Burial and Funeral Insurance
Burial insurance and funeral insurance are everyday names for a final expense policy. This guide shows how a policy can fit the arrangements you have in mind.
Burial insurance, funeral insurance, final expense insurance
These three names describe the same product: a small whole life insurance policy. “Burial insurance” and “funeral insurance” simply describe what most people intend the money for. The policy itself does not pay the funeral home. It pays your beneficiary, who then pays for the arrangements.
What funerals cost
According to the National Funeral Directors Association, the national median cost of a funeral with viewing and burial was $8,300 in 2023, and $6,280 for a funeral with viewing and cremation. Those figures do not include a cemetery plot, a monument or marker, flowers or an obituary. See the NFDA statistics.
Costs vary a great deal by region and by the choices a family makes, so it is worth asking local funeral homes for their prices. Under the Federal Trade Commission’s Funeral Rule, a funeral home must give you an itemized General Price List when you ask in person, and prices by phone.
Insurance policy or pre-need plan?
| Final expense (burial) insurance | Pre-need funeral plan | |
|---|---|---|
| Bought from | An insurance agent or company | A funeral home |
| Pays | Cash to your beneficiary | For the specific services in the contract |
| Flexibility | Money can be used for any funeral home or any other need | Tied to the arrangements and usually the provider chosen |
| If you move | The policy goes with you | Depends on the contract. Ask about transfers and refunds |
Neither is right for everyone. Some families use both: a pre-need plan for the service and a small policy for the costs around it.
Other help your family may be able to claim
- Social Security. A one-time payment of $255 may be paid to an eligible surviving spouse or child. Social Security survivor benefits.
- Veterans benefits. Eligible veterans may qualify for burial in a national cemetery, a headstone or marker and burial allowances. VA burials and memorials.
- Existing life insurance. Check old employer and union policies. A policy you already have counts toward your plan.
Choosing a coverage amount
Start with the kind of service you want, ask for local prices, then add any bills you expect to leave: medical costs, a credit card, the last utility bills. Subtract savings or policies already set aside for this purpose. What is left is a sensible amount to insure.
A step-by-step way to work out your coverage amount
Questions about burial insurance
Does burial insurance pay the funeral home directly?
Not by default. The benefit is paid to your beneficiary. A beneficiary can sign a form assigning part of the benefit to a funeral home, which some funeral homes accept in place of payment up front.
How quickly is a claim paid?
It varies by insurance company and by how complete the claim is. The insurer needs a claim form and a certified death certificate. Claims made in the first two years of a policy can take longer because insurers may review the application.
Does a policy cover cremation?
Yes. The benefit is cash, so it can be used for cremation, burial, a memorial service or other costs.