Burial Insurance vs. Life Insurance: Understanding Whole Life Insurance Plans

Written by Kim Wilhelm

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Last Updated 14 Apr 2024

When considering long-term financial planning, people often come across two common types of insurance policies: burial insurance and life insurance. 

Whole life insurance, a popular form of life insurance, is designed to provide comprehensive financial protection and peace of mind to policyholders and their beneficiaries. 

In this article, we take a deeper look into the details of whole life insurance plans and provide a comparative analysis of burial insurance vs. life insurance so that you can make an informed decision for your family's financial future. 


Whole Life Insurance: An Overview

Whole life insurance is a type of permanent life insurance policy that guarantees coverage for the insured's entire life, as long as the required premiums are paid. 

Unlike term life insurance, which covers an individual for a specified period of time, whole life insurance has no expiration date. 

This type of policy combines a death benefit with a cash value component, which grows over time and can be accessed by the policyholder for various financial needs.

Key Features of Whole Life Insurance

Lifetime Coverage 

Whole life insurance policies provide lifelong coverage, ensuring that your beneficiaries receive a death benefit, regardless of when you pass away. This contrasts with term life insurance, which only pays out if the policyholder dies within the specified period of time (such as a term policy that expires at age 80).

Guaranteed Death Benefit

The death benefit in a whole life insurance policy is guaranteed, meaning the amount paid to beneficiaries remains the same throughout the policy's lifetime, as long as premiums are paid. This feature provides financial security to your loved ones in the event of your death.

Cash Value Accumulation

A portion of your whole life insurance premiums goes towards building the policy's cash value. This cash value grows on a tax-deferred basis, allowing you to potentially access a substantial amount of money over time.

Fixed Premiums

Whole life insurance policies have fixed premiums, which means you pay the same amount for the entire duration of the policy. This predictability makes budgeting for the policy easier and eliminates the worry of increasing premiums as you age.

Policy Loans

Policyholders can borrow against their policy's cash value, providing a source of funds for various financial needs. However, it's essential to note that outstanding loans will reduce the death benefit and cash value of the policy.

Burial Insurance: A Closer Look

Burial insurance, also known as funeral insurance or final expense insurance, is a type of whole life insurance policy designed to cover end-of-life expenses such as funeral costs, burial fees, and any outstanding debts. These policies typically have lower face values compared to other life insurance policies, ranging from $2,000 to $25,000.

Key Features of Burial Insurance

Simplified Underwriting

Burial insurance policies often have a simplified underwriting process, making it easier for individuals, especially seniors, to obtain coverage. This process does not require a medical exam and only involves answering a few health-related questions.

Guaranteed Acceptance

Some burial insurance policies offer guaranteed acceptance, which means that applicants cannot be denied coverage based on their health or age.

However, these policies may have a graded death benefit, meaning the full death benefit is not available until a specified number of years have passed (usually 2 years).

Affordable Premiums

Due to the lower face values, burial insurance policies generally have more affordable premiums compared to other life insurance policies. This can be an attractive feature for those on a tight budget or with limited financial resources.

Fixed Premiums and Death Benefit

Burial insurance policies have fixed premiums and a guaranteed death benefit. This provides stability, predictability and financial peace of mind for policyholders.

Burial Insurance vs. Traditional Life Insurance: A Comparison

Now that we have explored the key features of burial insurance, it’s time to compare burial insurance and traditional life insurance.


The main difference is the purpose and coverage amount. Burial insurance, also known as final expense insurance or funeral insurance, is specifically designed to cover the costs associated with a funeral, burial, or cremation, typically ranging from $2,000 to $25,000. It is meant to provide funds to cover funeral expenses and other end-of-life costs. 

In contrast, traditional life insurance is typically intended to provide broader coverage for various financial needs, such as income replacement, mortgage payments, education expenses, and long-term financial protection. 

Coverage Amount

Traditional life insurance policies typically have higher face values than burial insurance policies. 

While burial insurance policies may range from $2,000 to $25,000, Traditional life insurance can provide a much larger death benefit, sometimes reaching into the millions of dollars.

Underwriting Process

Burial insurance has a simplified underwriting process, with some policies even offering guaranteed acceptance. 

This feature makes it easier for older individuals or those with health issues to obtain coverage. 

Traditional life insurance, on the other hand, generally requires a more extensive underwriting process, including a medical exam and a review of the applicant's medical records.

It is important to note that the majority of seniors will not qualify for traditional life insurance policies due to their age and health status.

Premium Costs

Due to the lower face value and more limited coverage, burial insurance policies typically have more affordable premiums than traditional life insurance policies. 

Peace of Mind

Whole life policies, such as burial insurance, offer peace of mind that the funds will be there when your family needs them the most. Unlike term insurance, which expires at the end of a designated period of time.

Whole life insurance offers fixed premiums and guarantees that will be in place as long as the premiums are paid.

Unlike term insurance, where 98% of all policies expire before the death of the insured.

A burial insurance whole-life plan is true to its’ name: that it will protect the insured for their whole life.

Choosing the Right Insurance Policy for Your Needs

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Deciding between burial insurance and traditional life insurance ultimately depends on your financial goals and individual circumstances. 

To determine which policy is best suited for your needs, consider the following factors:

Coverage Needs

Assess your financial situation and determine the coverage you require. If you only need to cover funeral expenses, burial insurance may be sufficient. However, if you have dependents or wish to leave a more substantial legacy, traditional life insurance may be a better option.


Consider your budget when choosing between burial insurance and traditional life insurance.

If you have limited financial resources or prefer lower premiums, burial insurance may be a more suitable choice. Alternatively, if you can afford higher premiums and desire the additional benefits provided by traditional life insurance, it may be a better investment.

Age and Health

Your age and health status can significantly impact your ability to obtain life insurance coverage. If you are older or have pre-existing health conditions, burial insurance may be more accessible and affordable than traditional life insurance.

Financial Flexibility

If you want a policy with a cash value component that can be accessed during your lifetime for various financial needs, burial insurance is the better choice. Traditional life insurance, on the other hand, is more focused on providing a death benefit to cover end-of-life expenses.

Long-term Planning

Consider your long-term financial planning goals. Traditional life insurance can be a valuable asset in your families’ financial planning, i.e. mortgage protection, education expenses, replacement of lost income, wealth transfer, and creating a financial safety net for your loved ones. However, If your primary concern is covering funeral expenses and final debts, burial insurance may be a more suitable and affordable option.

Final Words

Understanding the differences between burial insurance and traditional life insurance is crucial for making informed decisions about your family's financial future. 

Traditional life insurance offers comprehensive financial protection as mentioned above, while burial insurance primarily focuses on covering end-of-life expenses. 

By assessing your coverage needs, budget, age, health, financial flexibility, and long-term planning goals, you can choose the insurance policy that best aligns with your individual circumstances and provides peace of mind for both you and your loved ones.

Remember that consulting with a professional independent insurance agent can be helpful in understanding the nuances of each policy type and determining which option is the best fit for your unique needs. 

By taking the time to research and consider burial insurance vs. traditional life insurance, you can make an informed decision that ensures your family's financial security and provides a lasting legacy for future generations.

If you need help making a decision, our team can help you! Give us a call or contact us today


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