Burial insurance ensures that the cost of laying a person to rest does not become an additional burden on an already grieving family.
Burial insurance is typically a stand-alone policy taken by those who may have difficulty obtaining standard life insurance.
In many cases, acceptance for this type of insurance is guaranteed with no physical exam or interview necessary.
After weighing the pros and cons of numerous burial insurance policies, our team of experts determined that the following are the best burial insurance options for 2020.
1. AARP Easy Acceptance Life Insurance
AARP is the world’s largest senior advocacy organization. They boast nearly 40 million members and are a force in Washington DC and statehouses nationwide. In this case, they’ve teamed up with New York Life to offer high-quality, affordable burial insurance.
What we like: You can get up to $25,000 in burial coverage with no medical exam. The coverage is available to anyone 50 to 80 and good for the duration of their life. Signup is easy, and rates are guaranteed never to increase.
Flaws: Not available in Montana, Minnesota or Missouri. Restricted benefits for the first two years.
2. Fidelity Life
In 2021 Fidelity Life will celebrate 125 years in business. It’s a financially sound company that offers reliable insurance products at generally competitive rates. Their comprehensive burial insurance is a good choice for those who plan more involved funerals.
What we like: People may apply for Fidelity burial insurance up to age 85. There is no waiting period, and the monthly premium will never increase. After two years, you can borrow against the cash value of the policy.
Flaws: A physical exam is required.
3. Gerber Life
Gerber Life burial insurance is a bit of an outlier for a company that focuses mainly on insurance for children. But this will be an attractive option for those who want a significant amount of coverage and a hassle-free signup process.
What we like: The online application process is simple and fast. In just a few minutes, you can have $25,000 in coverage for final expenses. Approval is guaranteed for anyone between 50 and 80, with payouts typically happening within 24 hours.
Flaws: There’s no way to get a quote prior to applying.
4. State Farm Final Expense Insurance
State Farm Final Expense Insurance is available in 49 of 50 states (sorry, Massachusetts residents) and offers $10,000 in coverage for burial expenses. That amount is right in line with the average funeral costs in most states.
What we like: State Farm offers some of the lowest premiums you’ll find: $28 a month. There is no medical exam required (though there is a short questionnaire), and acceptance is guaranteed.
Flaws: While there’s no guesswork with the payout, there is only one available payout.
5. Mutual of Omaha
Mutual of Omaha burial insurance is available in amounts ranging from $2,500 to $25,000. It’s an easy way for people to get exactly as much or as little coverage as they want or need. Sign up is easy, everyone is guaranteed to be accepted, and premiums are competitive.
What we like: Unlike most other companies that cut off eligibility at 80, Mutual of Omaha accepts people up to 85 years of age. There is no medical exam involved, and benefit levels are guaranteed never to change.
Flaws: As is the case with most such policies, you have limited benefits the first two years.
Assurity is a lesser-known insurance company, but they offer an exceptional burial insurance option that covers up to $50,000 in final expenses. Assurity does not decline people because of pre-existing conditions, and coverage is available up to 80 years of age.
What we like: Assurity burial insurance is available in every state except New York. The range of coverage ($5,000 to $50,000) is impressive. And they won’t turn you down, even if you’re a smoker.
Flaws: Depending on the options you choose, it may be several years before coverage kicks in.
Transamerica offers three different levels of burial insurance and goes the extra mile to explain each option in detail to those who call. It’s the kind of friendly, helpful customer service many seniors will appreciate.
What we like: Each of Transamerica’s burial insurance options offer the ability to borrow against the cash value of the policy, guarantee locked-in premiums, and cover the individual up to 121 years of age.
Flaws: If you are 76 or older they limit your benefit to $25,000.
8. United Home Life
United Home Life burial insurance is available to anyone from 20 to 80 years of age and does not discriminate against people with serious health conditions. Their top-of-the-line $100,000 benefit plan is among the most generous in the industry.
What we like: With a potential payout of $100,000, you can be sure your final expenses will be covered and that there will be something left for your loved ones. The 60-year eligibility window is also among the best in the industry.
Flaws: Not the cheapest policies on the market.
9. AIG with TZ Insurance
AIG has partnered with TZ insurance to offer up to $25,000 to cover final expenses. Acceptance is guaranteed up to age 85, and there is no need to submit to a medical exam or fill out a questionnaire.
What we like: Signing up for this plan is simple and hassle-free. The $25,000 benefit will cover an average funeral and leave plenty for discretionary spending for your loved ones. Payout typically happens in 24 – 48 hours.
Flaws: No payout first two years unless you can prove accidental death. $24 annual fee for administrative costs.
10. Colonial Penn
The last of our best burial insurance options is from Colonial Penn. Colonial Penn was a pioneer in the business of guaranteed acceptance burial insurance for seniors (though the company does not use the term ‘burial insurance’).
What we like: People are eligible up to age 85. There are no medical exams or questionnaires to fill out. Premiums are some of the lowest you’ll find, although they will vary from person to person and location to location.
Flaws: It can be difficult to determine exactly what your benefit will be as they determine payouts on a case-by-case basis.
Who Needs Burial Insurance?
Nothing these days is cheap. That includes the cost of being laid to rest. The funeral home and staff, picking up the body, the casket, embalming, wake, funeral service, hearse, graveside service, burial plot, grave liner or vault, cremation, mausoleum, headstone, and other things all cost money (1).
Recent industry estimates calculate the cost of an average funeral ranges from $6,000 for a no-frills cremation to more than $17,000 for a traditional burial with viewing, funeral mass, and a graveside service with headstone (2). If a person dies without making arrangements for those costs to be covered, it will fall to family and friends to pick up the financial slack at a time.
Unless the deceased or their family are well off, burial insurance is a smart choice. It ensures that things proceed in an orderly and respectful manner after a loved one’s passing.
How We Ranked
When ranking burial insurance our first consideration was whether or not a policy required a physical. We’re aware that many people who seek burial insurance do so because they are unable to obtain a standard life insurance policy due to health or other considerations. Therefore, it’s important that companies don’t erect unnecessary barriers to this type of coverage.
Because the people seeking burial insurance policies are sometimes considered ‘high risk’ by insurers, these policies often come with a waiting period attached. In most cases, that waiting period is two years. If a policy included a waiting period, we preferred those that offered at least some benefits to loved ones if the policy holder died during that period.
Then we considered whether the benefit was fixed or flexible. A fixed benefit is just that. Should the person die, his or her beneficiaries will receive X amount. No buts. A flexible benefit is one that is determined by the insurance company upon the death of the policy holder. From a purely objective standpoint, fixed seems the better choice simply because grieving families don’t need uncertainty.
Another important consideration is how easy it is to sign up for a given policy. Burial insurance is typically one of the simplest, most straightforward types of insurance. So signing up for a policy should also be a simple, straightforward process. Not an interminable slog through endless pages of legalese. Companies that made signup unnecessarily difficult did not make our list.
A few other considerations also weighed on our rankings, including years of eligibility, the size of monthly premiums, the company’s reputation, and how quickly the benefit was disbursed.
Burial insurance reduces the burden on loved ones. When a member of the family passes away, people need time to grieve, to remember, and to adjust to the new reality. The last thing they want is to think, “Can I afford the kind of send off my loved one deserves?” Burial insurance is an easy way to lift the burden of funeral costs off the shoulders of the people you love, so that everyone involved can move on in a dignified way.
Burial insurance doesn’t leave people waiting. With many types of insurance, getting a payout from the insurance company is like pulling teeth. Only not as much fun. There may be visits from the agent, forms to fill out, offers, counter offers, medical records searches, reams of paperwork, doctor’s statements, and who knows what else. In all, it can take months to receive your benefit (3). With burial insurance, most policies pay off within 24 – 48 hours.
Burial insurance ensures you get the kind of funeral you want. Everyone deserves a respectful sendoff that’s in keeping with their beliefs, tastes, and desires. But not everyone can afford what they have in mind. Burial insurance is the best way to guarantee that your final statement is one that speaks to the kind of person you were and the kind of life you lived. You only get one shot at it. Burial insurance will make sure that it’s a memorable experience for all the right reasons.
Burial insurance allows you to get on with your life. This is a slightly ironic benefit, but a real one nonetheless. Selecting the right burial insurance for your situation will enable you to get on with the important work of fishing, traveling, or writing that Great American Novel. You can move forward confidently into the future, knowing that you and your loved ones are covered for any eventuality.
Burial insurance is affordable. While the cost of healthcare continues to climb, the cost of burial insurance remains affordable. Dollar for dollar it’s one of the most cost-effective ways there are to obtain peace of mind and ensure no one will be left struggling to deal with unexpected funeral expenses.
Burial insurance can be a valuable financial tool. With some burial insurance policies you can borrow against the principal should you find yourself in a tight spot. This gives the policy real-time relevance and makes it as much an investment in your life today as it is a way to ease the burden on loved ones after you’re gone.
Burial insurance is straightforward. The life insurance policy as most of us understand it can be a complicated thing. There are different types of plans, different payout options, estate settlement, clauses, subclauses, exclusions, riders (4), and more. It’s enough to make your head spin. Burial insurance, on the other hand, is blissfully simple. You buy the policy, and when you die, the benefit is paid out to the person you indicated, and that is that.
Burial insurance funds can be used for other things. In some cases, the family of the deceased will be well able to cover the cost of a burial. As such, when the burial insurance payout arrives from the insurance company, it is not needed to cover funeral-related costs. In that case, the beneficiaries can use the money in whatever way they see fit.
Burial insurance payout is the same regardless of burial costs. Why is that a benefit? Because if the deceased has $10,000 in burial insurance, but the total cost of the funeral and burial is $7,000, the family can use the rest for other things. That can be helpful in covering the cost of food during the grieving period. But it can be used to cover any other expense, or rolled over into a savings account for the grandkids.
Burial insurance leaves your legacy untainted. When people die without leaving any provision for taking care of the funeral expenses, things can get testy. At a time when family members should be united in grief and trying to help one another transcend their loss, they can wind up bickering about who is going to pay for what. Fair or not, some will blame the deceased for creating such an uncomfortable situation.
Burial insurance isn’t just for the very old. Every year, hundreds of thousands of Americans between 50 and 65 die of various causes. Many of them still have college-age children and are the active breadwinner for their family. It is important that these people are covered in case the unthinkable happens. Burial insurance can make a big difference for loved ones rocked by the premature departure of a spouse or parent.
Burial insurance is more flexible than a funeral bond. A funeral bond is a fairly strict form of burial insurance. The bond is considered a type of investment intended for one purpose and one purpose only: to pay for the funeral and burial. Burial insurance plans are more flexible. With most, the insurance company will disperse the funds to the beneficiary with no ironclad instructions as to how the money should be spent.
Burial insurance dovetails with all belief systems. Each faith has its own traditions and procedures that need to be respected. At the same time, agnostics and atheists also have an absolute right to have the kind of service they want and to be laid to rest in a manner of their choosing. Burial insurance makes no value judgments regarding religious beliefs or a lack thereof.
Burial insurance is the responsible thing to do. Nobody wants to spend part of their one and only life planning for its end. But endings happen. Just like illness happens and injuries happen, and layoffs happen. Most people have no problem planning for those possibilities because it’s the responsible thing to do. And it’s the same with planning for burial expenses. Avoiding the subject will not make it go away. All it will do is shift the financial burden to someone else.
Q: What is ‘burial insurance’?
A: Burial insurance goes by several names. Some refer to it as ‘funeral insurance’ and others as ‘final expense insurance’. But no matter what you call it, this type of insurance is designed to cover the cost of laying someone to rest in a dignified manner. In some cases, companies offer burial insurance as part of a term life insurance plan (5). Meaning it’s possible the insured could outlive the coverage. But in most cases, burial insurance is offered as a whole life insurance product (6).
Q: Why should I bother with burial insurance?
A: Because you don’t want your passing to be a source of consternation for your loved ones. Dealing with the passing of a grandparent, parent, sibling, or child is tough enough on loved ones, without the added burden of trying to figure out who is going to pay for what when it comes to funeral costs. Burial insurance enables you to make sure your passing is a dignified occasion, not a chaotic source of bad feelings.
Q: How much burial insurance should I get?
A: How much burial insurance you get will depend on the specific costs you want the policy to account for. Funeral/burial costs these days can range from a few thousand dollars to $15,000 or more. So you need to decide what type of service you want before sitting down to talk with an agent or buying a policy online. If you don’t, you could wind up with significantly more or less coverage than you need.
Q: Is burial insurance the same as funeral insurance?
A: It depends on which company you are talking to. Some companies use the terms interchangeably. While others only use the term ‘funeral insurance’ to refer to policies purchased directly from a funeral home to cover specific, pre-determined products and services. In that case, the payout goes directly to the funeral home. That is different than standard burial insurance, where the payout goes to a beneficiary designated by the policy holder to be used as the beneficiary sees fit.
Q: Can I be turned down for burial insurance?
A: Because the payout for the insurance company is relatively small on a basic burial insurance policy, a lot of companies offer guaranteed acceptance. Some companies offer more involved policies with larger payouts that may include a cash payment to relatives on top of paying for the funeral and related expenses. For these more deluxe policies, you may be turned down for medical reasons.
Q: Is guaranteed acceptance really guaranteed?
A: For the most part, yes. Guaranteed acceptance means guaranteed acceptance. Keep in mind, however, that these policies are designed to cover people who might not otherwise qualify for life insurance. So premiums on a guaranteed acceptance policy will generally be higher than on other policies. Also, these policies typically include a two-year period at the outset where benefits are limited. And some guaranteed acceptance policies do not let the policy holder borrow against the cash value.
Q: How much does burial insurance cost?
A: The cost of burial insurance will vary significantly from person to person. Factors influencing the cost include the person’s age, sex, and health, and, of course, the amount of coverage the person wants. A basic burial insurance policy can cost as little as a few dollars a month. If, however, a person is planning a deluxe funeral and wants all potential costs to be covered, the monthly premium may be quite steep.
Q: Can my policy be cancelled?
A: A burial insurance policy cannot be canceled unless the policy holder neglects to pay the monthly premium or if it is discovered the policy holder misrepresented his or herself on the application. There may be instances where a person outlives the maturity date of the policy. Say, if the policy covers a person up to the age of 100 and they live longer than that. In such a case, the insurance company will likely pay out the full death benefit to the policy holder.
Q: What is covered by burial insurance?
A: The beneficiaries of the policy are free to spend the funds as they see fit. So, they can spend it to cover the cost of a traditional burial. They can use it to cover cremation and interment costs. Or they can distribute the money amongst members of the family if they so choose. Some families use the money to pay lingering medical bills related to the deceased. Others simply put the money in the bank. If you want any insurance money to cover specific funeral costs, you may want a ‘Preneed’ policy, which we’ll get into shortly.
Q: Can I borrow against this type of insurance policy?
A: In many cases, yes. Policy holders will be able to borrow against the cash value of their burial insurance. Keep in mind, however, that the actual value of such a policy is going to be relatively low, and that the insurance company will charge interest on the money that is borrowed. Also, if the borrowed amount is not repaid by the time the policy holder dies, any unpaid amount will be deducted from the payout amount. As a result, many people decide against this type of borrowing.
Q: Will burial insurance cover the cost of cremation?
A: For centuries, burial was by far the most popular means of laying someone to rest in the US. Over the past half-century, however, that has slowly changed. So much so that in 2015, for the first time ever, more Americans chose cremation over burial (7). There are many reasons for this, with cost being one of the biggest. As far as insurance covering the cost of cremation: remember, beneficiaries are free to spend the burial insurance payout as they see fit.
Q: Are there alternatives to burial insurance?
A: Of course, you can always stipulate in your will that X amount of your liquid assets are to be earmarked to pay your funeral and burial costs. Or you can set up a savings account that is to be used to cover these costs. Another option is to pre-pay for your funeral (8). Many funeral homes allow people to plan their funeral well in advance and pay all of the costs up front. Others let you pay in monthly installments.
Q: What is ‘preneed’ insurance?
A: A Preneed insurance policy is a contract entered into between a person and a specific funeral home. The Preneed insurance policy lists precisely what services and/or products the person will receive from the funeral home upon his or her death. The Preneed contract is paid in advance and remains in force for the duration of the person’s life. With Preneed insurance, there is no payout to loved ones. All funds go directly to the funeral home.
Q: Why is there a two-year period of limited benefits?
A: The two-year period helps ensure the company can make a profit on this type of insurance product. The algorithms used to determine profitability for insurance policies can be extremely complex. So we won’t try and explain them here. Suffice to say that if a company did not require a two-year limited-benefits period, they would either not be able to offer the policy, or the premiums would be much higher.
Q: Is burial insurance always used to pay for a burial?
A: There are no records detailing exactly how often people use burial insurance benefits to pay for burial costs. It’s reasonable to assume that many beneficiaries do use the funds for that purpose. But, it’s impossible to say exactly how many do. Beneficiaries are free to use the funds however they wish. Which is one reason burial insurance is as popular as it is. Many people just use it as a kind of fail safe that is there just in case their loved ones need it.
Q: Is ‘whole life’ the same as ‘term’ insurance?
A: No. Term life insurance is good for a pre-ordained period of time, for instance, 5 or 10 years. If the person does not die during that 5 or 10-year term, the policy is voided, and there will be no payout. A whole life policy, on the other hand, is good for the entire lifetime of the person being covered, as long as that person continues to pay the monthly premiums. If you purchase a term life insurance policy with burial coverage and you do not die within the specified term, there will be no payout for burial expenses when you do eventually pass away.
Q: Doesn’t Medicare cover the cost of burials?
A: Unfortunately, Medicare does not cover funeral or burial expenses (9). Medicare’s role is to help pay for a person’s healthcare. Once a person has died, Medicare’s role in their life is complete. In order to cover the cost of being laid to rest, a person will need some type of insurance or a family willing and able to foot the expenses. Burial insurance is one of the most popular ways to solve this problem.
Q: Are there a lot of hidden fees on this type of policy?
A: There are hidden fees on most things, burial insurance included. In some cases, though, those hidden fees are pretty modest. Perhaps a $20 per year fee to cover ‘administrative costs’. With some companies, that will be the only fee. Other companies, however, may charge ‘surrender’ fees (10) or other types of fees that use their own proprietary language. Always, always make sure to read the fine print.
Q: What happens if I can’t afford to make the monthly payments?
A: If you are unable to continue making the monthly payments on your burial insurance, the policy will be terminated. It’s possible the company may pay out some of the value of the policy to you. That’s ‘may’. Although it is highly unlikely any amount you receive will be equal to or greater than what you paid in. You will probably have to shoulder a ‘surrender charge’ as well for canceling the policy early. It’s crucial that you read the fine print before signing on the dotted line.
Q: Do I have to buy burial insurance through an agent?
A: No. Although it’s a good idea to at least talk to an agent so you can have a better understanding of what you’re buying (11). The agent will answer your questions and address any concerns you might have about a burial insurance policy. It’s not uncommon for people to shop online for the best price and then sit down and talk to an agent, armed with that price. This provides them a bit of leverage in their discussion with the agent. But just to be clear, if you want to handle the entire process yourself online, many insurance companies make it easy for you to do just that.
Q: Can anyone buy burial insurance?
A: With a few exceptions, burial insurance policies are only available to people who are over 50 but less than 80. A few companies will allow people up to 85 to purchase burial insurance. But they are the exception, not the rule. These rules are put in place to protect both insurance companies and customers from unnecessary long-term risks.
Burial insurance is designed to ensure that final expenses do not become a burden for family members already grieving the loss of a loved one.
Acceptance for burial insurance is often guaranteed, and as such, does not require a person to submit to a physical examination.
Use the above guide to determine which company offers a burial insurance policy that best dovetails with your specific needs.
For cpoe.org’s #1 recommended burial insurance, click here.