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Final expense insurance

Final expense insurance, also known as burial insurance, offers permanent insurance coverage for various costs associated with your death, such as funeral expenses, settling debts after your death, doctor bills, mortgage payments, car loans, legal expenses and education costs for your children.

Like all life insurance plans final expense insurance allows you to accumulate cash value on a tax-free basis. But with this policy you pay a fixed premium even if your health deteriorates, part of which goes into insurance coverage per se and administrative expenses and the other part is directed towards cash value.

Unlike term life insurance which normally provides coverage for a specified period of time, final expense insurance is valid until you die or until you turn 100 years old. One more distinctive point of difference is that the face amount on final expense insurance is usually lower than on term life insurance. Besides, final expense insurance does not require you to take a medical exam.

The basic types of final expense insurance include single premium, limited pay and life pay depending on the regularity and the amount of the premium paid to keep the corresponding policy.