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What is the Difference Between Term Life Insurance and Final Expense Insurance?

As life happens and you get married, buy a home, or have kids, it is important to help protect your loved ones from financial hardship. Nowadays, the average cost of a funeral is around $7,800, and the average cost for cremation is $6,200.1,2 It may be beneficial to know what options are available, in order for your loved ones to not worry about the financial consequences of your untimely departure.

There are many ways you can help cover funeral cost; two specifically are term life insurance policy and final expense insurance.

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Nowadays, the average cost of a funeral is around $7,800, and the average cost for cremation is $6,200.1,2

What is term life insurance?

Term life insurance ensures your loved ones continue to receive income after you pass away. The policy only pays out if death happens during the term of the policy.3 Therefore, term life insurance helps assure beneficiaries their lifestyle and financial goals won't change if they pass away during the term of the life insurance policy.

What is final expense insurance?

Final expense insurance is typically a whole life insurance policy that can help cover funeral costs, any debt left behind, or income replacement while your family deals with your loss.4 Your final expense insurance remains active for your entire life, if you pay your premiums on time. In other words, as long as you continue to pay your premiums, your designated beneficiaries will receive the stated death benefit.

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What is the difference between term life insurance and final expense insurance?

Term life insurance helps you feel at ease that your loved ones will continue to have some sort of income as you pass away.

  • Provides death benefit payment protection for a period of time or also known as “term,” which is usually one to 30 years.
  • A stated death benefit is paid if the insured person dies during the specified term of the policy.
  • Many people purchase these policies at a certain point in their lives, such as after purchasing a new house, getting married, or welcoming a new addition to the family.

Final expense insurance (also known as burial insurance) can help cover outstanding expenses and funeral costs following the death of an insured.

  • Can help cover funeral expenses as well as any medical expenses, potential legal costs, and other expenditures.
  • It is an appealing policy for seniors searching for a way to protect their families from funeral costs.

Can final expense or term life insurance be right for you?

It may be a challenge to find a life insurance policy tailored to your age, financial situation, and coverage goals. Contact a licensed local insurance agent to help you discover the right life insurance policy that fits your needs.


  1. Nfda.org, Statistics, accessed February 2022
  2. Debt.org,Burial Funds & Programs That Help With Funeral Costs, accessed February 2022
  3. III, What are the principal types of life insurance?, accessed February 2022
  4. Investopedia.com, Final Expense Insurance, accessed February 2022
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Author: By the Globe Life Staff

Globe Life articles are researched, written, and edited by multiple members of the Globe Life staff including, Marketing Specialists, Content Writers, Product Experts, as well as Legal & Compliance Professionals.

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