Term Life insurance

Term life insurance is a type of life insurance policy that provides coverage for a certain period of time, or a specified term of years. If the insured dies during the time period specified and the policy is in force, then a  death benefit will be paid. Term insurance is initially much less expensive compared to permanent life insurance, such as whole life and universal life. This is because it’s not designed to last through old age, which is when life insurance premiums are the most expensive. Unlike most types of permanent life insurance, term life insurance has no cash value. Term is a good solution if the coverage is only needed for a certain period of time, like a mortgage for instance.

 Universal life (UL) insurance is a type of permanent life insurance that, like other permanent insurance, has a .cash value element and offers lifetime coverage as long as you pay your premiums. Unlike whole life insurance, universal life allows you to raise or lower your premiums within certain limits, and it can be cheaper than whole life coverage. However, if your investments underperform or you underpay for too long, it could affect your death benefit or cause your policy to lapse.

 Whole life insurance provides coverage throughout the life of the insured person. In addition to paying a tax-free death benefit, whole life insurance also contains a savings component in which cash value may accumulate. Interest accrues on a tax-deferred basis.

Final expense insurance is a whole life insurance policy that has a small death benefit and is easy to get approved for. Final expense insurance is also called funeral insurance, burial insurance, simplified issue whole life insurance, or modified whole life insurance. All relate to small whole life policies with a face value (and death benefit) of $2,000 to $35,000.

There is no difference between final expense insurance and life insurance, other than the fact that insurers sell the smaller final expense insurance policies to make it more affordable.

Final expense insurance has a death benefit designed to cover expenses such as a funeral or memorial service, embalming and a casket, or cremation. However, beneficiaries can use the death benefit for any purpose, from paying property taxes to taking a vacation.

Some people already own existing life insurance policies that can go toward paying final expenses and they don't really need another policy. Another situation where final expense insurance may be redundant is if someone has already prepaid their funeral expenses.