2020 Guide to Funeral Insurance


What is Funeral Insurance?

Funeral insurance is a type of life insurance that helps seniors plan for final expenses. Funeral insurance usually offers coverage up to $25,000, relatively low rates, and does not require a medical exam to qualify. It’s geared toward paying for a funeral, which costs $6,000-$11,000 on average, but the payment can be used for other end-of-life costs too.

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Funeral insurance fast facts

  • Funeral insurance usually offers $2,000-$25,000 in coverage (the “death benefit”) 
  • The death benefit is meant for funeral costs and settling up finances
  • Premium costs vary by person, but often range from $30-$200 per month 
  • Most seniors can get coverage with no medical exam and no waiting period
  • The policy is guaranteed to pay out in almost every scenario

Pros and cons of funeral insurance

Benefits of Funeral Insurance  Drawbacks of Funeral Insurance
– Protects families from paying expensive funeral costs out of pocket – Actual funeral costs can exceed smaller policy sizes
– Seniors can qualify with no medical exam  – Premiums can be expensive over time 
– Can be more affordable than other types of permanent life insurance – Not meant to provide lasting financial support for families

In this article

Note on insurance terminology: 
Funeral insurance can also be called “final expense insurance” or “burial insurance.” All three names refer to the same type of plan. For the purposes of this article, we use the term “funeral insurance,” but you may see others used elsewhere.

How a funeral insurance policy works

In many ways, funeral insurance works like other kinds of life insurance. The person who needs coverage applies, selects a coverage amount (or “death benefit”), and names a beneficiary. 

As long as the insured person stays current on premium payments, the death benefit will be paid to their beneficiary when they pass away. It can then be used to pay for final arrangements for the deceased. 

But there are some key differences about how funeral insurance works, too. 

Chris Acker, a certified life underwriter and chartered financial planner, explains: 

“Funeral insurance policies are designed to be small, whole life policies, typically issued with death benefits of $25,000 or less. Most funeral insurance carriers offer guaranteed issue online processing and will issue a policy in days.” –Chris Acker, CLU, CFP 

Here’s what that means for you.

Benefits of funeral insurance

There are a few features that set funeral insurance apart from “traditional” life insurance plans, like term or whole life. 

  • Guaranteed issue (no medical exam) — Unlike most kinds of life insurance, funeral insurance doesn’t require a medical exam on the application. That means seniors can get coverage even if they’re in poor health
  • Easy application — Since there’s no medical exam, many companies let customers apply for funeral insurance online. This reduces hassle, and coverage goes into effect faster. “Applicants don’t need to meet with an agent and can literally “sign” over the phone and pay with a credit card,” says Acker
  • Limited coverage amounts — Most funeral insurance companies cap the death benefit for these policies at $25,000 or $50,000. Other types of life insurance, like term or whole life, generally start coverage around $100,000 

These unique features are what make funeral insurance appealing to some seniors. 

It can be an affordable, accessible option for people that can’t get life insurance coverage elsewhere. 

See your customized funeral insurance rates

Funeral insurance drawbacks

Smaller coverage amounts can make funeral insurance more affordable. However, since there’s no medical exam, funeral insurance is still more expensive per dollar of coverage than most fully-underwritten policies would be.  

The smaller coverage amounts also limit how far the policy will go to help surviving family members. 

“The benefit of a bigger [life insurance] policy is to provide ongoing benefits to one’s heirs,” explains Tony Steuer, CLU, LA, CPFFE, Author and financial preparedness advocate. 

“It can help a spouse keep their home by providing mortgage payments or rent,” Steuer says. “It can also fund retirement plan contributions. The other big thing is setting money aside for kids to go to college.”
This is what we mean when we say funeral insurance is meant for those with limited coverage needs.


Should seniors buy funeral insurance?

Are you considering funeral insurance for yourself or a senior relative? If so, it’s important to consider both the pros and cons before buying. 

  • Funeral insurance may be a good choice if you need a small amount of coverage to help with final expenses. Also, if you believe you’d have trouble passing a life insurance medical exam, or are past the age when most companies will issue term life insurance (usually 75 or 80) 
  • Funeral insurance may NOT be the right choice if you’re in fair to good health, or young enough to qualify for term life insurance. In addition, funeral insurance will not provide ongoing financial support for surviving family members

Ultimately, the decision to buy funeral insurance or not comes down to your individual circumstances. 

“Funeral insurance is a completely useful product — especially for someone who wants simple coverage for a specific need, and doesn’t have a ton of money to spend,” says Steuer.  

You can use the link below to explore customized funeral insurance policies and rates.

Customize your Funeral Insurance Policy


What funeral insurance covers

The main goal of funeral insurance is to cover funeral expenses. A funeral, with burial or cremation, costs $6,000 to $11,000 on average — so having a financial plan to cover funeral costs is incredibly important.

But funeral insurance can be used for other things, too. 

As with all life insurance policies, the funeral insurance “death benefit” is paid to a pre-selected beneficiary.

That person, usually a spouse or close relative, can use the funds however they see fit. There are no rules that say the death benefit must be used for funeral costs. 

Some of the most common uses for a funeral insurance policy include: 

  • Funeral costs — A funeral is often the most expensive arrangement after someone passes away. Using insurance to pay for a funeral protects families from having to pay thousands out of pocket 
  • Debts and accounts — After someone passes away, a few months worth of their ongoing debts may need to be covered. That could include things like mortgage payments, utilities, and insurance. Other things, like credit card bills, do not have to be paid
  • Death certificates — A “death certificate” is a government-issued document that states the time and circumstances of someone’s passing. Multiple death certificates will be required to close accounts, make funeral arrangements, and more. Copies of a death certificate typically cost $10-$20 apiece
  • Fees and accounting bills — If there are fees required to close accounts, sell the deceased’s home, file taxes, or organize their estate, these can be covered by funeral insurance 

Of course, this list is just an example. 

Funeral costs tend to be high, and proceeds from an average funeral insurance policy are relatively small. So many people will simply use the payout to cover all or part of the funeral arrangements.

Breakdown of funeral costs

Below is a breakdown of average funeral costs for 2019, according to the National Funeral Directors Association.

Item or service Average cost¹
Funeral home service fees $2,195
Removal/transfer of body to funeral home $350
Embalming $750
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
Cost before burial or cremation fees  $4,800
Hearse $340
Metal casket $2,500
Vault $1,495
Burial plot² $1,000-$4,000
Total cost for funeral with burial  $10,635
Cremation fee  $350
Cremation casket  $1,200
Urn $295
Total cost for funeral with cremation $6,645

Many people are not aware how quickly funeral costs can add up. 

Customers do have the right to compare costs from different funeral homes and find the most affordable option. However, non-negotiable fees like the “funeral home service fee” often cost a few thousand dollars. 

So regardless of the funeral arrangements someone chooses, it’s crucial to plan for these expenses ahead of time.


How much does funeral insurance cost?

For many people, funeral insurance costs between $30 and $200 per month. But premiums can vary widely depending on the applicant’s unique profile. The main factors that impact cost are age and gender. So the older you are, the higher the premiums will be. And men usually pay more than women.

Age of Purchase  Policy Size (Death Benefit)  Average Monthly Premium¹ 
55 $10,000 $41
65 $10,000 $62
75 $10,000 $108
¹Sample rate data from Lincoln Heritage Funeral Advantage

Sample rates shown here are a snapshot meant for comparison only. Check personalized funeral insurance quotes to see what your own rate will be. 

CTA: Check custom funeral insurance rate quotes

Funeral insurance costs vs. life insurance costs

Like we mentioned above, funeral insurance tends to be more expensive per dollar of coverage than other types of life insurance. That’s because, without a medical exam, companies can’t fully measure the “risk” of insuring someone. But they’re still promising to pay a death benefit. So they charge a higher premium to balance out the cost.

“These policies are typically ‘guaranteed issue’ plans with few or no medical questions,” explains Acker. “And they are priced assuming all applicants are in poor health.” 

Bur for people that are in poorer health, a guaranteed issue policy may be the best option. 

“If people can’t get — or don’t need — higher amounts of life insurance, this process makes it easy and relatively painless to secure at least a small amount of life insurance for their loved ones,” says Acker. 

And for many, having some life insurance is better than having none.

Why compare funeral insurance quotes

Funeral insurance costs vary by person. But they also vary by company. That’s because each insurer calculates price differently based on the applicant’s age, gender, basic health status, and other factors. The price estimate a company gives you is called a “funeral insurance quote.”

“Funeral insurance is one of those marketplaces where there’s huge variance [in cost]. Make sure you compare options.” –Tony Steuer, CLU, LA, CPFFE, Author and financial preparedness advocate

The goal as a consumer is to find the lowest premium for the coverage you need. So it’s important to compare quotes from a few different funeral insurance companies before buying. 

You can compare personalized quotes to get the rightfuneral insurance company right here. 

Compare Funeral Insurance Quotes


Funeral insurance companies and plans

Comparing rates from a few different companies lets you find the best value for your funeral insurance plan. 

To help you get started, we compiled a list of the top seven funeral insurance companies based on market share data from the National Association of Insurance Commissioners

Companies are ranked based on their customer satisfaction score from J.D. Power’s 2019 life insurance survey. The J.D. Power study measures customer satisfaction with every part of the life insurance process — from application to price, billing, and customer service. 

Company Funeral Insurance Policy Funeral Insurance Coverage Amounts¹ Accepted Ages for Funeral 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

Compare the top funeral insurance companies

State Farm funeral insurance

State Farm is one of the biggest and best-known insurance companies out there. Along with more common offerings like home and auto insurance, State Farm has a funeral insurance plan called “Final Expense Insurance.” It offers exactly $10,000 in coverage and is available to customers age 50 to 80. State Farm’s coverage is right in line with the average cost of a funeral with burial.

Mutual of Omaha funeral insurance

Mutual of Omaha has funeral insurance plans ranging from $2,000 to $25,000. The company lists this policy as “Whole Life Guaranteed,” but despite the name, it works just like other funeral insurance plans. Customers can apply from age 45 through 85. And coverage is guaranteed with “no medical exam or health questions to answer.”

AARP funeral insurance (provided by New York Life)

For senior members of the AARP, funeral insurance is available through the New York Life Insurance Company. The plan, called “Easy Acceptance Life Insurance,” is available to members starting at age 50. And it offers coverage from $2,500 to $25,000. Eligible spouses can even apply for AARP funeral insurance starting at age 45.

John Hancock funeral insurance

Funeral insurance — or “Final Expense Insurance” — is available from John Hancock in face amounts of $2,000 to $20,000. Customers can apply from age 55 to 80. However, with death benefits capped a little lower than other companies, John Hancock is a better choice for those with very limited insurance needs.

Transamerica funeral insurance

Transamerica sells funeral insurance coverage from $2,000 to $50,000. That’s about the widest range of funeral insurance policies one could hope to find. With Transamerica, this coverage is available at any age up to 85 years old. (Note: Transamerica also calls its plan “Final Expense Insurance.”)

AIG funeral insurance

Funeral insurance from AIG starts at $5,000 and goes up to $25,000. AIG calls its funeral insurance plan “Guaranteed Issue Whole Life Insurance,” and it’s available to customers age 50 through 85.

Globe Life funeral insurance

Globe Life specializes in no-exam online life insurance applications. So it’s only natural that the company also offers guaranteed issue funeral insurance. Policies are available with coverage from $5,000 to $50,000, though policy options and age of issue vary by state.


How to pay for a funeral with life insurance

Funeral insurance is a simple way to pay for a funeral with life insurance. Coverage is easy to get, and seniors can choose a small policy amount to match funeral expenses. 

But when it comes to actually paying for the funeral, there are a couple options to be aware of.

Using the funeral insurance death benefit

The funeral insurance death benefit can be used however the beneficiary sees fit. Many people use the one-time, lump-sum payment to cover funeral expenses. However, life insurance often takes up to 30 or even 60 days to payout. So if the policy does not pay until after the funeral, the family may have to cover funeral costs out of pocket initially. Then, they can take the death benefit as a form of reimbursement.

Using pre-need funeral insurance

Pre-need funeral insurance can protect the family from having to cover any funeral expenses out of pocket. With a pre-need policy, the insured person chooses a funeral home and makes funeral arrangements during life. And that funeral home is named as the beneficiary of the insurance policy. That way, life insurance proceeds go to the funeral home instead of the family, and funeral costs are covered directly.

Assignment of life insurance to a funeral home

A “funeral assignment” diverts life insurance proceeds directly to a funeral home to pay for its services. The insured person can buy this kind of policy through a funeral home directly (known as “pre-need funeral insurance”). Or, with an “assignable” funeral insurance policy, the beneficiary can sign proceeds over to the funeral home after the insured person passes away.

If the beneficiary chooses to assign life insurance funds to a funeral home, any money left over after the funeral has been paid for will be returned to them.

Whether or not you can assign life insurance proceeds depends on the funeral home and the insurance policy. When you’re checking funeral insurance quotes, ask the company whether assigning the benefit to a funeral home is an option.

Connect with a funeral insurance company today

Finding a lost life insurance policy

Life insurance can be used to pay for funeral expenses — but only if the beneficiary is able to file a claim and retrieve the payout. This is simple enough if the insured person kept their affairs in order. But oftentimes, it can be difficult to locate a life insurance policy after someone passes away. 

If your loved one had life insurance and you need to file a claim, try this resource: 12 steps for locating a lost life insurance policy, from the Insurance Information Institute. 

Or, try the Life Insurance Policy Locator from the National Association of Insurance Commissioners.


Funeral insurance FAQ

How much does funeral insurance cost?

How much funeral insurance costs depend on your application. Since funeral insurance is “guaranteed” coverage, your premium will not depend on health questions. However, factors like age and gender still affect rates. And the company you choose makes a big difference, too. Most customers can expect to pay anywhere from $30 to $200 per month. But to get an accurate estimate of funeral insurance costs, check personalized rates here.

Does funeral insurance have a waiting period?

Like all life insurance, funeral insurance has a two year waiting period or “contestability clause.” This waiting period determines whether or not a funeral insurance policy will pay out. If the insured person dies within two years of buying their policy, it’s likely their family won’t receive a death benefit. Instead, they’ll probably receive a return of any premiums paid by the insured. The waiting period usually also states that if the death was a suicide, the company may not pay, or may pay a reduced premium.

Can you get funeral insurance if you have cancer?

Yes, it’s possible to buy funeral insurance if you have cancer or another terminal illness. That’s because qualification for funeral insurance is not based on a health exam. You may have to answer a few basic health questions on your application, but being diagnosed or treated for a serious illness should not bar you from getting coverage. These policies are priced higher than other life insurance policies to accommodate that extra risk for the company. Just remember: There’s a two year waiting period for funeral insurance, and the death benefit won’t be paid if the insured dies within two years of getting coverage.

What’s the difference between life insurance and funeral insurance?

Funeral insurance is a type of life insurance. But there are some key differences between funeral insurance and more common plans like term or whole life. First, funeral insurance guarantees coverage. You won’t be denied based on health issues or advanced age. Second, funeral insurance comes in small policy sizes. It generally offers $2,000 to $25,000 of coverage, while term or whole life starts around $100,000. Finally, funeral insurance is more expensive than most insurance. But thanks to smaller policy sizes, it can still be affordable for those that can’t get covered by traditional life insurance.

What are the benefits of a funeral plan?

Having a funeral plan makes it possible for one’s family to pay for the funeral without financial strain. Having a financial plan is important, as funerals cost between $6,000 and $11,000 on average — no small sum for a family to cover without a payment plan in place. Of course, there’s more than one kind of “funeral plan” to help families prepare. Prepaid funeral plans let you select funeral services and pay for them ahead of time. Life insurance can help pay for a funeral if you already have it. And for seniors that don’t already have life insurance, a funeral insurance plan offers coverage to help with these costs.

Can I get a funeral plan for someone else?

Yes, you can buy a funeral plan for someone else. If you want to buy a funeral insurance plan for a parent or family member, you have to have an “insurable interest” in them. That means you’d be financially impacte `d if they passed away — for instance, if you’d have to pay for the funeral. If you do have an insurable interest in the person, you will likely need their approval and signature on the policy. However, rules vary by company.

Does life insurance pay for a funeral?

Life insurance can absolutely be used to pay for a funeral. Most funerals cost somewhere in the neighborhood of $10,000 — so if this is your main goal in purchasing life insurance, make sure you have sufficient coverage. Families should also remember that life insurance can take up to a month or two to payout. So funeral costs may have to be paid out of pocket and then reimbursed by life insurance. But this is avoidable if the death benefit can be assigned directly to a funeral home.

How can you pay for a funeral without insurance?

Typically, the next-of-kin is expected to handle funeral expenses. If they need to pay for the funeral without life insurance, there are a number of options. First would be using the deceased’s assets (savings, investments, proceeds from the home sale, etc.) to cover funeral expenses. Some people qualify for assistance from employers or veteran’s benefits. Social Security may provide a small sum, but it’s only about $200. And families can look for government assistance programs, which vary by state. It’s also possible to lower funeral costs by shopping around for the most affordable funeral home and services.


Get funeral insurance quotes today

Funeral insurance is designed to be an affordable, accessible option for seniors. It’s easy to apply for coverage online and buy only as much insurance as you really need. 

But remember: Since there’s no medical exam, costs are higher per dollar of coverage than they would be with other types of insurance. That makes it extra important to compare quotes and find the best rate.

You can check personalized rates from multiple companies right here.

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