Is Burial Insurance Worth It? (2024)

Burial insurance is a type of life insurance policy that can be used to cover funeral expenses. Learn more to find out how it works and if it’s worth it for you.

Whether or not burial insurance is worth it depends on a number of factors. These include your health, the amount of coverage you need, and your reasons for wanting this type of life insurance policy. If you need a policy that will provide a substantial death benefit to cover a mortgage or provide income replacement when you pass away, this may not be the best choice. However, if you want a simple policy that offers guaranteed coverage, doesn’t require a medical exam, and can help your loved ones take care of your final expenses, this could be the right choice for you. Such a policy can cover the basic costs of your funeral and burial.

Do I need burial insurance if I have life insurance?

It’s not a case of life insurance vs. burial insurance. In fact, burial insurance is a type of life insurance that can provide the financial resources to cover your final expenses. Plus, it could cover outstanding debts that you leave behind, such as credit card debt and medical bills.

Why a burial insurance policy?

Losing a loved one is a particularly traumatic event. On top of the emotional stress, there are significant expenses that come at the end of life. Burial insurance (sometimes called funeral insurance or final expense insurance) can help pay for the cost of the funeral and for burial or cremation services. This may include a burial plot, a burial vault, a casket, flowers, a funeral home service, a headstone, obituary notices, transportation, and an urn service.

The average cost of a funeral and burial in the United States is $7,848.¹ If you get a vault—required by many cemeteries—that number rises to $9,420.¹ The average cost of a funeral and cremation is a little lower, at $6,971.1 Purchasing a burial insurance policy, or final expense insurance, is a helpful way to ease the financial burden on the people you love.

Please note that some life insurance companies—including New York Life—don't sell stand-alone burial insurance as a product. Instead, you can buy a separate, smaller life insurance policy to cover final expenses. Roughly six in 10 men own life insurance, while for women it’s less than one in five.² Financial burdens can continue long after a funeral, so it’s important that you consider both final expense insurance and a more comprehensive life insurance policy.

You should consider adding a burial insurance policy:

If you are single

Purchasing a burial insurance policy (or a small life insurance policy designed to cover final expenses) can help prevent the passing of any substantial debt to surviving family members. In addition, a more robust whole or term life insurance policy can help you provide financial support to aging parents or siblings.

If you have a young family

Burial insurance covers funeral and burial expenses; whole life insurance can help give your family members the resources they need to maintain their lifestyle. Life insurance can replace some or all of your income, pay off debts, help pay college tuition, help fund your spouse’s retirement, and cover final expenses.

Life insurance can cover funeral costs; it also replaces income, pays off debts, and helps with college tuition.

If you have an established family

Whole life insurance can be an important part of your overall retirement planning. Additional insurance to cover final expenses can help ensure that your loved ones will not be burdened with debt should you pass away.

If you’re nearing retirement or are already retired

Supplementing your life insurance policy with burial insurance will allow you to settle your affairs by covering funeral costs and any other unexpected final expenses. A more robust life insurance policy will protect the financial future of your family and preserve the retirement you and your spouse worked so hard for.

Are life insurance and burial insurance the same?

No, but they are similar. In fact, a burial insurance policy is a smaller whole life policy that can help your loved ones cover your end-of-life expenses, including funeral services, burial, and cremation. It is considered a type of life insurance policy, but it offers a smaller benefit amount than traditional life insurance policies, since its purpose is very specific.

Does life insurance cover burial costs?

Yes, life insurance policies will pay a lump sum when you die to a beneficiary of your choice. That money can be used to pay for your funeral or for any other general financial needs of your survivors. The payment will be made to your beneficiary soon after you die, and it doesn't have to go through probate.

¹Katia Iervasi, “How Much Does a Funeral Cost in 2023?,” Life Insurance Finder, March 1, 2023. https://www.finder.com/life-insurance/average-funeral-cost

²Chauncey Crail, “Life Insurance Statistics, Data and Industry Trends,” Forbes Advisor, January 2, 2023. https://www.forbes.com/advisor/life-insurance/life-insurance-statistics/

FAQs

What are the cons of burial insurance? ›

But burial insurance is expensive, and many policies have a two-year waiting period in the fine print. This means that if you die of natural causes within the first two years of taking out the policy, your beneficiaries won't receive the full payout.

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What does burial insurance not cover? ›

Unlike traditional term, whole life, and universal life policies, burial insurance is specifically designed to cover one-time and short-term expenses. It isn't meant to replace income or cover large expenses like purchasing a home or paying for college. It isn't a type of retirement plan or investment either.

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Is it worth getting funeral insurance? ›

Purchasing a burial insurance policy (or a small life insurance policy designed to cover final expenses) can help prevent the passing of any substantial debt to surviving family members. In addition, a more robust whole or term life insurance policy can help you provide financial support to aging parents or siblings.

What happens with burial insurance when someone dies? ›

Burial insurance covers the cost of your funeral and/or cremation expenses after you pass away. It can also be used at the beneficiary's discretion to pay off debts including any medical bills, mortgage loans, or credit card bills.

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What age should I get burial insurance? ›

Coverage is typically available for those between the ages of 50 and 85. One of the benefits of burial insurance is that it doesn't require a medical exam to qualify. Depending on the type of policy you pursue, even those without health insurance or who have a pre-existing condition can usually obtain a policy.

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How long does it take for burial insurance to pay out? ›

Q: How long does it take to receive a payout for burial insurance? A: While every situation is different and timing can vary, many insurance companies will typically payout the burial insurance 14-60 days following a claim.

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How much is a $10,000 burial policy? ›

The average cost for a burial insurance policy is approximately $50-$100 monthly for roughly $10,000 in coverage. Multiple factors determine the net price, including your exact age, health, tobacco usage (if any), the type of policy, state of residence, and how much coverage you buy.

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Does burial insurance cover the plot? ›

Once in force, a Burial Insurance policy can pay your funeral expenses quickly. It'll cover costs that may include your burial plot, cemetery fees, grave marker, casket, cremation, embalming, flowers, hearse, and other final expenses.

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What are the two types of burial insurance? ›

There are two types of burial insurance: simplified issue or guaranteed issue. This makes it possible for seniors to acquire life insurance at an older age and even when they have some health problems. So, if you are worried about your health and eligibility, you should still request a free quote from us!

Does burial insurance have a waiting period? ›

Most burial insurance policies have no waiting period, but some do. The only ones with no waiting period don't require a medical exam. However, you must answer questions about your health history to determine if you're eligible for immediate coverage.

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Is burial insurance cheaper than life insurance? ›

Final expense insurance is a small permanent plan designed to help cover expenses like funeral costs and medical bills. Death benefits are smaller than traditional whole life insurance policies, but premiums are often lower than other policies.

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What are the disadvantages of funeral insurance? ›

Potential Disadvantages of Burial Insurance

Limited Coverage: Burial insurance policies typically have lower coverage amounts than traditional life insurance, which may not be sufficient for other financial obligations or to provide ongoing support for your dependents.

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Can you be denied burial insurance? ›

To qualify for immediate coverage, you must apply with a company that asks you health questions. In contrast, there are plans without health questions (guaranteed acceptance). With those, you cannot be denied, but there is a two-year waiting period.

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Does burial insurance have cash value? ›

Burial insurance is a cash policy, which means it builds a cash value over time. Burial insurance can be purchased for small amounts, such as $5,000 and $10,000, while other term or whole life insurance may require substantially larger minimum coverage.

Are funeral plans risky? ›

As you compare your options, it's easy to see why most industry experts advise against prepaid funeral plans. Even though the concept seems like a good idea, too many factors can change your circ*mstances between now and the funeral.

Are prepaid burial policies a good idea? ›

More and more people are pre-planning their funerals to save loved ones the stress of having to do it during such an emotional time. And when you make your own arrangements, it can also save money because you can specify which type of service you want. But not all pre-paid funeral plans make sense financially.

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