End-of-Life “Purpose” insurance seems to be moving toward Pre-Need



When you think of End-of-Life “Purpose” insurance there are two basic types.  First, there is Pre-Need which is generally sold by funeral or cremation providers with the death benefit proceeds going directly to those providers to pay for services that have been pre-planned by the purchasers or their caretakers.


Then there is also Final Expense policies which can be used to pay for funerals and cremations as well as other End-of-Life expenses such as legal fees and more.  These policies generally have the death benefit proceeds paid to family member beneficiaries who then see that those End-of-Life obligations are paid for.  Final Expense policies are most often sold by genaral insurance agents.


This short article that comes to us from ALM Think Advisors uses a recent (June 2023) Life Insurer’s Council (LIC) report to tell us that over the past year it appears that Pre-Need policies are becoming more and more popular as compared to Final Expense policies.  According to the article, of the participating insurers who provided sales data for both the 2021 and 2022 survey years, Pre-Need policies grew by 3% for the year whereby Final Expense policies declined by 5%.


On the order form for the report put out by the LIC, they state that the 14 companies that reported Pre-Need results for the 2022 year totaled sales of $2.032 billion in face value.  They also report that 67% of the policies were single pay policies with 29% multi-pay, and 4% annuities.


Finally, the order form for the report, which you can access here, reports that the average death benefit face amount was $5,314 for single pay, $5,694 for multi-pay, and $4,556 for annuities.

Here is the website for the Life Insurer’s Council (LIC)


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