Casket at a funeral covered by burial insurance

What Is Burial Insurance?

Burial insurance, or a final expense plan, is a type of life insurance specifically designed to cover funeral and burial expenses for you or a family member. In its essence, burial insurance is basically a form of whole life insurance that covers you until you are 100 years old.

Why Have Burial Insurance?

It is useful for ensuring a proper burial for yourself or a loved one in order to save those who are grieving from worrying about financing the occasion. By purchasing a similar policy called "pre-need" insurance, you can make arrangements for your funeral in advance so that the plan is ready to implement when you pass. The pre-need policy allows the insured to pay in advance for any funeral needs, such as floral arrangements or a headstone.

Since burial insurance policies have limited coverage, they are considered to be among the most basic forms of life insurance. The policy is really only intended to take care of the burial process, and not to have longer-lasting sustainability for the loved ones who you leave behind. You can choose to cover just yourself or your entire family. Policies can range anywhere from $5000 to $25,000 in death benefits and usually cost around $2 to $3 per week, collected from the policy owner's home or drawn from their salary. The costs depend on the age of the policy-holder, but once it is purchased, the holder maintains the same rate for the entirety of the coverage. The death benefit will be however much coverage the premium will buy at the holder's current age. The policy will not expire; it is a permanent life insurance.

Where Can I Sign Up?

Burial insurance can be purchased through insurance brokers of companies that are authorized to sell life insurance. It can also occasionally be purchased from funeral homes that are licensed to sell these policies, though this is somewhat rare. No medical examination is required to apply, although you will have to answer a few health-related questions on the application. Burial insurance policies will be offered to individuals between the ages of 50 and 85, and sometimes to individuals older than 85. You can be rejected for a policy if you have certain health conditions, such as cancer, drug use, or a recent extended hospitalization. Despite these restrictions, most people can easily qualify.

Disadvantages of Burial Insurance

Some critics of burial insurance consider it to be a bad investment and argue that you may be better off just setting aside the money necessary to cover these expenses in a savings account. Since the amount of coverage you will receive is so circumstantial, it may be worth it to consider other insurance options first and return to burial insurance if you still consider it to be the best choice for you. Whatever coverage you decide to get, remember not to leave your final expense plans to the final moment or policies can get pretty expensive.