What type of insurance policy is typically used to pay for funeral expenses?

Final expense insurance is specifically designed to cover the costs associated with funeral and burial expenses, making it an ideal option for individuals looking to ensure that their loved ones are not burdened with these financial responsibilities upon their passing. It generally offers a smaller death benefit compared to traditional life insurance policies, which aligns with the average cost of funeral services.

While term life insurance provides coverage for a specific period and can offer a larger benefit, it is not exclusively aimed at final expenses. Whole life insurance provides lifelong coverage with a cash value component, but it may have a higher premium than what is typically necessary for just covering funeral costs. Universal life insurance offers more flexibility in premium payments and death benefits but is also not specifically targeted for final expenses. In contrast, final expense insurance is tailored for this particular need, focusing on easing the financial burden of funeral costs for beneficiaries.