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.
|Benefits of burial insurance||Drawbacks of burial insurance|
|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:
|Funeral with Burial, Paid Out of Pocket||Burial insurance|
|Money returned to family||$0||$10,000|
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:
|Item or Service||Average Cost|
|Funeral home service fees||$2,195|
|Removal/transfer of body to funeral home||$350|
|Other preparations for the body||$255|
|Use of facility and staff for viewing||$425|
|Use of facility and staff for ceremony||$500|
|Service car or van||$150|
|Basic memorial printed package||$175|
|Total average cost of a funeral and burial||$10,635|
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.
Guaranteed issue burial insurance is a type of final expense insurance that covers those who might not otherwise qualify for life insurance. These policies are smaller and designed to provide financial relief to those who have to deal with funeral expenses.
Guaranteed issue basically means you are guaranteed a policy, no matter what your medical condition. In fact, these policies are offered without any medical questions or a medical exam at all. As you can imagine, for those struggling with chronic health conditions, there’s an appeal to guaranteed issue plans.
A simplified issue burial insurance policy is one that will ask you a few health questions and may ask for some medical records, but won’t require you to take a medical exam. If you’re in good health when searching for burial insurance, a simplified issue policy might be more enticing because you could get increased coverage for a lower premium.
While funeral homes can offer certain burial insurances, the specifics can get a bit hazy. Not all states allow funeral homes to offer burial insurance, so if you want to purchase from your funeral home of choice, you might find it’s not possible.
More often than not, funeral homes offer prepaid burial plans. These plans differ from burial insurance, because they allow you to pick out exactly what you want for your funeral, from casket and flowers to program and hearse. You then pay for these specific choices over time.
Prepaid burial plans give you the ability to plan what you want, but there is a downside. Once you’re locked in to these plans, there’s very little wiggle room. And if something were to happen to the funeral home, you could lose your money.
If purchasing any form of burial policy through a funeral home, make sure you do the research first. Determine if it’s better financially, what specifically is included, and what would qualify you for a refund.
Or take an easier route and purchase your burial insurance through an agency and have the payout go directly to your funeral home.
According to the National Funeral Directors Association, the average funeral and burial cost $7,360 and the average cremation service costs $6,260.
However, these prices will vary depending on what type of services you want, as well as where you live.
The cost of burial insurance is dependent on your current health situation, how much coverage you want, and your age.
However, the average cost of burial insurance is $50 a month for a policy of $10,000.
Most burial insurances are guaranteed issue, which means they can’t deny you a policy based on any medical conditions. However, these plans will, by nature, be more expensive than your typical life insurance policy.
And, if you want more than the average $10,000, you’ll have to pay more for your policy as well.
It’s extremely difficult to compare the costs of life and burial insurance, just because there are so many variables to take into account. The cost of any insurance will depend on the person trying to get the policy. Insurers take several things into consideration, even with guaranteed issue policies. Everything, from your age to where you live, can determine the cost of life or burial insurance.
However, there are a few averages you can consider when making your choice on what type of policy works best for you.
The average cost of a $10,000 burial insurance policy will cost about $50/month, though gender, lifestyle, and location can change that amount.
On the other hand, a 20 year term life policy for $500,000 in life insurance can cost about $26/month. The actual cost will vary depending on a host of things, including your age and what company you use.
The best way to compare life insurance and burial insurance costs is for you to get quotes from several reputable companies.
There are a few burial insurance agencies that offer policies for as low as $1,000. However, the average agency will require a policy of at least $2,000.
These low policy options are seen as a benefit to those who don’t want to pay a vast amount towards insurance or who have other plans in place for the majority of their burial costs.
Life insurance and burial insurance are two very different things, so whether one is better than the other is completely dependent on your situation.
Life insurance is a much more general type of insurance that will pay your beneficiaries a sum of money after your death. These amounts can be in the millions, but often take a while to pay out. Burial insurance offers smaller policies that are paid out as soon as you die to your beneficiaries to specifically help with end of life costs.
Another difference between life and burial insurance is that the goal of life insurance is to help keep loved ones financially secure after the passing of a main earner in the family. However, burial insurance is designed to help with the expenses surrounding funerals, burials, and memorial services.
Depending on what you and your loved ones need, both life insurance and burial insurance can be viable options. The key is deciding on what you need and picking a plan that best works for you.
While you’re unlikely to find any deals on burial insurance, this should actually be seen as a good thing. Burial insurance is regulated very closely to keep insurance companies honest. If you’re looking for a way to decrease your burial insurance costs, consider adjusting or cutting back on your policy, opting for a pre-paid burial service, or going for a term policy over a whole life.
However, it’s recommended to pay the slightly higher premiums in order to get the best policy to assist your family and loved ones with the financial burden of funeral costs. Make sure you know what your funeral will cost and pick a plan that best supports those needs.
The first step in finding a burial insurance agency is determining exactly what you want in your policy. Take some time before even reaching out to agencies to make a list of your final expenses. Pay attention to the details at this point. You’ll need coverage for embalming, a casket, or cremation, but also think about what type of service you’ll want. Think about things like flowers and food. Every details counts.
Once you know your final expenses, you should determine how much you’re able to pay. Create a general budget that is comfortable for you.
Finally, request quotes from several burial insurance agencies. Use the information you’ve put together to determine which of those agencies provide what you need at a cost you can afford. Once you’ve narrowed down your list based on these criteria, you should have a burial insurance agency that works for you.
The way to apply for burial insurance will depend on which agency you decide to use. In general, applications for burial insurance are completed online or with an agent.
Most burial insurance professionals recommend getting quotes from multiple agencies and picking the best two or three that work for you. Then, call the agency to speak with someone and get more information about your preferred plan.
At that point, you should be able to fill out any applications on the phone or online. Start here
A great benefit of burial insurance is you can pick whomever you want to be the beneficiary. Anyone from your next of kin, a close friend, or even your funeral home could receive the money from your insurance policy.
No matter whom you pick to be the beneficiary, make sure it’s someone you trust to make decisions. While most burial insurance policies aren’t huge, it can still be a lot of money and you want your beneficiary to use that money wisely.
If you’re choosing a family member or friend as beneficiary, sit down and have an honest talk about what you want the policy to go towards. If you’re making your funeral home the beneficiary, make sure all your paperwork is in order, including who should receive any excess funds.
Unfortunately, at this time, neither Part A or Part B of Original Medicare pay for funeral expenses.
While money received from life insurance payouts can be used to cover funeral expenses, it’s important to realize the timeline on this process.
Life insurance doesn’t pay on its policies immediately. In fact, it can take 30 to 60 days for even the most straightforward cases to be processed. Unfortunately, the time it takes to process plans can cause a serious problem for families who thought they could rely on life insurance to cover funeral costs.
Most funeral homes expect payments upfront, so families waiting for a life insurance policy may find themselves paying out of pocket for burial costs. For those in positions where paying all funeral costs upfront could be a problem, a much better solution would be to get an additional burial insurance policy.
The short answer to whether or not you can buy burial insurance for someone else is yes. However, when you start to look at the details, it gets a bit more complicated.
In order to purchase a burial insurance plan for someone else, you need to be able to prove an insurable interest with that person. Basically, you need to show if the person you want to insure dies, it would be a financial loss for you. Most agencies offering burial insurance recognize immediate family as insurable interests.
If you’re trying to buy burial insurance for someone besides a spouse, parent, or sibling, things could become more complicated.
Most companies that offer life insurance will also offer some sort of burial insurance policy. While some companies that offer burial insurance are larger, national companies, like State Farm and Aetna, there are also smaller, local options available.
In order to pick the best company for your needs, you’ll want to look at both local and national companies, request quotes, and then make the decision for what works for you.
What an insurance agency does if someone dies before paying off their plan depends on the policies of that company.
However, the general rule is that if a person with a burial plan dies before their plan is paid off, their beneficiaries will get the total of the premiums paid to that point. This amount will increase through the life of the policy. Usually around year two or three, the policy has completely matured and beneficiaries can expect to get the full amount of the burial insurance benefit.
While AARP is technically not an insurance company, it does offer permanent life insurance coverage for burial expenses. AARP is able to offer this service due to a partnership with New York Life.
If you’re already a member of AARP and between the ages of 45 and 80, you are guaranteed a burial policy.
The short answer to whether or not there’s a waiting period for burial insurance is: Yes. However, as you start to look at the details, it isn’t as clear.
Although most burial insurance policies have a waiting period of about two years before you get a full payout, there are companies that offer no waiting burial insurance policies. The catch is that these no-wait policies often have higher premiums and a bit more red tape for approval.
Burial insurance doesn’t typically require a medical exam or ask many medical question before granting policies. However, to get a policy with no waiting period, you might have to delve into your health a bit. The result could be a no wait policy that costs you a bit more than those with waiting periods.
The best choice for paying for your funeral and end of life costs will always be unique to your situation. However, most professionals agree that purchasing burial insurance is safer than pre-paying for a funeral.
There isn’t anything inherently wrong with pre-paying for a funeral, but it is a risky move. For one, your circumstances could change. If you move or pass away in another state, your pre-paid funeral might be invalidated. And because a large number of funeral homes are privately owned, there’s always the risk they could go out of business, taking your plan and hard-earned money with them.
While burial insurance is the preferred way to cover your costs, you can still pre-pay for a funeral as long as you’re sure you won’t change your mind and feel confident in your choice of funeral home. Just make sure you have a thorough understanding of what’s included in your plan before paying for one.
In the case of a death, Social Security offers a one-time payment of $255 to the surviving spouse. Called a death benefit, this amount is given to the surviving spouse if they were living together or share certain Social Security benefits. In the case of there not being a spouse, the death benefit goes to the first eligible child.
To apply for this benefit, you need to call the Social Security office.
In the case of a death, most funeral homes will report to the Social Security Department. If family or loved ones are using the traditional services of a funeral home, this should be included.
Funeral homes will ask for the Social Security number of the deceased in order to make this report to the Social Security office. They will also handle getting the original death certificate and copies, which are needed for several end of life processes.
Yes! It is perfectly legal to have more than one burial insurance plans.
However, instead of paying on two policies that will offer very similar benefits, it’s recommended to make those payments towards something else, like life insurance.
A downside to having multiple policies is it will make insurers look at you more closely, evaluating whether you’re not applying for more than is reasonable.
A payable-on-death account, or POD, is a bank account you can open to save up for your funeral costs. When you pass, these funds will be immediately available to the person you’ve arranged to be your beneficiary.
While POD accounts have the benefit of not needing to go through probate or place hard rules on when you need to pay, they do require some determination on your part. If you opt for a POD instead of getting burial insurance, you’ll still want to have a plan for how much you want to put away and a timeframe to save that money.
Funeral insurance is just another name for burial insurance. They are both the same thing and can be used interchangeably in discussions about end of life plans.
Another name for burial and funeral insurance is final expense insurance. If you see references to any of these terms, know they’re discussing the same things.
The length of your burial insurance coverage will depend on whether your policy is whole life or term life. If you have a term policy, you pick how long you want the policy to last, which can be anywhere from a year to thirty years. Once this period is over, your burial insurance policy will lapse.
If you have a whole life insurance policy, you will be covered until you pass away, with no restrictions.
Whole life or term policies each have their pros and cons, so it’s important you take the time to research before committing to one or the other.
A term life insurance plan is one that lasts for a very specific amount of time, one decided on at the signing of the policy. For example, at the age of 50, you could get a 30 year term life plan, so you’d be covered until you were 80. However, at 81, your plan would no longer pay out.
A whole life insurance policy is, as its name suggests, one that last the entirety of your life. With these policies, you don’t have to worry about your beneficiaries getting the funds they need, because you’re covered for life.
If you continue paying your premiums, in most cases your burial insurance can’t be canceled. Most burial insurance plans are what is called guaranteed issue, which means as long as you pay, you’ll receive your benefits. This is the case even if you develop medical issues.
However, if you do stop paying on your plan, you forfeit access to even the amount you’ve already paid into your plan.
Yes & No, most burial insurance policies can’t be canceled once you’ve started paying on them. If you find yourself in a position where you no longer want burial insurance, you can stop paying on your plan. However, once you stop paying your premiums, you’ll no longer receive the payout or get a refund.
One of the benefits of burial insurance is once you’re locked into a plan, your premiums can’t increase. Unless there’s a breach of contract, like payments not being mad, your plan has to cover what was agreed to at the promised rate.
The best way to make sure you’re getting a real burial insurance plan is to purchase one through an accredited company with a history of legitimate dealings. There are plenty of scammers out there and many target those looking for burial insurance. However, with a little homework and by paying attention to what you sign, you can rest assured that you’re making a financially shrewd decision for you and your loved ones.
For those who have served in the military, they have the option to be buried in a national cemetery without any cost to family members. The Department for Veterans Affairs even cover the cost of a gravesite or marker.
However, in order to qualify for this service, you do need apply for space now. Unfortunately, space is limited and you’ll need to receive a predetermination of burial eligibility before you qualify for this free service.
In addition to a free burial plot, veterans also qualify for between $300-$796 for burial expenses, as well as $796 if you want a plot that isn’t in a national cemetery.
For those without burial insurance or the means to pay the high funeral costs, there are a few alternatives, though they might not be as appealing.
First, you could consider a direct cremation, which cuts out a lot of the fees from the morgue. In a direct cremation, the body goes straight from the hospital to the crematorium. Although these cremations can’t be attended by many people, they are less expensive than traditional cremations and the funeral home costs they entail.
A second option, for those with no budget for burial costs and a heart for helping others, is to donate your body to a medical school. Not only will a donation help train future medical professionals, it also doesn’t cost anything. And once your donation is no longer needed, the medical school will pay for cremation and return the ashes to the family.
It’s scary to think about the ‘what ifs’ of funeral costs, but there are options. If you’re unsure, speak with a burial insurance agent and let them know your financial constraints to see what they can do for you.
A graded death benefit refers to how much beneficiaries can get from a burial insurance policy within the first few years of the policy. Most burial insurance policies will be fully mature by year two or three. However, if something were to happen to a policy holder the first year they had the policy, their beneficiaries may only get what premiums were paid into the policy.
Before you purchase a policy, make sure you understand how the benefits work and what your beneficiaries should expect in the time after your death. Taking the time to know those answers now will prevent a lot of confusion during a time of deep grief.
The good thing about burial insurance is you can pick any beneficiary you want, including your funeral home of choice. It’s usually preferred to have a family member handle the intricacies of planning a burial and the associated services, but things can get tricky when it comes to money.
If you’re unsure who to name as your beneficiary, speak to someone at your funeral home and make a plan for what you want, down to the smallest detail. Once you have that in place, name them as your beneficiary on your burial insurance policy. The money will go directly towards what you want without putting those financial tasks in the hands of family or friends.
As is the case with most insurances, burial insurance premiums increase with age, so you should get a plan as soon as possible!
Most burial insurance policies have an age restriction, so you can only purchase a plan once you’ve turned a certain age, usually between 45 and 50. The age limits depend on the company. As soon as you’re eligible, begin looking for a policy that will meet your unique and specific burial needs.
Insurance agencies will often offer different premium options. It can almost be instinctual to want the cheapest option, but choosing a premium without knowing what that means in the long-term could be detrimental.
There are three main types of premiums. The first is a stepped premium, which are premiums that are recalculated every year. There are a variety of things that can influence these premiums, from your age to where you reside and any new health conditions. While stepped premiums often start out very low, they can increase dramatically over time.
The second type of premium is a capped premium, which is a premium that is only paid until you’ve reached a specific monetary amount or age. Once you hit that amount or age, you keep your coverage, but you no longer have to pay premiums.
Finally, there are leveled premiums. Leveled premiums are first determined by taking certain aspects into consideration, like your gender or age, and creating a premium based on that information. However, once you’re locked into that amount, you keep that premium for life, as long as you keep up your payments.
Most burial insurance policies come with leveled premiums.
Unfortunately, because burial insurance is based on individuals, you can’t buy a family plan. Every individual will need a plan for themselves.
If you’re in a financial situation where paying $7,000 – $10,000 for a funeral of a parent isn’t feasible, you should definitely consider purchasing burial insurance for your parents. While ideally, your parents would purchase their own insurance, it is well worth the effort and small monthly financial cost to make sure their funeral costs are covered.
Buying burial insurance for parents can be a tricky conversation to navigate, but taking the time to do so now will give you and them the peace of mind.
The Goodman Triangle, or Goodman Rule, is a tricky insurance situation some people find themselves in when it comes to burial insurance policies.
With most burial insurance policies, there are two people involved: The Payer and Insured, or person paying on the policy, and The Beneficiary. In these straightforward situations, the person being insured pays on their own policy, which then is paid out to their beneficiary.
The Goodman Triangle comes in when a third person is added. So, for example, let’s say you are paying for the life insurance policy for your parents, making you the Payer and your parents the Insured. However, instead of naming you as the beneficiary, your parents name another sibling. This makes the sibling the beneficiary.
In this case, when your parents die and your sibling gets the burial insurance payout, this is seen as you gifting your sibling with the payout. And you can be taxed on this money.
To keep things as straightforward and simple as possible, keep burial insurance as an agreement between two people: The Insured and Payer with the Beneficiary.
Most burial insurance policies will only ask the most basic questions. You’ll need to provide your personal information, like where you live, your age, and your gender. Some burial insurance forms will also ask for a brief medical history, though this is not at all as invasive as life insurance applications. Any health questions will be general, like whether or not you smoke.
There are burial insurance policies that don’t ask any health questions, but these will always be more expensive.
This is actually a very common mistake when it comes to burial insurance policies. While there are guaranteed issue burial insurance policies, there are also simplified issue insurance.
For a simplified issue policy, there will be a few, general health questions. Not only will these questions determine your premiums, they can disqualify you from a policy. However, if you get a guaranteed issue policy, you won’t be asked any health questions and you’re guaranteed a policy.
How long it takes for your burial insurance policy to be approved depends on what company you use. Some insurance providers give instant approvals, while others can take a few days.
If approval time is a serious concern for you, check with the companies you’re considering to see what they’re specific timeline will be for the approval process.
There are burial insurance policies that accumulate cash value as you consistently pay a premium on them. If your policy has a cash value, you can borrow against that value, though you will need to pay interest.
While the cash value of burial insurance policies is a safety net option during times of financial hardship, they should only be used in worst case scenarios. You’ll have to pay that amount back if you want your beneficiary to receive the full amount of the policy.
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.