What Is Burial Insurance and Should I Buy It?

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It’s not always easy to talk about the costs associated with someone passing away. But funerals can be quite costly. According to the National Funeral Directors Association, the median cost of a funeral is around $8,300. Burial insurance is a type of policy you can purchase to cover the costs of a funeral for yourself and/or your loved ones.

Insurance companies pitch burial insurance as the way to ease the financial burdens associated with funerals. But money expert Clark Howard says there’s a better way to pay for a funeral or cremation. What does he suggest instead?

Keep reading for Clark’s recommendation and answers to common questions about burial insurance, including:

What Is Burial Insurance?

Burial insurance — also called funeral insurance or final expense insurance — is a type of whole life insurance policy. Specifically, burial insurance pays for the end-of-life expenses associated with burial or cremation.

When a burial insurance policyholder passes away, the listed beneficiary will receive a “death benefit,” or payout. Typically, the death benefit of a burial insurance policy is between $5,000 to $25,000. But some companies offer as much as $50,000 in coverage.

While the primary purpose of burial insurance is for end-of-life expenses related to burial and cremation, beneficiaries are free to use the money as they see fit. Let’s say, for example, the policyholder leaves behind medical bills or other debts. The beneficiary can choose to use some of the policy’s payout towards the debts. But burial insurance isn’t meant to cover major expenses that may be left behind.

How Does Burial Insurance Work?

Like other types of insurance, burial insurance is an agreement between a policyholder and an insurer. The policyholder pays a set amount (premiums) weekly, monthly or annually. In exchange, the insurer pays the policy beneficiary an agreed upon amount when the terms for compensation are met.

You don’t typically need to complete a medical exam to get burial insurance. But, depending on the insurer and policy type, you might be required to answer some health-related questions. Generally, a burial insurance policy falls within one of the following categories of whole life insurance:

Guaranteed Issue PolicySimplified Issue Policy

• Doesn’t require you to answer medical questions

• Doesn’t require you to complete a medical examination

• Is typically more expensive since applicants aren’t rejected
• Requires you to answer some health-related questions

• Doesn’t require you to complete a medical examination

• Is typically less expensive since some health-info is provided and applicants can be rejected

Another type of burial insurance policy you might hear about is pre-need insurance. This coverage is generally between you and the planned provider of your burial or cremation services. With pre-need insurance, you’ll select all the services and products you need for your funeral beforehand. When the time comes, the policy’s payout goes directly to the service provider instead of any beneficiaries.

What Is a Graded Death Benefit?

Be aware that a burial insurance policy might have a graded death benefit, or include a provision of modified benefits. A graded death benefit impacts how much of a payout your beneficiary will receive, depending on how soon you pass away after purchasing a policy.


If you pass away within a specified time period — typically two or three years — after getting burial insurance, your beneficiary will not receive the full payout. Instead, they’ll receive a lesser amount that likely includes a refund of your paid premiums and/or a percentage of the policy’s coverage limit.

What Does Burial Insurance Cover?

Because it’s called burial insurance, it’s easy to assume that this coverage can only be used for things like a burial plot, burial vault, or casket. But a burial insurance policy can be used to cover many other end-of-life expenses or even to pay debts left behind by the policyholder.

Other examples of expenses you can pay for using burial insurance include:

  • Cremation
  • Floral arrangements
  • Funeral home services
  • Funeral transportation
  • Headstones
  • Medical bills
  • Memorial services
  • Obituaries
  • Outstanding debts (ex: credit card, medical bills, etc.)
  • Urn services

Essentially, it’s up to the beneficiary to decide how to allocate funds from a burial insurance death benefit.

How Much Does Burial Insurance Cost?

How much you pay for any type of insurance will always be impacted by certain risk factors. The type of insurance determines what is considered more or less risky, and in turn, what makes you more or less expensive to insure.

With burial insurance, you pay for the promise that — upon your passing — your insurer will pay for your burial services. Factors like your age, gender and amount of coverage desired will impact how much you pay. The older you are, for example, the more you’ll pay for burial insurance.

Forbes Advisor compared quotes for $10,000 of coverage through guaranteed issue burial insurance policies. Here are the average rates they found for burial insurance:

BuyerAverage Monthly Cost
50-year-old female$34
50-year-old male$47
60-year-old female$49
60-year-old male$63
70-year-old female$73
70-year-old male$97
80-year-old female$158
80-year-old male$197
Source: https://www.forbes.com/advisor/life-insurance/best-burial-insurance/

What Does Clark Howard Think About Burial Insurance?

Burial insurance may offer a sense of peace about not leaving your loved ones with end-of-life expenses once you pass. But Clark doesn’t think these policies are that great in value.

“What you pay for a $10,000 policy effectively is at such an unbelievably high cost versus the value of the policy,” Clark warns. “It’s a policy people buy because of a visceral fear that a loved one will die and they won’t have the money to bury or cremate them. But my attitude is that it’s looking at the whole equation backward.”

So, what can you do instead? Clark recommends joining a non-profit memorial society. It usually costs around $25 to $35 for a lifetime membership. And as a member, you get access to reduced pricing on final arrangements. To find your local society or learn more about options, you can start by visiting The Funeral Consumers Alliance’s website. Clark says:


“If you have a non-profit memorial society near you, you know you’re going to be able to do a cremation for hundreds of dollars and typically a burial for a couple thousand, so to insure for that makes no sense.”

Another helpful resource is Funeralocity. This website lets you, “Compare the prices of all funeral and cremation providers.” All you have to do is type in a zip code, city, or business name to get started. Then, you’ll see information on nearby providers including pricing breakdowns for their service offerings and reviews from past customers. You might even find discounts for services.

“The idea is — instead of feeling like you’re a sitting duck and you have to pay whatever the funeral home tells you — what you do is make the end-of-life arrangements much more affordable, and then you haven’t created this burden you’re trying to insure,” notes Clark.

Final Thoughts

If you’re worried about leaving your loved ones with expenses after you pass, burial insurance can be tempting. But according to Clark, the value of a policy isn’t all that great. In general, Clark doesn’t recommend insuring against narrow events or circumstances.

“Buying burial insurance to me is almost like people who buy those accidental death and dismemberment policies. You’re narrowing the purpose of the insurance way too far,” he says.

Instead, you might want to consider broader coverages like term life insurance or disability insurance. And it’s always a good time to get familiar with money-saving resources for any service you’ll eventually need. In this case, a good place to start is by finding your local non-profit memorial society.