What is Burial Insurance?

Burial insurance is a solution to insure your loved ones aren’t burdened with your funeral costs.  It most commonly comes in the form of life insurance, but can also be purchased through a pre-need funeral plan sold by a licensed pre-need specialist.

How much burial insurance do you need?  First, let’s make sure you understand the basics.

There are three main types of burial insurance you can qualify for based on a short health history assessment:

Level Benefit Burial Insurance

This is the type of coverage that will pay the full amount of the life insurance benefit starting immediately upon approval.

For example, if you purchase a level benefit burial insurance plan, based on the average cost of $12,000 for a funeral ($12,000), your family will receive the death benefit of $12,000 when you pass away.

Level benefit burial plans are the lowest cost and are available through many burial insurance companies. It’s important to always shop the various plans to make sure you’re getting the best burial plan company.

How much burial insurance is needed for a $12,000 funeral?  If you have a level benefit policy, you’ll need $12,000 in burial insurance.

Unfortunately, not everyone qualifies for level benefit burial plans, so there are other options to be considered.

Graded Benefit Burial Insurance

Graded burial insurance is used when certain pre-existing health conditions exist and are discovered during the health history assessment.  “Graded” means these plans do not pay the full death benefit amount immediately upon approve

For example, if you purchased a $10,000 burial insurance policy that has a graded benefit, your family’s payout would have a structured payout over two-year period as follows:

  • If you pass away in Year 1 = 30% of the $10,000, or $3,000, would be paid to your beneficiary.
  • If you pass away in Year 2 = 70% of the $10,000, or $7,000, would be paid to your beneficiary.
  • Year 3 = 100% of the $10,000 payout is paid to your beneficiary.

How much burial insurance is needed if you have a $10,000 funeral and qualify for a graded policy?  Using the same math above, you would need a $33,000 ($33,333 x 30% = $10,000) policy to pay out the full cost of the funeral if you passed away within the first year of owning a graded burial insurance policy.

Or, you purchase the graded policy knowing that, unless it’s an accident, you’re not likely to pass away until well after the 3rd policy year.

Different companies have different payout schedules, so it’s important to fully understand before making any purchase decisions.

Modified Benefit Burial Insurance

Modified burial insurance plans are nearly identical to graded plans, except the payout schedule.  These plans are still used when you have a pre-existing condition, but the condition poses a higher risk, which results in a reduced payout schedule as follows (using a $10,000 policy as the example):

  • Year 1 = Return of your premiums paid to date + 10% interest
  • Year 2 = Return of your premiums paid to date + 12% interest
  • Year 3 = 100% of the $10,000 payout

The important thing to remember about modified burial insurance plans is that it is worth shopping other insurance companies because you might be able to qualify for a graded plan, which would increase the payout to your family and lower your costs

Guaranteed Issue Burial Insurance

The last type of burial insurance is called guaranteed issue.  This means there are no health questions whatsoever and everyone who applies is approved.

Guaranteed issue burial insurance is designed for those with pre-existing conditions that deem them uninsurable for any other type of burial policy.  These are the types of plans you commonly see sold through the mail.  It’s unfortunate that many healthy people are buying these types of plans and putting their family at risk should they pass away in the first 3 years.

Guaranteed Issue Payout Schedule:

  • Year 1 = Return of your premiums paid to date + 5% interest
  • Year 2 = Return of your premiums paid to date + 7% interest
  • Year 3 = Return of your premiums paid to date + 10% interest
  • Year 4 = 100% of the $10,000 payout.

How much burial insurance do you need if you have a guaranteed issue policy?  In this instance, you shouldn’t try to purchase a larger policy due to the tiered payouts being so low.

This is very important: If you do not have any pre-existing health conditions and your agent isn’t asking health questions during your meeting, you need to speak up so you don’t over pay for your burial insurance. This is why it is so important to shop your options.

Top Burial Insurance Plans

Burial insurance is somewhat of commodity, especially when you consider the total number of burial insurance companies that exist.  Below is a list of some of the top burial insurance companies:

AARP Life Insurance Company American Home Life Insurance Company American Continental Burial Insurance Assurity Life Insurance Company
Baltimore Life Insurance Company Equitable Life Insurance Foresters Gerber Life Insurance Company
Gleaner Life Insurance Company Mutual of Omaha Living Promise Final Expense New York Life Insurance Company Prosperity Life

Final Expense

Royal Neighbors of America Sentinel Security Final Expense Insurance Settlers Life Insurance Company Security National Final Expense Insurance
S. USA Life Insurance Company Transamerica Life Insurance United Home Life Vantis Life Insurance Company

How Much Burial Insurance Do I Need?

Great question.

Everyone has different needs for burial insurance based on their final wishes.  Below are some questions you should ask yourself to help determine how much burial insurance you need.

  1. Do I want to be buried or cremated?
  2. How far is my funeral home from my house (Transportation fees only cover within a specific radius and then prices drastically increase)?
  3. What type of headstone should I choose?
  4. How many death certificates will my family need to close my estate?
  5. What types of services do I want the funeral director to provide?
  6. Do I want to be embalmed (not required in all states)?
  7. Should I have a visitation? And, for how long?
  8. What other types of funeral home facilities will my family need to use?
  9. If I’m not using my local funeral home, what will it cost for them to transport me to another funeral home?
  10. What type of casket should I choose?

There are many elements that contribute to the cost of your burial which is why it’s so important to review before making a purchase decision.  Every funeral home is required to have a general price list available upon request.  You can use that as a guide to determine how much burial insurance you need.

How to Get Burial Insurance

Once you have determined how much burial insurance you need, the next step is figuring out how to get burial insurance.

There are three main ways to get burial insurance:

Online Burial Insurance Comparison Tools

Shopping online for burial insurance is extremely easy as the internet has aggregated the best burial insurance companies for you to review.  There are different types of quote comparison tools, but they all basically work the same way.

Learning how to get burial insurance is simple.

  • Find a burial insurance comparison tool (PolicyZip makes it easy; use ours by clicking here)
  • Enter the required information such as your date of birth, gender, resident state and coverage amount.
  • Choose your health class:
    1. Preferred health class is for those of you who do not have pre-existing conditions or family history of heart disease or cancer that resulted in death prior to age 60.
    2. Standard health class is used if you have moderate health conditions such as being overweight, controlled type II diabetes, or something like depression or anxiety disorder.
    3. Guaranteed issue is a class we mentioned earlier that should be used when pre-existing conditions exist that would otherwise classify you as uninsurable.
  • Review your options based on the information you provided.
  • Complete a trial application.
  • Confirm the options with an independent agent over the phone.

Once you have completed these steps, you can finalize and get instant approval from the burial insurance company directly over the phone.  It’s very simple and easy, and never requires you to leave your home.

Get Burial Insurance Through the Mail

A common way some people get burial insurance is by simply signing up through a letter they receive in the mail.  While this may be a simple way to get your burial policy, we caution you against this method as burial insurance sold through the mail isn’t always the best policy for you and your family.

Mail order burial insurance typically doesn’t require any health questions.  As we discussed earlier, if there are no health questions asked, it means you are getting a guaranteed issue burial policy.  If you are healthy, the last thing you should do is take a guaranteed issue burial policy due to the three-year waiting period.

Remember this important rule of thumb: the more health questions you are willing to answer, the cheaper your burial insurance will be.

Make sure if you’re getting burial insurance through the mail that it’s something that corresponds with your current health condition.  If not, you should be speaking with an independent agent or using an online burial insurance comparison tool.

How much burial insurance can you buy through the mail?  Typically it’s going to be capped at $10,000-$15,000.

Appointment with a Burial Insurance Agent

The last way to get burial insurance is to meet face-to-face with a burial insurance agent.  There are many licensed life insurance agents that are contracted with the state approved burial insurance companies.

They will be able to walk you through your options and help you find the best plan that fits your needs.

How much burial insurance can you buy from an independent agent?  As much as you need assuming you can qualify.

Who Sells Burial Insurance?

Good question.

There are three common types of people who sell burial insurance.

Independent Burial Insurance Agent

Independent means that the agent is not working for a specific burial insurance company, so they can represent many different companies.  This is important for you because, in many cases, burial insurance is a commodity and having an independent agent working for you to find the best and least expensive policy will save you money.

There are many A-rated, financially-stable companies that offer burial insurance and, in most cases, it simply comes down to how much burial insurance costs.

Working with an independent agent will allow you to review the best burial insurance companies and choose the policy that fits your needs best.  Your agent should supply you with a simple price comparison of your best options.

Captive Burial Insurance Agent

Captive means the agent works for one company and can only sell burial insurance offered by that one company, meaning that agent won’t be able to help you compare prices of other plans.  Some people are okay with that, but it’s important you know your options.

We find in most cases where people work with a captive agent is due to pre-existing policies such as home and auto insurance.

Relationships are important, but at the end of the day, you shouldn’t be overpaying for your burial insurance.

How much burial insurance can captive agents sell?  Typically, captive companies only have access to sell up to $25,000 of burial insurance.

Licensed Funeral Director

Licensed funeral directors at your local funeral often sell burial insurance, but their emphasis is more often in selling what are called pre-need plans, which are basically different ways for a customer to pay for their funeral in advance.

The reason for this is that when a funeral home sells a pre-need plan it assumes the customer will hold the funeral at their facility at some point in the future. Having pre-paid business increases the overall value of the funeral home if, for example, it was trying to sell its business to another company. So, for reasons that benefit the funeral home, most of what you will be presented are pre-need plans.

For example, if the average cost of a funeral is $10,000 and the funeral home has sold 1,000 pre-paid funerals, they have a future sales value of $10 million.  Burial life insurance cannot be assigned a value as burial insurance pays your family directly and not the funeral home.

Talking to a funeral director is a great way to get burial insurance, just make sure you are reviewing all of your options.

How Much Does Burial Insurance Cost?

Now that you have a strong understanding of some of the basics, let’s help you understand the burial insurance cost differences.

Burial insurance cost varies from company to company.  Below are some of the reasons burial insurance cost can vary so drastically:

  • Advertising. Some companies spend more money on advertising than others. Think about it, how often do you see TV commercials for burial insurance from the same company?  They are likely to have higher costs than a company that isn’t spending as much.
  • Other lines of business. Burial insurance companies that have other lines of business, such as home and auto or other types of health insurance products, have vastly different financial structures. How those other businesses perform based on external factors such as weather (e.g. hurricanes in Florida) could impact the cost of burial insurance.
  • Internal overhead. Like any business, the cost of overhead impacts the costs of products and services. For example, companies that pay higher agent commissions are likely to have higher premiums than companies that pay lower agent commissions.  Now you can’t access that information, but it’s clearly a reason you should always shop and get the best burial insurance cost.

Other elements that impact burial insurance cost.

  • Age: The younger you are, the cheaper your burial insurance cost.
  • Health: The healthier you are, the cheaper your burial insurance cost.
  • Plan Type: The more health questions a plan requires, the cheaper your burial insurance cost.

As you can see, your burial insurance cost can vary not only by company, but by age, health condition and plan type.

Below is a chart that shows you burial insurance cost by category.  The important thing to remember here is the more health questions you can answer, the cheaper your burial insurance will be.  Level benefit has the most health questions and guaranteed issue has no health questions.

Check out how these burial rates compare:

Sample Burial Life Insurance Quotes: $10,000 for Male
Age Level Benefit Graded Benefit Guaranteed Issue
40 $13.29 / Month $27.55 / Month $46.66 / Month
45 $17.02 / Month $33.51 / Month $53.97 / Month
50 $21.45 / Month $40.20 / Month $49.42 / Month
55 $27.48 / Month $46.00 / Month $54.50 / Month
Sample Burial Life Insurance Quotes: $10,000 for Female
Age Level Benefit Graded Benefit Guaranteed Issue
40 $11.91 / Month $24.75 / Month $37.50 / Month
45 $14.84 / Month $30.16 / Month $43.33 / Month
50 $17.90 / Month $27.81 / Month $33.83 / month
55 $21.97 / Month $40.01 / Month $38.10 / month

Do you think it makes sense to buy burial insurance while you’re still young and healthy?

What about shopping?

Here is a chart that shows you the cost difference between the top burial insurance companies.

Burial Life Insurance Quotes: $10,000 for 55-Year-old Females
Burial Companies Level Benefit Graded Benefit Guaranteed Issue
Company 1 $21.97 $34.54 $37.64
Company 2 $22.02 $35.58 $38.10
Company 3 $23.05 $40.01 $49.68
Company 4 $23.93 $41.37 $52.80
Company 5 $24.24 $45.84 $53.33
Company 6 $25.20 $48.33 $64.80
Company 7 $25.55 $51.66 $80.88
Company 8 $25.62 $55.00 $83.95
Company 9 $26.18 $57.30 $83.95
Company 10 $33.68 $61.00 $83.95

With these wide swing of price, do you think you should be working with an independent agent who can shop the top burial insurance companies?

How to Buy Burial Insurance for Parents

Burial costs cannot only be unexpected, but devastating to a family’s finances.  One of the biggest topics for funeral planning is getting burial insurance for parents.

You may think you are prepared to cover your family in the event of your death, but what about your parents?  Do they have burial insurance?  Are you prepared to pay a lump sum between $8,000 and $20,000 if a tragic accident were to occur?

Getting burial insurance for parents is something all families should consider.  Not only is death guaranteed, but the costs of funerals continue to rise every year.  Burial insurance for parents should be a priority.

What are the steps to get burial insurance for parents?

Step 1:  Find out how much debt they are carrying. This will help you understand the financial exposure you will be left with after their passing.  Debt includes car loans, home loans, credit cards, etc.

Step 2:  Compete a final wishes planner or use an online funeral planner to understand what elements of a burial are important to you.

Step 3:  Add up the debt and the associated costs from your funeral planner to get the total burial insurance amount needed.

Step 4:  Purchase a burial insurance plan through an insurance comparison website, independent agent, or local funeral home.

Step 5:  File your parent’s burial insurance policy in a safe place and review periodically to ensure the insurance amount is sufficient.

This seems like an easy process, but the problem is that if your parents do not currently have burial insurance, there is a high likely hood it’s going to be expensive.  To reduce the costs, consider adjusting the items chosen in your parent’s funeral planner.

Guide to Low Cost Burial Insurance for Elderly Parents

One of the easiest ways to lower the cost of burial insurance for parents is by eliminating higher costs items in their funeral plan.  This can be accomplished using the following steps.

  • Buy burial insurance for parents when they are young. Sure, it’s not a fun topic to discuss but burial insurance is cheaper when you buy it young vs. when your parents are senior citizens.
  • Consider a different headstone. Maybe a bench headstone is too expensive and a simpler design such as flush or lawn-level marker will provide the same level of respect for your parents.  Costs of headstones can vary by the thousands and a simple change can drop the amount of burial insurance needed.
  • Choose a pre-existing family plot. Often times families have plots pre-purchased.  If this is the case, using the plot will reduce your costs.
  • Consider cremation. Cremation is becoming more common as the costs of burials continue to rise.  You can still have a memorable service paired with a cremation that will reduce the burial insurance costs for parents.

Getting burial insurance for parents should be a methodical process.  Below are some tips for buying burial insurance for elderly parents and senior citizens.

Burial Insurance for Seniors

The older you are, the more you will pay for burial insurance.  Why, because there is a higher likelihood you will have some type of pre-existing health condition.  Below is a quick glance at cost of burial insurance for seniors.  These are sample rates, it’s always important to shop the top burial insurance companies.

Burial Insurance for Seniors over 60

Getting burial insurance as a senior citizen starts when you turn 60.  We always advise to buy it while you’re young to lock in the cheap burial insurance rates.

Based on your health, below is a realistic look at what you might be spending each month for your burial insurance policy.  The chart is based on non-smoking males from the ages of 60-69.  Burial insurance for seniors over 60 certainly increases when you compare the level benefit (healthy) to the graded benefit (unhealthy). If you’re healthy now and need burial insurance, this is a good time to lock in a cheap burial insurance policy with a financially strong company.

Senior Life Insurance Plans Over 60: $12,000 for Male Non-Smoker
Age Level Benefit Graded Benefit Guaranteed Issue
60 $47.24 $84.87 $72.96
61 $49.38 $89.86 $75.46
62 $51.36 $94.93 $77.80
63 $54.14 $99.12 $79.92
64 $58.61 $100.00 $82.34
65 $61.05 $103.00 $85.31
66 $64.97 $108.00 $88.43
67 $69.22 $114.00 $91.98
68 $73.29 $119.09 $96.90
69 $77.63 $125.00 $102.48

Burial Insurance for Seniors over 75

Turning 75 is a milestone and certainly impacts the costs of burial insurance for seniors.  If you or your parents are over 75, you’ll want to make sure and shop the top burial insurance companies to get the best rates.

Notice below the burial insurance cost difference from the 75-year-old level to the 75-year-old graded.  It’s nearly 70% more expensive.

One of the ways burial insurance for seniors over 70 can be reduced is by shopping the companies. For example, one company might consider you graded if you are an insulin-dependent diabetic, and the other company might consider you for level.  This is exactly why you need to shop your plans based on your health, not based on some letter you receive in the mail.

Do you want to spend an extra $70 per month on burial insurance when you don’t have to?  We don’t want you to either.

Burial Insurance for Seniors Over 75: $12,000 for Male Non-Smoker
Age Level Benefit Graded Benefit Guaranteed Issue
75 $104.15 $175.00 $146.98
76 $111.17 $184.06 $156.20
77 $118.63 $201.70 $166.67
78 $125.74 $220.70 $178.29
79 $137.04 $239.00 $191.48

Burial Insurance for Seniors over 80

80 is a tough age to get approved for burial insurance, but it’s not impossible.  Fewer companies offer burial insurance for seniors over 80.

As you can see at age 80, the price nearly doubles from level to graded.  This is another example of where shopping the top burial insurance companies will ensure you aren’t over spending.

Senior Life Insurance Plans Over 80: $10,000 for Male Non-Smoker
Age Level Benefit Graded Benefit Guaranteed Issue
80 $121.41 $212.50 $173.14
82 $150.34 $242.53 $203.51
84 $170.08 $263.12 $236.90
86 $217.50 N/A N/A
88 $260.83 N/A N/A

Burial Insurance for Seniors over 90

Getting burial insurance at age 90 is extremely difficult as most insurance companies will not offer coverage.  And, those that do typically cap the coverage amount to $5,000.  Currently, there are no burial insurance companies offering policies to seniors 90 and over.

We have come across companies in the past that will try to write these policies, but they end up leaving the market, so it’s sort of a waiting game.

If you’re lucky and need life insurance over age 90, then you should call and discuss your options with one of our independent agents.

Burial Insurance for Seniors over 90: $10,000 for Male Non-Smoker
Age Level Benefit Graded Benefit Guaranteed Issue
90+ Not Available Not Available Not Available

When planned right, you can keep burial insurance costs down by reviewing the companies and always shopping for a second opinion.

What Does Burial Insurance Cover?

Burial insurance is put in place to fund all the associated costs with a burial.  Those costs that should be considered when choosing a burial plan are as follows.

  • Opening and closing of the burial plot
  • Transportation
  • Facility rental
  • Funeral Director services
  • Flowers
  • Drinks / Meals
  • Memorial cards
  • Head stone or other grave markers
  • Vault
  • Embalming

Burial Insurance: Is it Worth It?

This is a great question, but the answer is different from family to family.

Burial insurance is not designed for you, it’s for those you leave behind.  Ensuring your loved ones can properly say goodbye and respect your final wishes.  However, you don’t necessarily need burial insurance to do that.

So, burial insurance: Is it worth it for you?

Below are some common scenarios we find where burial insurance is worth it:.

  1. You have not pre-planned your funeral
  2. Your savings doesn’t include enough to cover the costs of a funeral.
  3. You do not currently have any life insurance.
  4. You are carrying excessive debt.
  5. You family and friends are not in the financial position to cover the cost of your burial.
  6. You don’t want to be a financial burden on your family when you are gone.

Conclusion

Determining how much burial insurance you need clearly isn’t as cut and dried as it may seem.  You need to take the time to shop the top burial insurance companies and ask your agent a lot of questions.

  • Are the options you’re showing me the top burial insurance companies?
  • Are these cheap burial insurance companies or A rated?
  • I appreciate you showing me affordable burial insurance options, but are these the only plans I qualify for?
  • Am I better off relying on my social security death benefit vs. buying a $5,000 guaranteed issue policy?
  • Does this end-of-life insurance pay out immediately or build cash value?
  • Are you showing me final expense or term life insurance?

Ask as many questions as possible to ensure you are getting the best burial insurance plan for your family.