What is burial insurance? | SelectQuote (2024)

FAQs

What is burial insurance? | SelectQuote? ›

A: Unlike traditional term life insurance, burial insurance is intended to cover one-time or short-term expenses, such as funeral costs and end-of-life expenses. That said, it can help cover some outstanding debts depending on the policy amount.

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.

How does burial insurance work? 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.

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.

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.

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.

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.

You can assign any beneficiary you want, and they can use the payout for your funeral expenses, medical bills, final utility payments, and other outstanding bills. And if there is money left over, your beneficiary can do with it as they please.

Can you be denied burial insurance? Yes, it is possible to be denied coverage due to certain pre-existing medical conditions, however, you can get guaranteed acceptance to cover final expenses with a no medical exam life insurance policy.

What is not covered by a funeral plan? ›

It's cheaper to pay for your funeral plan upfront or over 12 months if interest free. It won't cover all funeral costs such as funeral notices, embalming, the headstone, or a burial plot. Check the plan can be moved to a new local funeral director if you move home and if there are any associated costs.

The survivors of those who have prepaid often misunderstand the contracts, are unaware of them, or find themselves surprised that there are additional fees to be paid. In addition, many states have inadequate laws protecting funds in pre-need plans, and money invested there could be at risk.

While a pre-paid funeral plan can cover a lot of your wishes, there are some details that can't be included. Things like funeral songs, for example, might not be guaranteed on the day. The following is also not usually included in a pre-paid funeral plan: Burial plot (this can cost £1,000s) and some burial fees.

Your loved ones' financial needs: If your loved ones will need helping with your loss of income or pay off debts after your passing, whole or term life insurance may suit you better. But if they'll only need help paying for a funeral, a final expense insurance policy may be the better option.

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!

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.

One of the primary differences between burial insurance and traditional life insurance is the expedited claims payout. Most conventional life policies take 14-60 days to pay a claim, whereas burial insurance plans can be paid in less than 72 hours. Read burial insurance vs life insurance for more details.

Preplanning a funeral is truly a gift to your family. But if you prepay, it's a gift to the funeral home. Doing the legwork and setting things up ahead of time so your family doesn't have to make a lot of financial decisions in the middle of an emotional situation shows them respect and consideration.

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.