Burial insurance is a small-size, guaranteed life insurance policy intended for seniors. It offers lower death benefit amounts than other kinds of life insurance, typically providing up to $25,000 in coverage. The burial insurance proceeds can be used to pay for funeral costs, accounting, and other final arrangements. Qualification is not based on a medical exam.
|Note on insurance terminology:|
|Burial insurance is also known as “final expense insurance” or “funeral insurance.” If you see these terms elsewhere, know that they all refer to the same insurance product. In this article, we use the term “burial insurance.”|
Like other life insurance policies, burial insurance pays out a one-time sum after the insured person passes away. This payment is generally guaranteed, as long as the insured stays up-to-date on their premiums throughout life.
The burial insurance payout is usually between $2,000 and $25,000. That amount is pre-determined at the time the policy is purchased.
With some policies, the burial insurance death benefit can be “assigned” to a funeral home.
This means the policy would directly cover funeral and burial costs. Any funds remaining after the funeral has been paid for would be returned to the policy “beneficiary” (the person named to receive the death benefit).
But a burial insurance policy doesn’t have to be assigned to a funeral home. In fact, it’s not a rule that the benefit has to be used for a funeral or burial at all.
The burial insurance beneficiary can use the death benefit however they need. Many people use life insurance funds to cover:
Remember, burial insurance policies are small compared to other life insurance policies.
Unlike term or whole life insurance, which generally include more than $100,000 in coverage, burial insurance is not meant to provide lasting income after someone passes away.
But it can provide enough coverage to pay for an average funeral, plus a little extra. For people without dependents or a lot of other debt, a small-size burial insurance policy might be just right.
Burial insurance costs vary by person and by company. That’s because each insurer determines cost using its own equation. They all weigh age, gender, and other important pricing factors a little differently.
For example: A 75-year-old man purchasing burial insurance might pay $110 per month at one company, or $135 per month at another.
Below are a few sample rates. These should give you a ballpark idea of how much burial insurance costs for a $10,000 policy¹. But remember, your insurance rate is personal. It will likely differ from what’s shown here.
In general, older customers might be charged up to $200 per month for burial insurance.
This might seem like a steep price to pay, but remember — much of the cost paid-in is eventually returned to the family in the form of a “death benefit” payment.
So really, premiums paid during life are helping to defray costs for a funeral and burial after death.
Take a look at one scenario of how burial insurance costs can play out in the long term:
In this example, the insured person pays $13,000 over the course of 10 years for burial insurance.
But after they pass away, their beneficiary receives a $10,000 payout that can be used to cover burial costs and other end-of-life expenses.
This protects the insured’s family from having to pay thousands out of pocket all at once.
If you’re on a tight budget, paying $100-$200 per month for burial insurance can feel like a lot. Thus, many people wonder where they can find the cheapest burial insurance policy. The answer is: that depends.
As we mentioned above, burial insurance costs depend on both your application and the company you choose to work with.
Rate quotes will vary, so you’ll need to compare personalized estimates from a few insurers to find the lowest-cost policy for you.
|“This is one of those marketplaces where there’s a huge variance [in cost]. So make sure you compare options. There’s no hard-and-fast rule that a company will be competitive for all.” –Tony Steuer, CLU, LA, CPFFE, Author and financial preparedness advocate|
Luckily, burial insurance quotes are easier to get than other life insurance quotes. Most companies will give you a burial insurance quote 100% online. And quotes are always free.
On average, a funeral with burial costs over $10,000. That’s according to 2019 data from the National Funeral Directors Association.
And burial costs can be even higher depending on the services and items selected.
For instance, a casket could cost anywhere from $200 to $11,000 depending on design and material. And average funeral home service fees range from $725 to $5,000.
|Planning and setting aside funds for a funeral during life helps reduce stress and financial strain on families after death.|
That’s why it’s important to plan for a funeral ahead of time. Families without a plan in place are often unable to compare costs from different funeral homes, and can end up overpaying.
Choosing a funeral home and services during life helps reduce stress on the family when a loved one passes.
And with burial insurance or another pre-funded account, there won’t be any question about how to pay for the funeral, either.
Like we mentioned above, a funeral with burial generally costs between $10,000 and $11,000. This high price tag is the main reason many people seek a burial insurance policy.
Here’s how those funeral costs break down by item:
Note, not all costs included here will apply to every funeral. And there may be other funeral expenses not shown on this list. These numbers are a benchmark only to help show you what’s likely to be included in funeral planning.
Funeral home fees and services aren’t the only things that affect funeral costs. The price of a funeral with burial also varies by state and region.
Below are the average costs for a funeral with burial by region of the U.S., according to the NFDA. Costs do not include a burial plot or grave marker.
For people without large estates, these costs may be difficult for the family to cover out of pocket. Burial insurance can help.
To learn how affordable burial insurance can be, compare personalized rates from a few different companies.
We mentioned above that burial insurance is primarily intended for seniors. There are three main reasons for that.
For seniors who need to pay funeral expenses, and little else, burial insurance might offer just the right amount of coverage.
|“[Burial insurance] is a completely useful product, especially for someone who wants something simple and doesn’t have a ton of money to spend.” –Tony Steuer, CLU, LA, CPFFE, Author and financial preparedness advocate|
It might also be a good option for people in declining health, who would have trouble qualifying for a fully-underwritten life insurance policy (meaning, one that requires a medical exam).
But as with all insurance policies, you should consider your options carefully before buying burial insurance.
There are potential drawbacks that could outweigh the pros for some.
If you compare burial insurance with another life insurance policy — say, term or whole life — burial insurance typically costs more dollar-for-dollar. Meaning, the same person would pay more for a $25,000 burial insurance policy than they would for a $25,000 term life insurance policy.
That’s because burial insurance doesn’t require a medical exam.
“These policies are typically ‘guaranteed issue plans’ with few or no health questions,” says Chris Acker, CLU and CFP. “They are priced assuming all applicants are in poor health.”
But remember, term and whole life insurance generally don’t offer coverage below $50,000 or $100,000. So if you need a small policy — and/or wouldn’t pass a medical exam — burial insurance might be your best bet.
People often look to burial insurance as a way to get life insurance with no waiting period. But that’s not exactly the case.
It’s true that burial insurance coverage takes effect sooner than other kinds of life insurance. With no medical exam to stand in the way, burial insurance can be issued online and activated in just a couple days.
But these policies still include a two year “contestability clause” — meaning coverage is limited for the first two years a burial insurance policy is in effect.
Under this clause, if the insured person passes away within the first two years, a burial insurance company has the right to investigate the death.
If the death was a suicide, the company usually won’t pay a death benefit. And if the insurance company has reason to believe there was false information on the insured’s application, it may not pay either.
In these cases, burial insurance company might simply refund premiums the insured person paid. Or, it might issue a death benefit with a reduced value.
So burial insurance isn’t exactly a no-waiting-period’ policy. “Just because you can get the policy immediately, doesn’t mean it will necessarily pay out,” says Steuer.
Be sure to talk with your life insurance agent and fully understand the rules of the policy before signing on.
The right burial insurance company for you depends on how much coverage you need, and which insurer offers you the most competitive price. There’s no single “best” company for everyone.
However, it helps if you know where to start looking.
|Company||Burial Insurance Policy||Burial Insurance Coverage Amounts¹||Accepted Ages for Burial Insurance||2019 Customer Satisfaction Score²|
|State Farm||Final Expense Insurance||$10,000||50–80||808/1,000|
|Mutual of Omaha||Whole Life Guaranteed||$2,000–$25,000||45-85||795/1,000|
|AARP (provided by New York Life)||AARP Easy Acceptance Life Insurance||$2,500–$25,000||50–80||770/1,000|
|John Hancock||Final Expense Insurance||$2,000–$20,000||55–80||739/1,000|
|Transamerica||Final Expense Insurance||$2,000–$50,000||0–85||732/1,000|
|AIG||Guaranteed Issue Whole Life Insurance||$5,000–$25,000||50–85||722/1,000|
|Globe Life||Funeral and Burial Insurance||$5,000–$50,000||Not listed||Not listed|
¹ Available coverage amounts and age restrictions may vary by state² Customer satisfaction survey data from J.D. Power 2019 U.S. Life Insurance Study
The companies below all offer burial insurance — and they’re some of the most popular life insurance companies by market share, according to the National Association of Insurance Commissioners.
We ranked these based on their score from J.D. Power’s 2019 life insurance study. The survey polled more than 6,000 customers about their satisfaction with their life insurance companies. Insurers are rated for their customer service, price, policy options, and more.
Called “Final Expense Insurance,” State Farm’s burial insurance includes $10,000 of coverage and is available for customers age 50 to 80. State Farm is the second-highest-rated life insurance company in J.D. Power’s satisfaction study.
Burial insurance from Mutual of Omaha is called “Whole Life Guaranteed.” It comes in sizes from $2,000 to $25,000, and customers can apply from age 45 to 85.
Seniors often wonder about life insurance through AARP. The Association does offer burial insurance, but it’s sold through New York Life Insurance Company. Policies are available for 50 to 80-year-olds (and for eligible spouses starting at age 45). And death benefit sizes range from $2,500 to $25,000.
John Hancock’s burial insurance plan is called “Final Expense Insurance.” It comes with face values from $2,000 to $20,000, and can be bought at age 55 through 80.
Transamerica also sells burial insurance under the name “Final Expense Insurance.” Policies are available from $2,000 to $50,000. And, uniquely, Transamerica lets customers purchase burial insurance at any age up to 85.
AIG burial insurance is listed as “Guaranteed Issue Whole Life Insurance.” These policies are offered with death benefits from $5,000 to $25,000. And seniors can apply at ages 50-85.
Globe life is one of the few companies to actually call its policy “Burial Insurance” or “Funeral Insurance.” Globe sells these policies with a face value from $5,000 to $50,000. But note that the sizes available and age ranges to apply can vary by state.
On average, a funeral with burial costs about $10,600. Major burial costs include a casket ($2,500), burial plot ($1,500), and vault ($1,500). Costs for the funeral include funeral home service fees, preparation of the body, and fees for using facilities and staff during the ceremony
and viewing. Remember, average costs vary a lot by funeral home and location. Preparing for a funeral ahead of time lets you compare options and save on burial costs.
Burial insurance costs a different amount for every customer. Many people pay between $30 and $200 per month, but your costs could be outside that range. That’s because the burial insurance rate (or “premium”) depends on many factors. Age and gender are the two most important. Men generally pay a little more than women, and burial insurance costs go up as you get older. You can find the lowest price by comparing burial insurance rates from a few different companies.
Many of the biggest life insurance companies offer burial insurance. Some of the top-rated burial insurance companies include State Farm, Mutual of Omaha, and New York Life (which sells burial insurance in partnership with AARP). You’ll have to compare personalized rates to find out which company is best for you. Note: Many insurers list burial insurance under a different name. So you may have to look for “final expense,” “guaranteed whole life,” or “guaranteed issue whole life” to find a burial insurance policy.
The cheapest burial insurance company for you really depends on your application. That’s because every insurer prices burial insurance policies differently depending on the applicant’s age, gender, and other factors. So while some companies — like Globe Life — have a reputation for being low-cost, you’ll have to compare a few insurers to find out which one is actually cheapest for you.
The good news? Rate quotes are free, and you can check burial insurance prices in just a few minutes online. Start here.
Since burial insurance does not require a medical exam, there’s a very short waiting period between applying and coverage taking effect. “Most of the [burial insurance] players offer guaranteed issue online processes and will issue a policy in days,” says Chris Acker, CLU and CFP. However, like all life insurance, burial insurance comes with a two year “contestability period.” So if the insured passes away within two years of purchasing burial insurance, the company has the right to examine the death and may alter the death benefit payout.
A funeral, burial, and other end-of-life costs can easily surpass $10,000. So if your parent lacks savings (or another life insurance plan) you might consider purchasing a small burial insurance policy to help cover those costs. “For not so wealthy parents, their children may consider paying for a life insurance policy on a healthy parent to defray the cost of dying,” says Mike Charnet, Founder and CEO of American Prosperity Group.
Charnet continues, “When properly designed, this would also provide many other benefits. A financial advisor with a specialization in life insurance should be consulted for greater information in this area.”
You can explore burial insurance plans and connect with top burial insurance companies here.
Burial insurance serves a very specific purpose.
If you have a need for any of the above, burial insurance might be worth it for you.
Find out whether burial insurance fits your needs and budget by comparing policies and rates from a few different companies.
You can check prices right here with no commitment to buy or speak to an agent.