What is the Difference Between Burial Insurance and Life Insurance?
Burial insurance and life insurance are both designed to provide financial support after a person’s death, but they serve different purposes and have distinct features.
- Purpose: Specifically intended to cover funeral and burial expenses.
- Coverage Amount: Typically offers lower coverage amounts, usually between $5,000 and $25,000.
- Policy Type: Usually a type of whole life insurance policy.
- Underwriting: Often has simplified underwriting, sometimes with no medical exam required.
- Premiums: Generally have higher premiums per thousand dollars of coverage compared to traditional life insurance.
- Age Consideration: Often marketed to older individuals.
Related Reading: Can You Buy Burial Insurance For Someone Else?
- Purpose: Provides financial support to beneficiaries, which can be used for any purpose, including debts, living expenses, education, or funeral costs.
- Coverage Amount: Offers higher coverage amounts, often necessary to support dependents or cover significant debts.
- Policy Types: Includes term life insurance (for a specified term) and whole life insurance (permanent coverage).
- Underwriting: Typically requires more comprehensive underwriting, including health questions and possibly a medical exam.
- Premiums: Varies widely based on policy type, coverage amount, term, and the insured’s age and health.
- Flexibility: Beneficiaries can use the death benefit for various needs, not just funeral expenses.
- Coverage Scope: Burial insurance is specifically for funeral expenses, whereas life insurance covers a broader range of financial needs.
- Policy Size: Burial insurance policies are smaller in coverage amount compared to life insurance policies.
- Cost-effectiveness: Per unit of coverage, life insurance often offers more value for the premium paid, especially for those in good health.
- Ease of Qualification: Burial insurance is easier to qualify for, especially for older or less healthy individuals.
Choosing between burial insurance and life insurance depends on your financial goals and needs. Burial insurance is suitable for covering funeral expenses, while life insurance provides comprehensive financial support for a variety of needs. Understanding the differences helps in making an informed decision that aligns with your financial planning. Contact us today for a free quote.
Need Help Getting Life Insurance Coverage?
Contact us if you need help purchasing a life insurance policy. The service is free of charge.
Frequently Asked Questions
What is better, life insurance or burial insurance?
Burial insurance covers funeral and burial costs, while whole life insurance provides financial support to your family for their living expenses. Life insurance replaces your income, pays off debts, finances your child’s college, funds your spouse’s retirement, and can cover final expenses.
Which type of insurance would most often pay for funeral expenses?
An everyday use for life insurance is to cover the expenses associated with a funeral. When purchasing a policy, you can select a beneficiary who will receive the death benefit in the event of your passing.
Is life insurance the same as a burial?
Life insurance policies pay the insured individual’s beneficiaries upon their death. On the other hand, burial insurance grants a fixed amount of money specifically for covering the costs of funeral expenses. It’s essential to note that standard life insurance policies may not provide a payout if the individual passes away due to natural causes. In contrast, some burial insurance policies may cover those instances.