Burial Insurance: The Definitive Guide to Final Expense Life Insurance

burial insuranceAccording to the 2016 Life Insurance Barometer study by Limra, the most common reason for owning life insurance is to cover burial and other final expenses. It’s no surprise that many people look for burial insurance, or final expense life insurance to meet these needs.

Burial insurance was created as a way to cover the expenses that come along with passing away like burial, cremation, funeral service, casket, etc. You will hear it referred to as final expense life insurance, funeral insurance, or burial insurance. With the average cost of a funeral between $7,000 and $10,000, it is important to have some form of burial insurance in place to prevent placing a financial burden on family members.

In this definitive guide to burial insurance, I will cover:

What is final expense life insurance?

Often referred to as burial insurance, final expense life insurance is a form of permanent life insurance that is often used to cover the expenses associated with passing away. Things like medical costs, funeral, burial or cremation.

Since it is permanent life insurance, meaning that it does not expire, it is more expensive than term life insurance per $1,000 of coverage. Unlike term life insurance, permanent life insurance policies accumulate cash value which can later be borrowed from or surrendered for cash value. Generally speaking, final expense permanent life insurance policy with up to $50,000 of coverage.

What is covered by burial insurance?

The interesting thing about burial insurance is that “burial insurance” is just a nickname for the actual product you are buying, which is a small whole life insurance policy. The death benefit can be used on anything, and it is not required to be spent of funeral expenses. The beneficiary of the policy is also not required to cover the cost of a funeral or related expense.

Is it worth buying burial insurance?

Yes, if you currently have no means of covering the final expenses in the event of your death. Assuming a burial and related expenses are going to cost around $10,000, there are other ways to plan for this expense besides life insurance. It is important to plan for the unexpected, and a small whole life policy to cover burial expenses is a smart idea if you have no other plans in place.

The Importance of Having a Plan in Place

In the event of your untimely passing, the last thing you want to leave behind is a financially burdened family or spouse. Whether it be a retirement account, whole or term life insurance it is vital to have some form of plan in place. Remember, when the policy pays out, the death benefit goes to the beneficiary. If the beneficiary is the estate, then the money may be used to settle the deceased’s estate and not be able to cover funeral expenses.

What is the difference between life insurance and burial insurance?

Life insurance and burial insurance are the same. A death benefit is paid to the beneficiary after the insured has passed away assuming it is past the contestability period. As mentioned above, burial insurance is a phrase used to describe a small whole life policy, usually with a death benefit of $5,000 to $50,000. It is not to be confused with term life insurance, which can expire after the set term length but allows for more affordable rates for high coverage amounts.

Alternatives to Burial Insurance

Some of the alternatives to final expense insurance are savings accounts, cash like assets, and stocks and bonds. If you don’t have any money set aside, or have considerable debt, you may want to consider a term policy with a larger death benefit.

Importance of Buying It Young

It’s no secret that the younger and healthier you are, the cheaper your life insurance rates tend to be. Also, a parent passing away is less likely to have happened the younger you are. The early death of a parent can have an effect on the price you pay for life insurance.

Many millennials report that they do not have life insurance because they cannot afford it. I would suggest that you get a life insurance quote for final expense as well as term coverage to see how affordable it can be. Often times, you can buy life insurance coverage for the same price as a Netflix subscription.

Burial Insurance for Parents and Seniors

In some cases, your elders may not be able to purchase insurance themselves. In some cases, you may be able to purchase final expense life insurance for your parents. The legal requirements vary from state to state, and you will have to have insurable interest in the insured.

For healthy seniors or parents, you will be able to get a term or final expense life policy. The term policy will require a medical examination, while the final expense will not. For seniors or parents with health problems, there are graded benefit no exam life insurance policies, but the insured usually only gets partial coverage for the first two years of the policy with the full amount kicking in year 3.

Choosing a Burial Insurance Policy

First you want to determine the amount of coverage that is necessary. With the average cost of a funeral ringing in at around $10,000, you will want at least that much. You will then want to visit reputable web sites and call a few brokerages and get quotes for what you are looking for. You can call one of our licensed agents here at NoExam.com at 888-407-0714 and they would be happy to run some burial insurance quotes.

Stay away from any agent or company that gives you obvious red flags such as not being able to explain what you are buying or using high pressure sales tactics.

Burial Insurance Quotes – How much does burial insurance cost?

With a product like Phoenix Life Insurance Remembrance, you can expect the following rates for someone who is a male nonsmoker looking for a coverage amount of $15,000.

For those ages 30-40, the premium is $360 per year, or $30 per month. For those over 40, I have included some sample rates so you can get an idea of what your rate will be.

Age 45: $36.40 Per Month

Age 50: $43.16 Per Month

Age 55: $51.51 Per Month

Age 60: $62.84 Per Month

Age 65: $81.68 Per Month

Age 70: $107.04 Per Month

Age 75: $149.07 Per Month

What is the best burial insurance? Burial Life Insurance Companies:

Here are some of the top life insurance companies that offer burial life insurance:

North American – Their LifeVue Whole Life product is available for those age 50-80 with coverage amounts ranging from $5,000 to $35,000.

Mutual of Omaha – Offers their Living Promise Whole Life product for those age 45-85 with coverage amounts ranging from $2,000 to $40,000.

SagicorSagicor Life’s Sage No Lapse Universal Life is available without a medical exam for those age 18-65, over 65 must take a health exam. They offer coverage amounts starting at $25,000.

Fidelity – RAPIDecision Senior Whole Life available for those age 50-85 with coverage amounts ranging from $10,000 to $150,000.

Assurity – LifeScape Simplified Whole Life.  Available for those under the age of 80 with coverage amounts ranging from $5,000 to $50,000.

Phoenix – Remembrance Life Simplified Issue whole life is available for those age 30-80 and does not require a medical exam. It has coverage amounts from $10,000 to $100,000 depending on age.

Jonathan Holloway

Jonathan is a licensed life insurance agent at NoExam.com that writes about insurance, personal finance, lifestyle, and sports. See his latest post reviewing the Gerber Grow-Up Plan.


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