Burial Insurance: Comprehensive Review 2021

Burial Insurance

Understanding burial insurance policies and their benefits is a crucial step when you are shopping around for insurance.

Though many people don’t consider it an option, burial insurance can be an excellent fit for you, especially if you struggle to afford regular life insurance.

Burial insurance provides comfort to you and your loved ones who will have to cover funeral expenses at the end of your life.

You likely have many questions surrounding burial insurance. Because many people are unaware that it’s an option outside of regular life insurance, it is essential to get educated on burial insurance and its benefits.

Here are some things you should know about burial insurance when deciding whom to go with and some of the best providers out there. 

What are the Benefits of Burial Insurance?

There are many benefits of getting burial insurance. The primary use that you will get with burial insurance is that it can offer peace of mind for your loved ones after your passing.

Burial insurance will help take the financial burden off of your family and make things a little easier in their time of grieving. 

If you are worried about how your beneficiaries will cover the costs once you have passed, you should seriously consider getting burial insurance. For many older people, burial insurance is a more affordable way to cover funeral costs instead of life insurance.

Burial insurance plans offer some flexibility so that you can find the best plan for you.

The death benefit is paid to your beneficiary, who has the control to use the money in any way that they see fit. Because they can use the money in any way they see fit, they can also utilize it for any additional expenses that may come at the end of life, like medical bills, legal costs, and hospice care.

What are the Benefits of Burial or Life Insurance Policies? 

You should be aware of the key benefits of burial or life insurance when shopping for policies.

Burial insurance policies offer a more affordable way to get coverage for your end-of-life costs outside of purchasing regular health insurance, which is typically much pricier.

Burial insurance is a type of life insurance, but the two are not interchangeable. Some of the main benefits of these types of insurance are:

  • Payouts for life insurance are tax-free. If you have a burial or life insurance policy and die while coverage is still in effect, your beneficiaries will receive a lump sum death benefit. These payouts are not considered income for taxes, and the money does not have to be reported when your heirs file their taxes.
  • With burial and life insurance, your dependents will not have to worry about living and death expenses. We recommend that you have life insurance equal to 10 times your regular income. With a policy this size, it is unlikely that your loved ones will have to worry about living expenses or other significant costs such as funerals and end-of-life expenses.
  • Life insurance itself can cover burial expenses. Many people do not have enough savings to cover the costs of a funeral and other end-of-life expenses by themselves. The money from burial insurance or life insurance can help to pay for your burial expenses.
  • Burial and life insurance allow you to get coverage for chronic and terminal illnesses. Many life insurance companies offer riders that can be added to your policy to help your coverage. Accelerated benefit riders allow you to access some of your death benefits under certain circumstances. For example, you could potentially use your death benefit while still living to pay for other expenses.
  • Burial and life insurance policies can help to supplement your retirement savings. By purchasing a whole, universal, or variable life insurance policy, you can accumulate cash value in addition to providing death benefits. You can eventually use this to cover expenses like buying a car or making a down payment. 

Burial insurance is a type of life insurance with a much smaller benefit amount than traditional life insurance policies.

This is because burial policies are meant to take care of final arrangements only, whereas life policies are purchased to cover a wide array of needs. You can use payouts from burial insurance for other expenses at the beneficiary’s discretion, but benefit amounts cover final arrangements only.  

What is Burial Insurance? 

Burial insurance refers to a whole life insurance policy with a death benefit from $5,000 to $25,000, with an average benefit of $10,000 for most individuals.

This policy is typically purchased to provide money for the funeral, while burial costs and other end-of-life costs like medical bills and hospice care costs. Premiums for burial insurance can be paid weekly or monthly and are typically collected at the policy owner’s home or workplace.

These policies can cover one person or everyone in a family, which is excellent if you want to get coverage for more than just yourself.

It is also known as Final Expense Insurance and is typically for people who don’t have any other life insurance or who cannot afford a regular life insurance policy.

Coverage is available for small amounts, and this insurance is used when you don’t have the money and want to pay for your funeral. Planning for end-of-life costs will be a huge relief for your loved ones during their time of grieving.  

What is a Burial Insurance Policy? 

Burial insurance policies are small whole life insurance policies created for seniors that cover funeral and end-of-life costs.

Life insurance for seniors starts at age 50, and most policies cap at $50,000 in coverage. 

How Much is Burial Insurance? 

Per month, the average cost of burial insurance is $50-$100. The most familiar amount for burial insurance is $10,000. Your premium could be higher or lower–this is dependent on your age, gender, health, and the face amount that you purchase.

When you are calculating the cost of burial insurance, make sure that you consider the amount of coverage needed, your age, how healthy you are, and the state you live in. It can cost as little as $10 a month for a healthy senior with a small death benefit. 

What is the Cheapest Burial Insurance?

It’s hard to determine what the cheapest burial insurance overall is, and it typically depends on your needs and health. Some policies are issued with no medical questions or exams, but these tend to be more expensive.

Shopping around is the best way that you can get cheap coverage. However, one of the more affordable policies that you can get is from Mutual of Omaha.

This option may be cheaper because Mutual of Omaha allows 45-year-olds to buy coverage in all states it serves, save New York. Because of this, people can get a policy at a younger age when rates will be cheaper. If you don’t need too much life insurance, you can buy as little as $2,000 worth. 

Again, the cheapest burial insurance depends on your age and health status. Burial insurance begins at $5,000 in coverage, which is the most affordable coverage amount available.

You can most likely qualify for inexpensive burial insurance coverage with a more significant death benefit if you are in good health. 

What is Included in Burial Insurance?

Burial insurance covers the cost of your funeral and/or cremation expenses once you have passed away.

Burial insurance can also be used at the beneficiary’s discretion as a way to pay off debts such as medical bills, mortgage loans, or credit card bills.

What Does Burial Insurance Cover?

Burial insurance primarily covers the cost of your funeral and/or cremation when you die.

In addition, it can cover any other costs that your beneficiaries deem appropriate at the time of your passing. 

How Much Burial Insurance Do I Need?

Most burial insurance policies fall around $10,000 but can range anywhere between $5,000 and $20,000.

When deciding on how much you need, you should consider what kind of final arrangements you will want and if you want there to be enough money left over to cover other debts that may have incurred at the end of your life.  

The average funeral in the United States typically costs around $7,000 to $10,000. These costs include funeral home services, burial or cremation, a casket or an urn, and the purchase and installation of a headstone at the cemetery.

Because of this, you may need more or less to carry out all of your final wishes. Generally, a $10,000 policy should cover all of these expenses.

Is Burial Insurance Worth It? 

If you’re worried about how your family will be able to pay for your eventual funeral and end-of-life expenses, then burial insurance is worth it. There are many factors to consider when deciding whether or not to get burial insurance.

However, you should first figure out how much strain will be on your beneficiaries upon your passing. If you’re struggling to get a standard life insurance policy, then burial insurance will be able to help you by offsetting the costs of your final expenses for your loved ones. 

If your family cannot quickly pay for your funeral when you die, burial insurance can be very worthwhile. It is easy to qualify for, comes in several policy types, and keeps your savings account intact for other needs.

What is Covered by Burial Insurance?

Burial insurance is explicitly catered to cover end-of-life expenses, whether this is your funeral, burial, cremation, medical bills, hospice costs, or anything that may leave a financial strain on your family. Specific things that burial insurance covers include

  • Embalming or preserving the body
  • A casket
  • Flowers
  • Cremation costs
  • A burial plot
  • Cost of transporting the body/cremation remains 
  • A headstone, including customized carving
  • Payment to the minister or priest
  • Rental fees for the venue where the memorial service is held
  • Cost to open and close the grave
  • Grave vault and/or grave liners

Burial insurance can be used to pay for anything; however, most companies cap coverage for burial life insurance at $50,000. It covers most types of deaths–however, there is a suicide clause for the first two policy years in all life insurance policies. 

How Does Burial Insurance Work?

A burial policy will offer benefits up to a specific limit. Upon your death, your beneficiary or beneficiaries can cash in the policy and use it as is directed.

It is a type of life insurance marketed towards seniors. Because insurers are targeting seniors with burial insurance, premiums are often higher as they deal with a higher-risk group. You will likely have to wait for a set period before the policy kicks in, and you can be covered up to 100 years old. 

Burial insurance can be purchased from most regular insurers or, in some states, through a funeral home that is licensed to provide it.

When you apply for a policy, you will have to fill out a form that might ask simple health questions, but you will not be required to undergo a medical exam. It is sometimes possible to purchase policies online, but it usually requires a phone call to an agent or insurance broker.

Working with a broker can help you to figure out the right policy for you. Once a policy is purchased, ensure that your beneficiary is aware of the policy, the policy number, and the agent who sold you the policy. 

Once everything is appropriately decided, filing a burial insurance claim is relatively easy. Your beneficiary notifies the insurance company, who then processes a check for the specified amount and gets it to you within days. 

How Much Does Burial Insurance Cost?

The most familiar face amount for burial insurance is $10,000, but it can range from $5,000 to $20,000.

Burial insurance policies, on average, cost between $50-$100 a month. Some standard rates for a $5,000 death benefit policy include

  • Man, age 50: $16, $20 with no health questions
  • Man, age 75: $51, $63 with no health questions
  • Woman, age 50: $14, $15 with no health questions
  • Woman, age 75: $38, $46 with no health questions

How Do I Choose Burial Insurance?

When you are choosing the right burial insurance plan for you, there are certain factors that you will want to consider. These factors include

  • How much coverage you will need
  • Whether or not the insurance provider has support services for your family
  • Whether or not you want to take a medical exam
  • How much is the average cost of funerals in your area is

Like shopping for a car, when shopping for burial insurance, every policy will have the same basic features but different finer details.

It is essential that you consider other burial insurance plans with what you hope to get out of the program.

Who Has the Best Burial Insurance?

The best burial insurance depends on your coverage needs. However, these burial insurance companies are considered the best: 

  • Mutual of Omaha.

Mutual of Omaha is very financially secure. THeir funeral expense policy is also known as “Living Promise.” Overall, this is considered the best plan by many people.

Their premiums have consistently been among the lowest, and many common health issues are accepted. Most applicants qualify for their immediate benefit plan. 

  • Aetna.

Aetna has been in business since 1853 and has maintained an A rating with A.M. Best. New coverage is offered to seniors as old as 89, which is very uncommon in life insurance policies where the cut of age is typically 85.

Their burial insurance offers competitive rates, and applicants are often approved for a no waiting period policy.

  • Royal Neighbors of America.

Royal Neighbors of America also maintain an A rating with A.M. Best.

Royal Neighbors of America will accept more health issues than other funeral life insurance companies, and their premiums are competitive compared with other carriers. They also include many valuable member benefits to their policyholders.

  • Foresters Financial.

Foresters Financial maintains an A rating with A.M. Best and is heavily involved in charities throughout the United States.

Their plans offer competitive premiums, quick approval times, and many accepted health conditions present among seniors. Every policyholder has access to many member benefits at no extra cost. 

  • Transamerica.

Transamerica’s Immediate Solution funeral life insurance policy brings together competitive premiums and lax underwriting. The company itself has strong financials, along with an A rating from A.M. Best.

Transamerica offers a unique plan that comes with no waiting period for those with high-risk conditions like COPD.   

How We Chose the Best Burial Insurance Companies.

The best burial insurance companies are selected through in-depth research of the overall best-rated companies by policyholders.

The best companies offer competitive premiums and benefits that you would struggle to find at other burial insurance companies. Out of all of the best burial insurance companies listed, you will be sure to find the one that is right for you. 

Burial Insurance Pros and Cons.

Though there are many upsides to getting burial insurance, there are also some cons that you should be aware of when making your decision. 

Pros of Burial Insurance.

A final expense policy can offer you peace of mind and ease the financial burden on your family when you are gone.

Burial insurance typically doesn’t require a medical exam, so burial insurance is an excellent option if you have a pre-existing condition that prevents you from getting a traditional term or whole life policy.

The coverage for burial insurance pays for funeral expenses, and the policy is straightforward. Fast approvals for coverage are available.

Your life insurance company will also make policies available to applicants with poor health, whereas many people are barred from specific insurance policies. You will not be denied a final expense insurance policy due to poor health.

In addition, policies with lower death benefits can be bought, making burial insurance a good solution for those who can’t afford life insurance policies over $50,000.

Cons of Burial Insurance.

Burial insurance, though it can be beneficial, can often be expensive.

Many policies have a two-year waiting period in the fine print, meaning that if you die of natural causes within the first two years of taking out the policy, your beneficiaries will not receive the total payout.

Instead of this, the insurer will reimburse your loved ones for the premiums you paid or give them a smaller amount.

However, as previously discussed, some burial insurance companies offer policies with no waiting period. Coverage amounts with burial insurance are minimal. Though it is expensive, it is essential to note that it is not as expensive as paying out of pocket.  

In addition to this, some insurers will provide you with incomplete information about final expense insurance policies. Insurers may choose to hide or complicate information about final expense insurance, and they may use scare tactics, leave out information about policies, or share confusing or misleading information.

Policies also have low death benefits–while this is good because it opens doors to affordability, it can cause problems as some people might lose money if they live longer than anticipated.

Certain insurers will try to steer you towards the wrong policies and push you towards restrictive and expensive policies. For this reason, make sure you go with one of our recommended burial insurance providers to make sure that you are getting the best policy you can.

Burial Insurance Rates.

Many other excellent burial insurance companies offer low rates, with some as low as less than $30 per month.

Providers such as Globe Life have monthly rates that start at $3.49 for adults and $2.17 for children or grandchildren.

What Can You Use Burial Insurance For?

Burial insurance can be used for your funeral expenses or for any burial/cremation expenses that you may have.

Your beneficiary can also decide to use your burial insurance for end-of-life costs like medical bills, loans, credit card bills, and hospice costs.

Best Burial Insurance Companies.

Many great burial insurance companies can offer you well-suited plans. Some of the best overall burial insurance companies are: 

  • AARP. AARP is one of the best burial insurance companies because of its excellent reputation and the financial strength of New York Life. With AARP, consumers can easily apply for a burial policy online and without a medical exam. However, AARP is not available nationwide, and there are limited benefits for the first two years.
  • Gerber Life Insurance. Gerber Life offers cut-and-dry burial insurance policies that have guaranteed approval for people between 50 and 80. The online application process is fast and easy, and Gerber Life offers fixed premiums. 
  • Foresters Financial. The three additional coverage riders that you receive in your policy with Forester Financial come at no extra cost and widen the scope of your coverage. Coverage lasts to age 121 and offers fixed premiums.
  • Globe Life. Globe Life has affordable burial insurance monthly rates for guaranteed burial insurance policies, such as rates for 50-year-old men and women for less than $30 per year. Global life also offers broad coverage amounts from $5,000 to $100,000. 
  • Mutual of Omaha. With Mutual of Omaha, you do not have to complete a medical exam or answer any questions about your health. Coverage is guaranteed up to age 85, whereas most other insurers stop at age 80. Mutual of Omaha has affordable rates for burial insurance and guaranteed coverage without medical underwriting. 
  • Colonial Penn. Colonial Penn provides excellent value to customers, as guaranteed burial insurance coverage rates are as low as $9.95 for all ages. No medical exam is required, and Colonial Penn offers free burial insurance quotes available online and affordable flat rates. Colonial Penn was also the first brand to offer a Guaranteed Acceptance insurance policy for people over 50.
  • AAA Life Insurance Company. AAA Life Insurance Company features a special membership discount for burial insurance with a $60 annual fee that is waived for AAA members. You also have the option to get bundle discounts on multi-policy premiums. 

What Does Burial Insurance Typically Include?

Burial insurance includes coverage for your funeral and end-of-life costs or any other costs that your beneficiary deems fit.

Different companies may offer additional benefits depending on factors such as your age and overall health.

Choosing Between Burial Insurance and Pre-need Insurance.

Though both pre-need and final expense insurance help covers your end-of-life costs, they have some key differences. With pre-need insurance, you purchase the insurance from a specific funeral home, and with burial insurance, coverage is purchased from a life insurance company.

Pre-need insurance is also priced out and paid ahead of time to the funeral home, whereas beneficiaries receive the payout when you have burial insurance.

The funeral home will always cover the costs of guaranteed services with pre-need insurance; however, with burial insurance, benefits are flexible and can be used to cover more than just final arrangements. 

With pre-need insurance, non-guaranteed services will need to be made up by the beneficiary. With burial insurance, benefits are portable and are not tied to any specific funeral home. Pre-need plans have details dependent on the individual funeral home, meaning that they are highly variable.

Burial insurance exists so that the insurer has established all of the terms for policyholders, making it more constant. The costs of pre-need plans are paid ahead of time, either all at once or slowly over time. With burial or final expense insurance, the money can be used for anything. 

If you consider a pre-need plan, you should be aware of the guaranteed and non-guaranteed services. If you live long after you set up your pre-need plan, then the costs of your funeral may increase. Whether these costs were guaranteed or non-guaranteed services would determine if your family has to make up the difference.

If the price of a guaranteed service has risen by the time you die, your family will not have to make up the difference as this service is guaranteed. Non-guaranteed services may lead to a difference in cost; however, your family will likely be responsible for paying. 

Though burial insurance and pre-need insurance both have their pros and cons, the decision on which to go with is ultimately up to you. Know all of the facts to make an informed decision and ensure that your choice is the right one for you. Pre-need can be offered as either a term life policy or a type of permanent policy.

Instead of paying the benefits of your policy to your beneficiary when you die, the money will go directly to the funeral service provider of your choosing. Compared to pre-need insurance, burial insurance is often a better deal.

What are the Benefits of Burial Insurance Plans vs. Other Types of Life Insurance Plans? 

As discussed, burial insurance plans are a more affordable way to pay for end-of-life costs without covering everything else that is included in life insurance plans. 

Is Burial Insurance Tax Deductible? 

Most death benefits will be tax-free, but you should always double-check with your insurance company in case they have a special kind of policy. This will ensure that your beneficiary does not have to deal with a significant income tax that could reduce their ability to pay for your funeral. 

Overall, whether or not burial insurance is worth it is up to your discretion. If you are looking to alleviate some of the stress off of your family, burial insurance is a great way to protect them from any unexpected end-of-life costs.

When shopping for burial insurance, make sure that you know all of the facts and consider some of the top burial insurance companies to help you make your end-of-life arrangements.

Looking for burial insurance doesn’t need to be overly complicated–knowing the best providers out there and precisely what you are looking for out of a policy is the perfect way to start. 

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