Is Burial Insurance Worth It?
Burial insurance is worth it if your family would struggle to pay for a funeral out of pocket and you don’t already have savings or life insurance set aside for it. If that’s already covered, you probably don’t need it. Below, we’ll look at what it costs, who it helps most, and how to decide for yourself.
What burial insurance is
Burial insurance, also called final expense insurance, is a small whole life policy meant to cover end-of-life costs. You pay a fixed premium, and when you pass away the policy pays the person you name.
The money goes to your beneficiary, not to a funeral home. Your family can use it for the funeral, burial or cremation, medical bills, or any other bills left behind.
Many of these policies don’t require a medical exam, which is why they’re popular with people in their 60s, 70s, and 80s, including those with health conditions.
What a funeral costs
The median funeral with a viewing and burial cost $8,300 in 2023, and a funeral with a viewing and cremation cost $6,280, according to the National Funeral Directors Association’s 2023 General Price List Study. NerdWallet’s summary of the NFDA data puts the burial figure at $9,995 with a burial vault.
Those numbers leave out the cemetery plot, headstone, and flowers, so the final bill is usually higher once those are added.
Burial insurance premiums depend on your age, health, and the amount of coverage. On a whole life policy the premium is fixed when you start and doesn’t go up as you get older. A quote is the only way to see your exact number.
When it’s worth it
Burial insurance tends to make sense when:
- You have little or no savings set aside for final costs, and your family would have to cover the bill.
- You don’t have a life insurance policy that will still be active when you pass away, such as a term policy that has expired.
- Health conditions make traditional life insurance hard to qualify for. Some burial policies ask few or no health questions.
- You don’t want your spouse or children raising money or using credit cards at a hard time.
- You want the cost locked in, since the premium stays level for the life of a whole life policy.
When it may not be worth it
Burial insurance may not be the right fit when:
- You have enough savings, or an account set aside, to cover final costs.
- You already have permanent life insurance, or a policy that will last, and it’s large enough to cover them.
- You can’t comfortably keep up the premium for life. A policy that lapses because payments stop usually pays nothing.
One thing to watch is the waiting period. Many policies with no health questions pay only a limited benefit if death happens in the first two years. Policies with health questions often pay in full from day one. Ask any agent which type you’re being offered.
How to decide
Ask yourself these four questions:
- Could my family pay for a funeral costing roughly $8,300 to $10,000 without hardship?
- Do I have life insurance that will still be active when I pass away, and is it enough?
- Can I keep up a fixed monthly premium for the rest of my life?
- Would my health limit which policies I can get?
If the answer to the first two is no and the third is yes, it’s worth getting a quote. The fourth tells you which type of policy to look at.
Common questions
Is burial insurance the same as life insurance? Burial insurance is a type of life insurance. It’s usually a smaller whole life policy with easier approval, meant for final costs.
Can I buy burial insurance for my parents? Often yes, but your parent has to agree and take part in the application.
Can I get burial insurance with a health condition? Many people can. Some policies ask a few health questions and some ask none. Which one you qualify for depends on your health, and an independent agent can check several carriers at once.
Does it pay out right away? Some policies pay the full benefit from day one. Others have a waiting period, often two years, with a limited benefit during that time.
How much does it cost per month? It depends on your age, health, and coverage amount. Once a whole life policy starts, the premium stays the same.
Get a quote
Amy Plunkett is an independent insurance agent at Plunkett Insurance Services in Castor, Louisiana. She can compare burial and final expense policies from more than 20 carriers, for ages newborn to 90, in person or by phone. Contact Amy to see what coverage would cost you.