How Burial Insurance Works

In the insurance business, we know it’s not comfortable to think about something like burial insurance.

After all, it’s one thing to sign up for a life insurance plan so that your loved ones will be taken care of after you pass.

It’s quite another to search for a plan that will take care of the specifics – the funeral, the casket, the cemetery plot, or cremation service.

Yet, families who are unwilling to plan for what happens immediately following a death are putting themselves in a much more difficult situation later.

The expenses of funeral services can become a huge burden on a family that is already dealing with grief, and a good burial insurance policy can greatly lessen the stress.

If you’ve been thinking about whether a burial insurance plan is right for you, take a look at the following guide. More than likely, you’ll realize that taking care of these details now is easy and affordable.

Costs of a Burial Service

Burial insurance seems to be one of the lesser-known plans simply because people don’t really know about the economic burden that follows a family member’s passing.

According to the most recent data involving national averages in the US, though, families can expect to pay somewhere between $7,000 and $10,000.

Because the prices for funeral services have increased so much in the past few decades, even standard funeral services start off around $5,000.

Here’s a quick run-down of some of the common expenses involved in funeral services:

  • Professional services such as the transfer of remains to the morgue, fees paid to the funeral home, embalming services, and preparation for funeral, can range anywhere from $3,000 to $4,500
  • Funeral expenses like payment of staff at the funeral home and during the service, facility fees, hearse, and family transportation, can easily exceed $1,200
  • The final wishes such as whether to be buried or cremated, comes with it’s own range of expenses. Caskets and vaults alone may cost around $4,000 while cemetery plots and monuments can range from $1,300 to $3,000
  • Cremation services can cost anywhere from $2,500 to almost $5,000

It’s important to note that these are just estimates, as the actual costs will depend on your state, your city or town, and how many service providers exist in your area.

As you can see, though, the costs of burial or funeral services are surprisingly high, even without all the bells and whistles. The best way to offset the cost is to plan ahead.

How to Find the Right Burial Insurance

If this is your first time thinking about after-death insurance, you probably have quite a few questions. To make things as clear as possible, we’ve put together a thorough guide with all the information and recommendations you might need.

To get started, let’s take some time to answer one common question we get:

What is the difference between burial, term, and permanent life insurance?

These three types of insurance plans all sound like they could cover the same thing, but it’s important to know the differences between each.

Burial Insurance

Burial Insurance is intended only to pay for the cost of the funeral expenses. It’s generally the most affordable and straightforward of the insurance plans that we’ll discuss.

Some of the other names you might see for burial insurance would be funeral insurance or final expense insurance.

Term Life Insurance

Term Life Insurance is a more broad type of insurance that you pay into for a set amount of time. Term life is offered in terms that are usually between 10-30 years, offered in 5-year increments.

During that period, your premiums won’t change, and in the case of your death, your beneficiaries will be paid the amount that you set up in your contract.

Generally, term life insurance plans are not specific to the after-death expenses but are rather intended to provide money for your family after you’re gone.

Permanent Life Insurance 

Permanent Life Insurance is very similar to term life insurance, except that it is not time-limited. Permanent policies also offer the ability to gain cash value over time, which can be borrowed against on a tax-deferred basis.

So, while a term insurance may cover you for 20 years, under the assumption that you will likely pass away before the end of the term, a permanent plan covers you for your whole life (usually through age 121).

These plans are the most expensive option because there are not many situations in which the insurance company wouldn’t have to pay for the benefits.

Guaranteed Issue Life Insurance

You might also hear the term Guaranteed Issue Life Insurance during your search for a life insurance plan, and this simply refers to plans that do not have stringent health or age requirements.

These plans are generally more expensive, but they are often the best option for individuals who would otherwise be rejected based on health problems.

No medical examination is required, and no health questions are asked. Guaranteed issue plans are usually accepted and issued within 24 hours, and usually come in face amounts lower than $50,000.

What Types of Burial Insurance Plans Are There?

Guaranteed Acceptance

This type of burial insurance is for those who are in poor health or are otherwise uninsurable. This type of coverage requires no medical exam or questions and is issued almost immediately.

Guaranteed acceptance burial insurance plans are the most expensive, as they have the most risk associated with them.

Final Expense Insurance

Final expense insurance is a type of burial insurance that specifically pays out only for the expenses incurred by the family of the deceased for funeral-related costs.

The death benefit is only allowed to be allocated towards final expense costs, whereas burial insurance is given to the beneficiary and is then spent as needed and seen fit.

Pre-Need Funeral Plans

These types of burial insurance are purchased through funeral homes and paid for in advanced, with a one time payment.

These usually come in packaged deals and are different for each funeral home and state. One thing to be conscious of with these plans is that they only cover what is listed and nothing more.

Burial Insurance

Burial insurance is insurance which usually covers up to $25,000 in face amount, but can even be as high as $50,000 or $100,000 in some cases, depending on the company.

Beneficiaries recieve the death benefit, and can spend the money as they see fit.

How Do Burial Insurance Policies Pay Out?

Graded Death Benefit

Graded death benefit burial plans offer contestability periods (usually 2 or 3 years), at the beginning of the policy, in which, if the insured dies in this time period, only a portion of the death benefit is paid out.

These policies are not recommended for people in very poor health or who have terminal illnesses, because it may cost their family more of the death benefit.

Level Death Benefit

Level death benefit burial plans pay out the full face amount of the policy if the insured dies. There is no contestability period.

What is the Best Age to Get Life Insurance?

The short answer to this question is right now. It’s never too early to start thinking about insurance plans, although your age and health status will have a lot to do with the type of insurance you should get.

Generally, people start thinking about life insurance either once they’ve passed a major milestone or have experienced a change in their health that has sparked thoughts about the future.

For many people, the search starts around 50 years old, though the younger anyone starts looking, the cheaper plans will be. Others may put off looking for an insurance plan, which can be tricky because many companies cap their plans at 85 years old.

In terms of age-appropriate insurance plans, the breakdown looks something like this:

Below Age 50 in Good Health

Term life insurance plan or burial insurance. Term life insurance plans will likely time out for these individuals, making them a less viable option for young people.

On the other hand, permanent life insurance will be at it’s cheapest for this age. But, it is still far more expensive than term life or burial, so it is not recommended for those looking for affordable life insurance coverage.

Because burial insurance tends to be the cheapest at any age, it’s also a good option.

Age 50 to 70 in Good Health

Term life insurance or burial insurance. These plans are generally the most popular for this age bracket. For those able to pay the high premiums of permanent life insurance, that, of course, is another good option.

Age 70+ in Good Health

Guaranteed issue burial insurance. At this age, it’s still possible to apply for other life insurances, but they will likely be either extremely expensive or may reject you. The best option is to look for a burial plan that is guaranteed

How Health Affects Burial Insurance Rates

In addition to age, health is another big factor in life insurance plans. Anyone with a life-threatening or terminal illness will struggle to find a term or permanent life insurance plan unless they find one that is guaranteed issue.

Burial insurance plans, though, often don’t have health requirements, and won’t change the monthly costs based on health issues.

As you probably noticed, burial insurance is the one type that is a great option for anyone, regardless of age, background or health.

Finding the Best Burial Insurance Company

Finding the right life insurance company is the most important thing you can do to ensure that your family is taken care of.

A good company will be honest and transparent with you while you work with them and make things infinitely easier for your family during a difficult time.

With that in mind, things like good customer service and business stability are going to be just as important as the plan itself, so make sure to look online for relevant reviews, and meet with a company representative to get a feel of the corporate culture.

If a life insurance company is unorganized, unclear, or even rude with you, chances are, they’re going to be the same when it comes to your family.

The Best Burial Insurance Companies 

Here are a few of the tried-and-true companies that offer various burial insurances for affordable rates.

Company A.M. Best Rating Customer Reviews
Mutual of Omaha A+ 4.1 / 5
AIG A 4.2 / 5
Foresters A 4.1 / 5
Prosperity A- 4.3 / 5
Americo A 4.1 / 5
Gerber A 4.0 / 5
Assurity A- 4.0 / 5
Great Western BBB+ 3.9 / 5

Mutual of Omaha

This company has been around for over 100 years, which means you can count on them to be stable in the future. They have multiple plans available based on age, health, and expected funeral expenses, and can cover up to $40,000

AIG Guaranteed Issue 

AIG does not require a health exam, making it available to anyone below 85 years old. Even those with chronic or terminal illness can get coverage. Their plans generally cover up to $25,000.

Foresters Burial Insurance 

This insurance company is stable here in the US; it’s also been providing burial insurance to Canada and the UK for about 140 years. Without shareholders, this company prides itself on providing only the best quality service and plans for their customers.

Prosperity Life Group 

Prosperity offers final expense life insurance that will cover up to $35,000 and is easy to apply for with no medical exam.


Another company on the list that is over 100 years old, Americo is a huge, respected company offering a range of options, with coverages of up to $30,000.

Some are standard whereas others are designed specifically for individuals with chronic or terminal illnesses, or who have suffered from a stroke.

Gerber Guaranteed Issue 

This is another guaranteed plan, so no need to pass a medical exam. It has a very high customer satisfaction rate and will cover up to $25,000.


This company has a variety of insurance plans, from term to whole to critical illness to accidental death. With all of these options, you know you’ll be able to find the right fit for your needs.

Great Western

What is unique about Great Western is that they’ve created unique plans for couples and families with children and grandchildren. As they’re guaranteed, you also don’t have to worry about a medical exam.

Finding the Best Burial Insurance Plan for You

While finding the right burial insurance may not be the most comfortable task, it’s incredibly important to make sure that your loved ones aren’t scrambling to figure out how to pay for your funeral when you’re gone.

By making smart decisions now about the type of insurance plan is best for you and doing your research into the most reliable companies out there, you won’t have to worry about anything later down the line.

The easiest way to ensure that you get the best burial insurance policy for your family’s needs is to work with an expert.

Our independent life insurance agents work with dozens of the world’s best burial insurance companies. They can help you compare policy options, coverage amounts, companies and more, in order to find the perfect burial insurance plan to protect your family.

Give us a call today to speak with an expert, or get staretd comparing burial insurance quotes online with our burial insurance rate comparison tool!

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