Understanding Burial Policies
A burial policy, also known as final expense insurance, is a type of life insurance designed specifically to cover funeral costs, medical bills, and other end-of-life expenses. These policies typically offer smaller death benefits compared to traditional life insurance, making them a more affordable option for those who may not need or qualify for a larger policy. Here’s a direct breakdown of when burial insurance is worth it and when it’s not.
When Burial Insurance Is Worth It
1. You’re Over 60 With Serious Health Conditions
If you’ve been declined for traditional life insurance due to health issues—like COPD, congestive heart failure, cancer history, or multiple medications—burial insurance (especially guaranteed issue policies) can be a lifeline. These plans don’t require a medical exam and often have minimal health questions or none at all.
Why it matters: Burial insurance may be your only path to leaving behind funds for final expenses.
2. You Don’t Have Any Life Insurance or Savings
If you don’t have existing coverage and your savings wouldn’t cover a $10,000–$15,000 funeral, your family will be stuck with the bill. A small burial policy can relieve that burden.
Why it matters: Without it, your survivors may have to go into debt or set up a crowdfunding page to pay for your burial.
3. You’re on a Fixed Income and Need Predictable, Lifetime Coverage
Most burial policies have level premiums that never go up and are guaranteed to last your entire life. If you’re living on Social Security or a pension, this predictability can be a smart tradeoff.
Why it matters: You get peace of mind knowing your policy will never expire or increase in cost.
4. You Want to Leave Something Behind, No Matter What
Even if the death benefit is small ($5,000 to $25,000), a burial policy ensures your family receives a lump sum when you die. For many, that small legacy matters—especially when it prevents loved ones from scrambling for money.
Why it matters: Final expense insurance offers a guaranteed way to pass on funds, even if you live longer than expected or don’t build up savings.
5. You’re Older and Don’t Want to Go Through a Medical Exam
Simplified issue and guaranteed issue burial insurance policies don’t require physical exams. You don’t need to schedule appointments or deal with lab work—coverage can be approved in days.
Why it matters: It’s fast, easy, and hassle-free when other coverage options are too much work or out of reach.
When Burial Insurance Is Not Worth It
1. You’re Healthy and Under Age 65
If you’re in decent health, you can qualify for a term or whole life policy with much better value. These policies offer significantly more coverage for the same or lower monthly cost.
Why it matters: Burial insurance offers poor cost-to-benefit value compared to other options for healthy individuals.
2. You Already Have a Life Insurance Policy
If you already own a term or permanent life insurance policy with enough coverage to pay for funeral and end-of-life expenses, adding burial insurance is usually redundant.
Why it matters: You’re paying for something you don’t need.
3. You Have Sufficient Liquid Assets
If your savings, investments, or retirement accounts could easily cover your final expenses, buying insurance for this purpose is unnecessary.
Why it matters: Self-funding funeral costs is often cheaper than paying lifelong premiums for a small payout.
4. You’re Buying It for the Cash Value
Burial insurance does build cash value, but very slowly. It’s not a useful tool for savings, loans, or building wealth.
Why it matters: If you want life insurance with meaningful cash value growth, consider traditional whole life or indexed universal life instead.
5. You Don’t Understand the Graded Death Benefit
Guaranteed issue burial policies come with a waiting period (usually 2 years). If you die during that time (non-accident), the insurance company only returns your premiums plus interest—not the full death benefit.
Why it matters: If you’re buying this without knowing about the waiting period, you’re not getting what you think you are.
Bottom Line
Burial insurance is worth it when you:
- Have no other way to qualify for coverage
- Are older or in poor health
- Need lifelong, predictable protection for final expenses
- Want to avoid burdening your loved ones
Burial insurance is not worth it when you:
- Are healthy and can qualify for better coverage
- Already have sufficient insurance or savings
- Expect the policy to be a savings or investment tool
Still unsure which path makes the most financial sense for your situation? Contact The Annuity Expert to compare burial insurance with other options like term life, guaranteed universal life, or annuities with enhanced death benefits. We’ll give you free quotes and help you avoid wasting money on the wrong plan.
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