Which Life Insurance Policies Cover Funeral and Cremation Expenses?

Which policy is best for funeral and cremation costs

Written by Kim Wilhelm

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Last Updated 21 May 2024

Many people neglect to consider the expenses their family members would have to cover after they pass away. 

On top of the grief and devastation of losing a loved one, many family members get burdened with the cost of burial and funeral arrangements.

Burial insurance is one of the best ways to remove this financial pressure from family members. 

Burial insurance provides your loved ones with the funds necessary to have a funeral. It covers expenses such as the headstone, casket, burial, and more! 

When it comes to burial insurance, it’s all about proper timing. In this article, we look at when is the best time for you to get burial insurance so you can get make sure your family is protected.

Burial Insurance

Before we discuss when you should get burial insurance, it’s important to understand what burial insurance is.

Simply put, burial insurance is a form of life insurance that is meant to cover the cost of your funeral arrangements and final expenses. 

Some other common uses for burial insurance are paying off debts or even medical bills after you pass away. 

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Who is Burial Insurance Best for

You can get a burial insurance policy at any age, but burial insurance is ideal for seniors because it allows them to help their family cover their funeral expenses without the worry of being denied coverage for medical conditions or overpaying for benefits they don’t need.

When should you get Burial Insurance? 

The ideal age for getting burial insurance is between 50 to 85. However, with burial insurance, it’s all about timing. 

Burial insurance rates are locked in meaning once you get approved, your premiums will not increase (if you keep up with the monthly premiums). 

As you get older, if you don’t haven’t secured coverage yet, the rates for burial insurance increase. 

This is why we recommend applying for burial insurance as early as possible to avoid paying a higher premium. The younger you are, the better rates you can receive.

Types of Burial Insurance

Now that we know when the best time to get a burial insurance policy is, it’s important to understand what types of burial insurance policies you qualify for. 

In general, there are three types of burial insurance policies: 

Immediate Benefit Policy

An immediate benefit policy is best for those in reasonably good health. 

With immediate benefit policies, there’s no waiting period and no health exam necessary to be approved. 

This type of policy also has the lowest cost of all final expense policies. 

Graded Benefit Policy

Graded policies are best for people with semi-serious health conditions that do not qualify for immediate benefit. 

Graded policies have some of the same similarities that immediate benefit policies do with a few differences. 

First, graded policies have a two-three year waiting periods (depending on the insurance company) before the full death benefit can be received. 

The exception to the above is for death due to accident. If death due to accident occurs during the waiting period, then the full death benefits will be paid. 

Second, the premiums with a graded policy are typically higher than an immediate benefit policy. 

Guaranteed Issue Policy

Guaranteed issue policies are reserved for people with serious health concerns and in poor health. 

Similar to graded and immediate policies, this insurance policy doesn’t require a medical exam to be approved.

However, because more serious health conditions are accepted, these policies are more expensive than immediate and graded. 

Expenses Covered in Burial Insurance

  • Headstones
  • Cremation
  • Urn services
  • Burial vault
  • Transportation
  • Funeral home services
  • Obituary notices
  • Caskets
  • Burial plot
  • Flowers
  • Opening and closing of the grave

Pros and Cons of Burial Insurance 

Like any other type of insurance, burial insurance comes with its own set of pros and cons. 

Here are a few of the pros and cons of burial insurance: 

The pros and cons of final expense insurance

Pros 

You get to choose your own beneficiary:

With Final Expense Insurance, you get to not only name who gets the funds and fulfills your final wishes, but you can also name a secondary or contingent beneficiary in a situation where you outlive your primary beneficiary.

Your premiums never increase once you’ve locked in your rate: 

With final expense insurance, once you get approved for a rate, your premium is locked in and does not change. 

This is very beneficial for many people because it allows them to set a budget with this insurance in mind. 

Final Expense plans do not expire: 

Final expense insurance plans do not expire. Once you get approved, your plan is locked in and will not expire as long as you pay the premiums. 

Funds can be used for any expense:

Other than funeral costs, the money left to beneficiaries can be used for any expense. This means the beneficiary can cover expenses such as outstanding bills, debts, family needs, and more. 

Final Expense Insurance accumulates cash value:

Over time, a final expense policy will build cash value. In addition, unlike term policies, final expense benefits don’t expire. 

Fast approval:

Most final expense policies have a fast approval process and do not require a medical exam. In addition, plans are made as simple as possible, and claims are paid quickly. 

Option to use the policy as a charitable gift to children or grandchildren:

Oftentimes, parents will opt to leave the money behind to children or grandchildren who depend on them for financial support, or to be used as a legacy of love.

Cons

Funeral costs are on the rise: 

With funeral costs steadily rising, a final expense policy doesn’t “lock-in” today’s prices at a funeral home. 

This is why getting a final expense policy as early as possible is best because it allows the beneficiary to use the funds accumulated towards other expenses that may make end-of-life expenses more expensive. 

You depend on the beneficiary

Make sure you choose your beneficiary wisely because you have to rely on him or her to execute your funeral plans. Make sure they fully understand your final wishes. 

Certain illnesses will cause higher premiums

Final expense insurance is ok with pre-existing conditions but having certain illnesses or medical conditions that you have pre-approval will cause your premiums to be slightly higher. 

However, If you have any newly acquired illnesses after approval, your rate will not be affected.

This is why acting now and getting final expense insurance before your health changes is important. 

Smaller than other life insurance

Because the policies are designed for final expenses, they are typically smaller in death benefit than standard whole-life or term policies.

However, they will do what they are designed to do; soften the financial burden that comes with planning a funeral.

Is it Worth Investing in Burial Insurance?

Whether or not getting burial insurance is the right option for you would depend on the amount of coverage you want, your health, and other factors. 

While burial insurance does not offer a high death benefit amount and can't cover income or mortgage replacement, it can ensure your family doesn't have to worry about arranging money for your burial and funeral expenses. 

Burial insurance is highly beneficial for many reasons, particularly if you are looking for a policy that provides guaranteed coverage, doesn't require a medical examination, and assists your family in arranging the final arrangements in case of your death.

Once you understand what burial insurance is, how it works, and your options, you can make an informed decision at the right time.

It is important to be prepared for anything unexpected and not leave your family under a stressful financial burden while grieving a loss.  

If you want to learn more about whether burial insurance is worth the investment, you can click on an article we wrote here.

How to Apply for Burial Insurance?

  • Immediate Approval Over the Phone Today!
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Most final expense companies require you to meet in person, with Final Expense Direct, you can apply over the phone!

Call now, and a licensed insurance professional will answer any questions you might have, find out which plan-type you qualify for, and provide you rates from all of the top-companies.

If you hear one you like, you can get coverage right over the phone! It’s that simple!

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