Burial Insurance, Final Expense Insurance, and Funeral Insurance: What You Need To Know

Shawn Plummer

CEO, The Annuity Expert

Does life insurance pay for funeral expenses? Burial insurance, also known as final expense insurance and funeral insurance, is a relatively unknown product among many consumers. Yet, it can be an important part of your financial plan to ensure that you have the money for burial costs if something happens. This guide will look at what burial insurance is and how you can get more information about it.

What is Burial Insurance?

Burial insurance, also known as Final Expense Insurance, covers the cost of expenses when you die. For example, it pays for getting your body treated, a funeral, or cremation.

Final expense insurance is for people who don’t have any other life insurance. Funerals can cost a lot of money, so you should get this type of life insurance to pay for it.

The insurance is permanent and never expires as long you pay the premiums.

Coverage is for small amounts. It’s for when you don’t have the money and want to pay for your funeral. Coverage is also good if you’re an adult child of an elderly parent who can’t afford to pay for these expenses themselves.

Final expense insurance policies have higher premiums for limited coverage, so you’ll want to consider other sources of funding if you or your family could otherwise afford it.

What is Final Expense Insurance?

Final expense insurance is a life insurance policy with a small death benefit for funeral and “final expense” costs. There is no difference between burial and final expense insurance.

What is Preneed Funeral Insurance

Like burial insurance, preneed funeral insurance sets aside money for your funeral before you die. This type of insurance is good because it protects your loved ones from having to pay for it when you are dead.

It covers the cost of your funeral. It will pay for things like the cost of a standard funeral home service, funeral merchandise, and church and burial services. You can also lock into today’s prices for those things so that you do not have to worry about it if they go up in price.

The Difference Between Burial Insurance and Preneed Funeral Insurance

When you die, instead of giving the money to your beneficiary (Burial Insurance), the death benefit goes right to the funeral home (Funeral Insurance).

How Much Does a Funeral Cost?

The average funeral costs $7,000 to $12,000. This includes the cost of viewing and burial, basic service fees, transporting remains to a funeral home. The average cost with cremation is $6,000 to $7,000. These costs do not include a cemetery monument or marker.

In the 1980s, a funeral cost $2,000. Today, it can cost up to $9,000 or more if you bury or cremate the body. In addition, you might have to pay thousands of dollars for a casket, depending on what type of materials you want.

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Burial Insurance Rates

These are sample monthly premium rates based on age, gender, coverage amount, Preferred status, and non-tobacco consumers.

AgeGender$20k$25k$30k$40k
55Female$52.21$64.46$76.71$101.21
Male$65.30$80.81$96.32$134.18
65Female$78.82$97.72$116.63$154.43
Male$109.75$136.39$163.03$216.31
75Female$141.62$176.22$210.82$280.03
Male$196.74$254.13$293.51$390.28
80Female$193.66$241.28$288.89$384.12
Male$276.26$334.52$412.78$549.31

Burial Insurance = No Medical Exams

The final expense insurance comes in two forms:

  • Simplified Issue
  • Guaranteed Issue

Simplified Issue Life Insurance

You can get simplified life insurance if you are at moderate risk. You have to answer a detailed questionnaire, but there is no medical exam. However, you will still pay more than with term life insurance coverage.

Simplified issue life insurance means that you can skip the medical exam. It’s called a “no exam policy.” You still have to fill out the health questionnaire, though. In addition, you have to answer questions about smoking habits and serious illnesses. There also may be a phone interview with the insurance company’s medical underwriting department.

If you are over a certain age, have medical problems, or cannot fill out the application yourself, you might not be eligible for simplified issue life insurance.

Guaranteed Issue Life Insurance

Being approved for coverage is near certain with a guaranteed issue policy. With this type of plan, you can expect to pay higher rates and lower maximum coverage amounts than simplified issue plans.

Guaranteed issue life insurance coverage means that you do not have to answer questions about your health or take a test. Instead, you fill out the application and pay the premium. The company will give you coverage, as long as you can pay it.

If an applicant can’t answer questions on the application due to advanced dementia or Alzheimer’s, they would not qualify for guaranteed issue life insurance.

Burial Insurance Pros and Cons

Pros

  • The coverage pays for funeral expenses.
  • The policy is straighforward.
  • Fast approvals for coverage.

Cons

  • Coverage amounts are very limited.
  • Can be expensive, but not as expensive as paying out of pocket.

A Cheaper Alternative

A cheaper alternative for consumers seeking primarily to pay for the funeral expenses, level term life insurance, offers coverage at a fraction of the cost.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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