can be a great help if there is no other life insurance in place. It prevents your children from finding themselves surprised with over five figures in expenses.
Many adult children get final expense insurance for their parents as a precaution for this exact scenario.
Final Expense for Seniors
Insurance companies rarely offer burial insurance for young people. They specifically designed final expense for estate planning where there is little left over to pay for a funeral or any final medical bills.
The issue age typically starts around 50 and goes up to 85. Sentinel’s policy we detail above is one of the exceptions to the rule.
However, if you’re under 55 and looking for a small life insurance policy, it may be a wiser financial decision to look into more traditional forms of life insurance.
Final Expense For Parents
You can purchase a final expense policy to cover your parents. However, it’s not something you can do without their knowledge. They’ll need to fill out and sign the application unless you have power of attorney.
Make sure to avoid naming different people for the owner, insured, and beneficiary. The IRS can make life difficult in these situations. The smart thing to do is to name yourself as both owner and beneficiary.
Sentinel is by far the best option. If you’re relatively healthy for your age, it doesn’t make sense to go anywhere else. That being said, it’s always smart to compare rates in case things change. Use the life insurance quoter on this page to compare rates from the leading final expense companies.
Sentinel, AIG, and Gerber all offer robust policies that purposefully omit questions on marijuana use. They can’t penalize what they don’t want to know.
How Marcan Insurance Can Help
We’re a small group of independent life insurance agents dedicated to helping families get the coverage they need at the lowest cost. The insurance industry still puts hurdles in the way of applicants for both recreational and medical marijuana.
We make it our mission to keep track of which companies are shifting policies to get with the times. This way, you can pay as little as possible for this financial safety net for your family.
If you have any questions whatsoever, please give us a call at 888-987-8447. There is never any obligation to move forward, and your call is 100% confidential.