Burial or Funeral Insurance


An Introduction to Burial Insurance




Funeral insurance, burial insurance, final expense insurance, preneed funeral insurance—these terms are often used interchangeably to talk about the same thing. With any of these types of insurance, money is paid out to a beneficiary to cover part or all of your funeral costs, including everything from traditional burial to cremation.


Unlike other types of insurance, which are designed around a “what-if” scenario (what if I crash my car, what if I need to go to the doctor, what if my home catches on fire), burial insurance is a guaranteed pay out. As long as you keep current on your premiums or pay the amount required up front, this money will be available upon your eventual death.

What Burial Insurance Covers


As the name suggests, burial insurance is most often used to pay for a burial. Because funerals can cost anywhere from $2,000 to up to $20,000, it’s rare for a family to have all of the money on hand at the time of a loved one’s death. Burial insurance takes the stress out of funeral planning by ensuring that the money is earmarked in advance.

However, one unique feature of burial insurance is that the funds don’t have to go 100 percent to funeral costs. In most cases, it pays out the same way a life insurance policy would, in that a lump sum is provided upon death. The idea is that the person named beneficiary will then use that money to pay for the funeral (as well as other final expenses like medical bills, hospice charges, estate fees, or to settle accounts in the name of the deceased).

Should you wish it, you can ensure that burial insurance goes directly toward your funeral by naming a funeral home as the beneficiary and signing a contract for future services. Like any other kind of pre-need arrangement, this provides a way for you to cover all costs in advance and to make sure your wishes are carried out.


Why Get Burial Insurance?

Most people who purchase funeral or burial insurance do so as part of their regular retirement or financial planning. When you’re already preparing yourself for the future, it makes sense to include a stipulation for your death as well as your end of life.


Benefits to burial insurance include:


  • Ensuring your family will not have to pay out of pocket for your funeral
  • Saving money by locking in rates or making pre-arrangements
  • Providing a quicker payout than you get from traditional life insurance or an estate in probate
  • Allowing your family freedom of choice to plan your funeral (without the burden of cost)

Just as no two home or car insurance policies are the same, so too do you have choices when it comes to burial insurance. Always be aware of the fine print and total financial investment before you sign any contracts.

 A burial insurance policy can be an ideal way to manage your final burial and funeral expenses, especially if you do not have an existing life insurance policy. Setting up a funeral, cremation or burial policy allows you to make small affordable payments over time. If you prefer to have a separate policy to specifically address your final expenses, burial insurance may be ideal for you.


Burial insurance might not take away the pain of a death, but it can make funeral planning management and it can help with funeral costs after a sudden loss.  Just like health insurance, burial expense insurance helps to defray the costs of your funeral and your burial. Even with inflation, you can plan for the costs of your death to be minimal, if present at all. No one wants to go to a funeral, cry, and then be handed a bill, though in a discreet and compassionate way. Funeral directors do need to be paid, after all. With a burial insurance plan, you can ensure no one but you is paying for your death.

Have you purchased or thought about purchasing burial insurance?  Please share your thoughts below.

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1 thought on “Burial or Funeral Insurance

  1. I appreciate the information on the benefits of funeral insurance. I agree that it makes sense to be thinking about the future and to be thinking about how your family is going to deal with your death. I would imagine it is a lot less stressful for them if they don’t have to worry about finances and planning during that time.

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