The Best Burial Insurance of 2024
What You Should Know:
- In 2021 the median cost of an adult funeral with viewing and burial was $7,848- a 6.6% increase from the cost of a funeral with these same services in 2016.
- Aside from burial insurance, charities, nonprofits, and religious organizations as well as federal, state and local programs can provide qualifying individuals with financial assistance for funerals.
- Seniors can also set aside savings for funeral expenses and still qualify for Medicaid or SSI benefits.
During a time of grief, the last thing you want to do is leave your loved ones behind with the added worry about how to cover the costs of your funeral and other final arrangements. The average cost of a funeral with viewing and burial is about $7,848, and that number rises to $8,000+ depending on which services you choose. These large funeral expenses don’t even include extra costs associated with the cemetery, monument, marker, flowers, and other miscellaneous charges that can quickly add up.
To leave your loved ones with a clear path for covering these hefty expenses, we recommend investing in a specific type of life insurance called burial insurance. Although there are many different life insurance policies to choose from, burial insurance is unique because it provides an immediate payout in the amount your loved ones need to move forward with your final arrangements. Some life insurance policies have strict health requirements you cannot meet, unhelpful coverage expiration, and premiums that rise over time. Burial insurance, on the other hand, has little to no health requirements, no policy expiration, and premiums always remain the same.
Below, we have created a helpful guide packed with practical comparisons and easy-to-understand burial insurance basics. Read on to find definitions for burial insurance terminology, a guide to some of the best companies and policies currently on the market, and answers to the most common burial insurance questions that you have. If you aren’t sure if burial insurance is right for you, check out our resources at the end of this guide to learn about your options and how to choose the best policy.
Burial Insurance Basics: What You Need To Know
Burial insurance is a type of life insurance, and the world of life insurance uses many specialized words. The following quick definitions will be useful to you as you learn about and compare your options.
Burial Insurance by Other Names
Burial insurance is exactly the same as final expenses insurance and funeral insurance. Since it’s typically just a low death benefit form of whole life insurance, it may be called something that has no reference to funerals, yet still be suitable as a form of burial insurance. It’s worth noting that pre-paid funerals are not a form of burial insurance.
Burial Insurance Terminology
The Types of Burial Insurance
Permanent Life
Permanent life, or whole life, is life insurance that you are unlikely to outlive. These policies typically mature when you turn 100 or 121. In the unlikely case that you do live past that, the death benefit should be paid directly to you, the policyholder, though you should verify this with the company.
With the most basic form of permanent life insurance, you need to answer some health questions, which may be referred to as a “simplified underwriting” process. You can be disqualified if you are in bad health, but the strictness of this qualification varies by company. Some permanent life policies require a health exam, but we have not included these policies on our list.
All of the permanent life insurance policies we have included on our list are available to those between ages 50-75, and many are also available to younger or older applicants. However, some permanent life insurance excludes seniors. Many permanent life policies gain cash value over time. Most do not have a waiting period for benefits.
Guaranteed Acceptance
Guaranteed Acceptance, also called Guaranteed Issue, is a type of Permanent Life Insurance typically designed for those ages 50-85. Companies offering this usually claim that anyone in their stated age range will be approved with zero health questions asked. Since “Guaranteed Acceptance” is not a tightly regulated phrase, however, you will find that some companies that use it still ask about your weight, height, or other simple health questions.
Guaranteed Acceptance plans accommodate those who otherwise do not qualify for life insurance. Premiums tend to be higher for Guaranteed Life than for other forms of life insurance, and most of these policies have a 2-year waiting period for full death benefits. Many do not accrue cash value, but some do.
What Is Burial Insurance and Why Is It Important?
Burial insurance is a whole life insurance policy with a death benefit typically ranging from $5,000 to $25,000. This type of insurance policy is designed to relieve stress on your loved ones by covering your funeral and burial costs. Most funeral homes require full payment upfront, and it can take several months for your survivors to receive money set aside in your will. Burial insurance helps fill the gap in this situation by providing funds when they are needed most.
Below, we explore today’s average funeral costs, the pros and cons of burial insurance, and the differences between life insurance and burial insurance.
Average Funeral Costs
According to the National Funeral Directors Association, the average cost of a funeral with a viewing and burial in 2021 was approximately $7,848, and the average cost of a funeral with cremation was about $6,971. These prices are calculated by adding up basic costs such as service fees, embalming and other preparation of the body, a metal casket, use of facilities and staff for the funeral, use of transportation such as a hearse, and printed booklets or materials for the ceremony. However, the prices above do not include extra costs associated with the cemetery, monument, marker, flowers, or other miscellaneous charges that can quickly add up.
In a time marked by grief, no one wants to leave their loved ones behind in a state of shock and worry about how to cover these large expenses. That’s why it’s so important to plan ahead by researching funeral homes in your area to get an idea of cost and setting up your burial insurance accordingly. Since funeral homes vary in pricing and services offered, we suggest focusing your research on companies with licensed funeral directors and a reputation of honoring each family’s budget.
Pros and Cons of Burial Insurance
With all investments, there are positives and negatives to weigh before deciding if it is the right choice for you. Burial insurance is no exception, and we suggest taking your time to review the general pros and cons before moving forward in researching specific policies.
Pros:
- Quick coverage due to no health exam requirement
- Open to people of all health levels since little to no health questions are asked in application
- High eligibility age (sometimes up to 85 years old)
- Some policies accumulate cash value that can be used when unexpected expenses arise
Cons:
- No opportunities for good health rewards, like lower premiums or discounts
- Some policies have a waiting period that restricts the death benefit payout in the first two years after a policy begins
- Additional yearly fees added onto some policies
Burial Insurance vs. Life Insurance
With so many different options available, you might wonder about the difference between burial insurance and life insurance. Although both types benefit your beneficiaries when you die, they vary in many fundamental ways.
Life insurance encompasses a large category of policies designed to cover a wide range of needs upon your death, including income replacement, debt settlements, estate planning and medical expenses. There are many different types of life insurance to choose from, like Term Life, Whole Life and Universal Life insurance.
Burial insurance actually falls underneath the larger umbrella of life insurance, but it offers a much lower death benefit amount than traditional life insurance policies. This is due to the specific nature of burial policies, which only cover final arrangements for the deceased.
Below, we highlight the main differences between burial insurance and life insurance to help you better understand their purposes.
The Best Burial Insurance Plans of 2024
How We Chose the Best Burial Insurance Companies
High Maturity
Some life insurance policies, especially term life, mature (that is, end) while you are still living, based on your age or another measure of time. We have taken care to include only policies with a maturity age of 100 or greater that you are unlikely to outlive. In the unlikely event that you live past the high maturity age, most of these policies will directly pay you the death benefit.
Easy Qualification
You shouldn’t be disqualified from receiving burial insurance due to minor complaints associated with age. That’s why all of the policies on our list required no or very few health questions. We excluded policies that require medical exams. Policies that include a few health questions usually have lower premiums and higher benefits than guaranteed acceptance plans that ask no questions, but you can choose the option that suits your current health.
Locked-In Premiums
As you age, your cost of living may rise due to your increasing need for assistance and healthcare. To help you keep costs low, we have verified that all of the policies on our list feature locked-in rates that will never increase unless you let the policy lapse or you decide to increase your death benefit amount. These policies will also never be canceled on you by the company unless you cease payments or unless you were untruthful on the application.
Burial Insurance Products Overview
AIG with TZ Insurance
Most Insurance Experience
AIG boasts over 100 years in business, beating out all other companies on our list when it comes to industry experience. This brand has weathered many crises in the American economy and come out of them stronger, focusing on customer satisfaction and financial integrity. With over 90 million worldwide customers, AIG has the expertise and efficiency that comes with handling a constant stream of insurance claims. AIG partners with TZ Insurance to bring you this burial insurance plan.
This Guaranteed Issue policy covers those ages 50 to 85 for up to $25,000 of life insurance that can be used by family members to cover funeral and burial costs. With a sum of this size, for many families there’s also room for extra expenses such as paying small credit card or medical bills.
AIG with TZ Insurance Product Overview
In partnership with TZ insurance, AIG offers several forms of life insurance, but its Guaranteed Issue policy is most suited to seniors who want to cover their own final expenses.
Pros and Cons of AIG’s Guaranteed Issue Policy
Pros:
- No health questions or exam on the application
- Allows applicants up to age 80
Cons:
- Restricts the payout of the death benefit in the first two years after a policy begins, except in cases that meet the strict definition of accidental death.
- Prices are not listed online
Colonial Penn
Best for Budget-Conscious Seniors
Colonial Penn has specialized in life insurance for seniors for over 60 years and was the first brand to offer a Guaranteed Acceptance insurance policy specifically for those over age 50. Both the Guaranteed Acceptance Policy and the Permanent Whole Life Policy from this company are suitable for covering your final expenses, although the company does not refer to either policy as burial insurance.
Colonial Penn gives one free month of coverage per year to those who pay annually for their policy, which can make the overall yearly cost much more affordable. This generous discount makes Colonial Penn a great choice for budget-conscious seniors. To explore exact premium prices and death benefit amounts online or over the phone, you will need to supply personal information such as full name, age, location, and more.
Colonial Penn Product Overview
Both the Guaranteed Acceptance and the Permanent Whole Life policies from Colonial Penn have no physical exam and are available to seniors in 49 states. Both give you the flexibility of paying your premiums monthly, quarterly, semi-annually, or annually, and those who pay annually get one free month of coverage each year. These policies have high maturity ages of 121 years, and their premiums will not change at any point for the duration of the policy. Read on to find out the important ways in which these policies differ.
Pros and Cons of Colonial Penn’s Guaranteed Acceptance Policy
The Guaranteed Acceptance plan from Colonial Penn is the company’s easiest to qualify for. We’ve explained its pros and cons below.
Pros:
- No health questions or exams required for approval
- Applicants are eligible up until age 85
Cons:
- Death benefits are determined on a case-by-case basis and may be low
- Two year waiting period for benefit payout
Pros and Cons of Colonial Penn’s Permanent Whole Life Policy
Permanent Whole Life from Colonial Penn has some limitations on acceptance, but it has a few advantages over the Guaranteed Acceptance policy.
Pros:
- Available to those aged 45-75, making it perfect for getting coverage for yourself and perhaps a slightly younger spouse.
- Accumulates cash value that you can borrow against (with interest)
- No waiting period so coverage is effective immediately provided your premium is paid
- Death benefits are available in increments of $10,000, up to the unusually high level of $50,000.
Cons:
- To qualify, you must answer questions about your health, and you may be disqualified based on your answers.
- You cannot apply if you’re over 75
Fidelity Life
Best for High-Cost Funerals
Fidelity Life was founded in 1896 and provides burial insurance in all states except Wyoming and New York. With over $32 billion in life insurance policies currently in force, FidelityLife is trusted by many middle class Americans to provide financial support to their families during crucial times. This brand received an A- (Excellent) Financial Strength Rating (FSR) from A.M. Best, the most widely recognized provider of insurance industry ratings.
The company’s RAPIDecision Final Expense plan features death benefits ranging from $5,000-$35,000, though many competitors offer only up to $25,000. If you discover during your research that you want funeral items and services that will cost you beyond the average final expense, this high benefit option could be perfect for you. You may also consider it if you’d like some of the death benefit to be left over for things like final medical bills or even the personal needs of the beneficiary.
A RAPIDecision Final Expense policy has many advantages for the consumer, including a high maturity age and death benefits ranging from $5,000-$35,000 dollars. Read on to discover more pros and cons of this form of burial insurance.
Pros:
- Once you’re approved, your coverage starts with no waiting period and the premium is guaranteed to never increase or be canceled (as long as you pay your premiums)
- Allows applicants up to age 85
- Has an Accelerated Death Benefit Rider that allows you to access 50% of the cash value of your policy for any personal needs
Cons:
- Using the Accelerated Benefits Rider is like taking out a personal loan at the bank. If you have not paid it in full before your death, the balance will be deducted from the death benefit, leaving less for your beneficiary.
- The company cautions that this policy covers individuals with some health impairments but is not designed for those with very serious health risks.
Gerber Life
Quickest Application
Gerber Life has provided life insurance to American families since 1967, and it currently has about 6.3 million customers in the United States, Canada, and Puerto Rico. Well-known for its longevity and financial stability, Gerber Life received an A rating from expert insurance industry evaluators, A.M. Best. Despite its heavy association with children thanks to its logo and its unique insurance policies for children, Gerber Life Insurance offers insurance to customers from a wide age range.
Keeping up with changing times, Gerber Life now offers convenient online insurance applications that take just minutes to complete. Even those who rarely use computers will find the application process simple and stress-free. Gerbers Life’s Guaranteed Life policy can be a convenient and sensible way to provide for your final expenses.
Gerber Life Product Overview
Gerber Life offers its Guaranteed Life policy in all fifty states to those ages 50-80. Below you can see a quick overview of its advantages, as well as some drawbacks, so that you can determine if this is the right policy for you.
Pros:
- Customizable death benefit amounts ranging from $5,000 to $25,000
- If you ever unexpectedly need an extra source of funds, you can choose to surrender your policy for its cash value, or you can keep it open and borrow against the cash value at 8 percent interest.
- With coverage in all 50 states, you won’t be disqualified based on your location.
Cons:
- You will need to answer some basic health questions on the application and you may be denied for the policy based on your answers, so this is not a true “guaranteed acceptance” plan.
- Using the cash value incurs 8 percent interest and puts the death benefit at risk. If you use this optional loan and don’t pay it back before your death, it will be deducted from the death benefit.
The AARP Life Insurance Program from New York Life
Best for Paid-Up Premiums
AARP has served American seniors 55 and older since 1958. It’s an organization born from the idea that aging is challenging, but it’s also a privilege. AARP has a long history of fighting to make aging a more positive experience by lobbying for senior-friendly legislation and by publishing helpful articles for seniors.
AARP frequently partners with other businesses to bring specific services to its members. One such partnership is with New York Life, a company that’s been offering insurance for over 170 years. New York Life maintains its ability to meet consumer needs in part because it isn’t beholden to meet aggressive shareholder expectations. New York Life has a A++ rating for financial stability from the insurance rating agency, A.M. Best.
The AARP Life Insurance Program from New York Life has a unique feature called “paid-up premiums” on both of its life insurance policies. Paid-up premiums means that once the policyholder reaches age 95, he or she no longer pays premiums but still receives full coverage. If you expect a longer than average lifetime, this generous policy could lower your costs while offering peace of mind as you reach what could be your most expensive years for healthcare and other needs.
The AARP Life Insurance Program from New York Life Product Overview
New York Life partners with AARP to provide two different burial insurance coverage options for those who are already AARP members. The Guaranteed Acceptance policy best serves those with pre-existing health problems, while the Permanent Life policy suits those who can answer some basic health questions and still be approved.
When buying life insurance from the AARP Life Insurance Program from New York Life, you have the power to choose which policy meets your needs best. Before exploring the differences, you should know that many facets of these two whole life policies are identical.
Positive traits these policies have in common:
- Premium waiver for some nursing home confinements longer than 180 days
- Paid-up premiums after age 95
- Premium rates will never change
- No physical exam
- Accepts AARP Members ages 50-80 and spouses ages 45-80*
- 30-day refund option
*Varies by state
Pros and Cons of Permanent Life
The Permanent Life policy has a lot to offer for healthy seniors. Read on to explore pros and cons that differentiate it from the Guaranteed Acceptance Policy.
Pros:
- The Permanent Life policy allows for a death benefit as high as $50,000. This could be ideal for those who want to leave something extra for their beneficiaries after funeral expenses are paid.
- According to AARP’s website, premiums are fairly low. Gender, age, and death benefit size determine the premium.
- The Permanent Life policy stands apart from the Guaranteed Acceptance policy because it has no waiting period for full benefits, except in the case of suicide.
Cons:
- Although it requires no exam, this policy is partially underwritten with a few health questions. If you don’t meet certain health standards, you won’t qualify.
Pros and Cons of Guaranteed Acceptance Life
Guaranteed Acceptance Life is very similar to Permanent Life, but easier to qualify for and has a few extra restrictions. Our pros and cons lists can help you decide if it’s the right policy for you.
Pros:
- You’ll never need to answer a single question about your health with this plan. If you’ve had health issues that disqualify you from other life insurance policies this policy could work for you.
- AARP and New York Life are both highly-rated companies with decades of experience
Cons:
- The available death benefit range is half that of the Permanent Life policy.
- Two-year Waiting Period during which your beneficiary will receive 125 percent of the premiums that you paid but not the death benefit. Full benefits are paid from the first day of coverage for accidental death, however.
State Farm
Best for Customer Convenience
State Farm began in 1929 and has evolved over the years to accommodate the changing needs of consumers. State Farm and its subsidiaries now offer about 100 different insurance and finance products. The foundation of State Farm’s relationship to its customers is its excellent local agents, of which there are about 19,000 throughout the United States.
State Farm might be best known for its automobile insurance, but it also provides life insurance – about 8 million policies – to a variety of customers. Getting Final Expense Insurance from State Farm can be extremely convenient because State Farm provides its customer choices in many ways. In many locations, you will have multiple agents in your town, so you’ll get to choose the office that you prefer. Payments are also flexible – you can choose to pay monthly or annually and you may receive a discount for annual payment. You can also choose to “go paperless” and pay online by registering an account that gives you access to 24/7 support, an overview of your policies, and much more.
State Farm Product Overview
Final Expense Insurance from State Farm is available in all states except Massachusetts. State Farm actually offers its Final Expense policy through two different companies. In New York and Wisconsin coverage is provided by State Farm Life and Accident Assurance Company, and the rest of the states are covered by State Farm Life Insurance Company.
The qualification process for a State Farm Final Expense (called $10,000 Whole Life in New York) policy is painless, with short, simple health questions that can be viewed beforehand online and no exam required. Read on to learn more about the pros and cons of this policy.
Pros:
- Affordable premiums that can be as low as $1 a day, or $28 a month, depending on your age, gender, location, and health
- Adequate death benefit of $10,000, close to the average cost of a funeral.
- Your policy builds a small amount of cash value over time as you pay premiums. If you choose to, you may access this as a loan.
- While not guaranteed, this policy has the potential to earn you dividends, depending on financial markets. Few other companies offer this as a feature of whole life insurance.
Cons:
- Not everyone can be approved for this policy. Your approval hinges on some basic questions about your current and past health.
- No flexibility on the benefit amount– the only amount you can set as your death benefit is $10,000, regardless if you want more or less.
- Accessing the cash value incurs interest, and anything left unpaid is deducted from the death benefit.
Transamerica
Best Customer Service
Transamerica was founded in San Francisco under the name of the Bank of Italy in 1904, and has continued to evolve since then. Eventually breaking ties with the banking side of business in the 1960s, the brand has evolved over the years to focus more on insurance and retirement plans. Recently, Transamerica has been recognized by the annual Diversity Best Practices Inclusion Index for its commitment to being a fair and inclusive employer.
Transamerica is the only company on our list that offers three different options specifically for covering your final expenses. Transamerica has excellent customer service, and agents prioritize empowering the customer with information. When you call this company and connect with the right department, answering your questions will be much more important to the agent than making a sale.
Transamerica Product Overview
*Many aspects of this plan, including where it is available and who is eligible, are affected by state laws.
Like all of the companies on our list, Transamerica does not require a physical exam of any kind for its customers to qualify for life insurance. The company does partially underwrite its policies through quick questions, so you are not guaranteed to be accepted. Your rate will be based on age, weight and height, and gender. Partial underwriting keeps Transamerica’s costs very low.
Common traits include:
The three different benefit plans that Transamerica offers share a lot of common ground.
- Simple health questions for the approval process
- Locked-in rates for life
- Maturity at age 121 with full death benefit payment to the policyholder if they exceed maturity
- Accumulated cash value you can borrow against
Because borrowing against the cash value often reduces your death benefit, Transamerica does not recommend this practice to its customers as anything but a last resort.
Pros and Cons of Immediate Solution
Pros:
- No waiting period for full benefits
- Death benefits up to $50,000
Cons:
- Those over 76 can only get death benefits up to $25,000
Pros and Cons 10-Pay Solution
Pros:
- Premiums are highest of any Transamerica burial insurance products, and may be $100 or more
- Premiums are only owed for 10 years, after which point you are covered for life without any more premiums
- No benefits waiting period
- Death benefits up to $50,000
Cons:
- Those over 76 may have their death benefits capped at $25,000
Pros and Cons of Easy Solution
Pros:
- Lower premiums than the other Transamerica policies
- Rates are locked-in for the life of the policy
Cons:
- Two year waiting period for full death benefits
- Stricter approval process than other Transamerica policies
How To Know If Burial Insurance Is Right For You
If you’ve read our pros and cons of burial insurance and reviewed the basics of what traditional life insurance has to offer in contrast, you might still be weighing your options. Burial insurance is a great choice for many seniors, but depending on your means, family dynamics, and how far ahead you start planning, you have several other options for planning for your final expenses.
With some alternatives, you may actually save money in the long run, but only if you begin saving far in advance. Most of the options below don’t require monthly payments, but they do require significant upfront costs. Read on to learn more about these alternatives and decide if burial insurance is right for you.
Common burial insurance alternatives:
A joint savings account: For this option, you can simply put aside between $5,000 and $25,000 in a joint bank account. Give a trustworthy family member full access to this account so that when you pass away he or she will still have equal rights to withdraw funds without red tape. The family will be able to immediately cover your final expenses. This can be a risky option in that access to the cash is completely unrestricted.
An irrevocable funeral trust: Set aside between $5,000-$15,000 (this varies by state law) in an irrevocable funeral trust (also called IF Trust, IFT, and Irrevocable Burial Trust) that passes to the complete control of the beneficiary you name. An irrevocable trust removes that money from your countable assets, which can help you qualify for Medicaid. You will never again be able to access that money for yourself, however.
A pre-paid funeral: With this option, you pay a funeral home or cemetery ahead of time for a pre-selected funeral package. Before buying, ask exactly what’s included, what happens if you move out of the area, if the company goes out of business, or if you want to cancel the policy. The Federal Trade Commission provides valuable tips for exploring this option. In some cases, you might make payments, but usually you’ll pay for this all at once.
All of these alternatives to burial insurance assume that you either have money on hand or are young enough to save it. When that’s not the case, burial insurance is your best option. You only need to pay small amounts of money at a time for burial insurance, and the death benefit will cover your final expenses. In some cases, the death benefit may even be large enough to leave extra money for the personal use of your beneficiary.
How To Choose The Best Burial Insurance Policy
There are many options for burial insurance, and finding the right one for you can be an intimidating task. It’s important to approach all companies with a clear idea of your own needs so that you can quickly eliminate from your list the companies that don’t meet your standards. Below, you’ll find practical steps you can take to clarify your personal search parameters and make the most out of your burial insurance.
Step 1: Determine the death benefit amount that you need
Funeral costs are often calculated separately from cemetery costs, and ideally, you want to cover both for your loved ones’ sake. Estimates on funeral and burial costs vary widely, but the minimum number is frequently about $8,000. Insurance companies usually offer death benefits between $5,000-$25,000, so you should be able to find a policy that meets your needs.
You can call companies in your area to get an idea of what your funeral and burial preferences are likely to cost. You may want to factor in inflation when making your final death benefit decision.
The following lists provide a snapshot of costs to consider:
Funeral Costs
- Funeral home fees for the funeral or showing
- The casket or urn
- Cremation, embalming, casket sealing, and related services
- Flowers
- Printed materials
- Transporting the body from near or far
Cemetery Costs
- The graveside service
- Fees for opening and closing the grave
- A plot or cremation niche
- A vault or liner inside the grave
- A marker or headstone
The Federal Trade Commission provides an expanded checklist you may also find helpful.
Step 2: Calculate a premium amount that fits into your budget
For a death payout of $25,000, you may find that premiums commonly cost anywhere from $50-$200. Your gender, age, location, and health can heavily influence this, however, and a smaller or larger death benefit will also impact your premium. Look at your budget and decide what your upper limit on premiums is so that you won’t feel pressured when looking at sales materials. If you can qualify, a policy that requires some health questions is almost always more affordable than a guaranteed acceptance policy.
Step 3: Compare policies by asking specific questions
You can often find prices online, but you’ll want to call or meet with an agent to get into the details of most policies. Ask about premiums in addition to the following questions:
- Is there a waiting period for benefits? Many policies won’t pay the full death benefit until you’ve had the policy for over two years. It’s best to find a policy that has no waiting period, but if that’s not possible in your area or for a premium that you can afford, then ask each company about the details of the waiting period and choose the one that’s the most generous.
- Will my beneficiaries have to deal with taxes? Most death benefits will be tax-free, but you should still ask about this in case the insurance company has a special kind of policy. You don’t want your beneficiary to be dealing with a large income tax that could significantly reduce their ability to pay for the funeral you planned.
- How many fees are associated with this policy? Finding a policy with no administrative fees is rare, but you’ll want to find a company that’s transparent about what fees they charge. Be sure to ask, but also be prepared to go over the fine print before signing anything. Fees are sometimes deducted from the cash value of the policy monthly.
- When does the policy mature, and what happens at maturity? Even whole life policies can reach maturity, though it’s unusual that they will before you pass away. Ask how payment works if you do outlive the maturity of your policy. As the policy holder, you’re likely to face taxes if you receive the death benefit when the policy reaches maturity.
- Are there any discounts available? Many companies allow for monthly, quarterly, semi-annual, and annual payments. They may discount less frequent or automatic transfer payments.
- Will my premium ever rise? Companies who follow best practice for this kind of policy will lock-in your premium from the beginning as long as you do not cease making payments or change the coverage amount. Verify that the company will not raise your prices over time.
Step 4: Fully inform your beneficiary of your decision
Occasionally, seniors set up life insurance policies that are never cashed out because their beneficiaries don’t have enough information to receive the payment. This can happen if, for example, you tell your beneficiary about the policy, but forget to tell them the name of the company, or if you tell your family you have a policy but they don’t know who you designated as the beneficiary.
To avoid confusion and make claiming the death benefit easier, you can make multiple copies of your policy information. File one copy along with other important documents in your home and tell the beneficiary where it is. You can also give your beneficiary a copy and consider leaving a copy with your lawyer if applicable to your situation. Discuss with your loved ones what kind of funeral the funds are likely to cover so that they know how to make the most of the payment when it comes.
How To Get Help Paying for a Funeral
While it’s highly recommended to get burial or life insurance to help cover funeral expenses, insurance may not be an affordable option for some low-income seniors and their families. Family members may also find that a loved one passed away unexpectedly and it’s too late to purchase an insurance policy. In these cases, seniors or their loved ones will need to find other sources of financial assistance.
Charities, nonprofits, and religious organizations may be able to provide monetary support to these individuals as long as they qualify for their services. Federal, state, and local programs are also available and can help with funeral costs and related expenses. Further, seniors may be able to pass on Medicare-provided funding to their beneficiaries or set aside burial funds while still qualifying for Medicaid or SSI benefits. All of these options can help seniors and/or their loved ones with funeral expenses and will be explained in detail in this financial resource.
Charities, Non-Profits, and Religious Organizations
Low-income individuals or families who cannot afford the costs of a loved one’s funeral may qualify for financial assistance through various charities, nonprofits, and/or religious organizations. While the following table includes examples of such organizations currently offering help with funerals and related expenses, additional resources can be found by contacting the Red Cross Condolence Care Call Center toll-free at 833-492-0094. A Disaster Spiritual Care provider at this call center can help further assist those who need help locating additional sources of financial support.
Organization
How it Can Help
Contact Information
Nonprofit FCA affiliates located across the United States educate and advocate for those who need funeral-planning assistance and can help them save thousands on unnecessary funeral expenses.
Find your local FCA, fill out and submit a contact form or call the Funeral Consumers Alliance office manager at 802-865-8300.
There are 146 Jewish Federations in North America. These can provide free Jewish cemetery plots as well as assistance with burial services to members of the Jewish community.
Contact The Jewish Federations of North America at 212-284-6500 or click on your state on the Fed Finder map to find a Federation near you.
While Catholic Charities agencies may have different policies, burial assistance for low-income individuals and/or families may be included among their available services.
Enter your location information on the Find Your Local Catholic Charities page to find your closest Catholic Charities agency.
This nonprofit has helped over 65,000 poor Jewish families in the New York area afford a Jewish Burial.
Call 212-239-1662 or fill out a form on the Contact Us page.
Muslim families in New Jersey that cannot afford burial expenses can receive financial assistance from Masjid Al-Wali.
Call 908-444-0595
Federal Government Programs
The federal government offers several programs that can partially or fully fund funeral costs for certain individuals under qualifying circumstances. These include FEMA funds to help cover the costs of COVID-19-related funerals, Social Security Administration death payments for surviving spouses or children, and Bureau of Indian Affairs’ financial assistance for low-income American Indians or Alaska Natives. Find out more information about these options in the table below.
Organization/Program
How it Can Help
Further Details and/or Contact Information
FEMA reimburses up to $9,000 worth of funeral and related expenses for those who died due to COVID-19.
Find out more about how to be reimbursed for the costs of a COVID-19 funeral on FEMA’s COVID-19 Funeral Assistance page.
A one-time Social Security Lump Sum Death Payment (LSDP) of $255 is available to an eligible surviving spouse or child.
Applications cannot be completed online. To apply, call 1-800-772-1213 or contact your local Social Security office.
Provides assistance to cover the burial costs of deceased low-income American Indians and Alaska Natives.
Visit the Bureau of Indian Affairs website for program applications, or call the bureau at 202-513-7673.
Family members of deceased veterans can receive allowances to help with the costs of their gravesite or internment, burial and funeral, and more.
Eligibility criteria, descriptions of available funding, and application information is available on the VA website.
State, City, and Local Resources
State social service agencies can provide information on programs that offer financial aid for burials or other funeral costs. These programs may be funded either at the state or local level and payout amounts as well as eligibility criteria may vary. A majority of programs are specifically for low-income individuals or families with limited resources. To receive funds, individuals must formally apply and receive approval.
Organization/Program
How it Can Help
Further Details and/or Contact Information
Your state’s social service agency
Each state has a social service agency that can provide information on state programs, including those that provide financial assistance for funeral and burial expenses. Exact amounts given and qualifying criteria may vary.
Select your state from the drop down menu to find information for your state social service agency.
211.org
Dialing 211 connects residents in all 50 states, the District of Columbia, and Puerto Rico with an operator who can help them find essential community services near them. Operators may be able to locate any organizations that offer burial assistance.
Find out more about the Dial 211 program on the 211.org website or dial 211 on your phone to connect to an operator and locate services.
Funeral Funding with Medicare, Medicaid, and SSI
It is possible for seniors to set aside savings specifically for the purpose of covering their funeral costs while still qualifying for Medicaid or SSI, both of which have strict asset limits. It is also possible for seniors to leave Medicare-provided funds to their beneficiaries if they choose a certain type of Medicare Advantage plan as their form of health insurance. Below we describe these options in further detail.
Medicare Advantage MSA Plans
Medicare will not directly cover funeral or burial costs. However, Medicare Medical Savings Accounts (MSAs) are a kind of Medicare Advantage plan that could potentially provide funds for such expenses under certain circumstances. MSAs consist of a high deductible health plan and a medical savings account that Medicare pays into annually. The money in this account is used to cover the costs of Medicare-covered healthcare. However, funds that remain in this account after a MSA owner’s death can be used by beneficiaries for funeral expenses. Find out more about this option on the Medicare website.
Medicaid
Like Medicare, Medicaid will not directly cover expenses associated with funerals. Further, to qualify for Medicaid benefits, seniors typically have to be very low-income with assets below set limits. While this would otherwise make it difficult for seniors to keep savings for funeral expenses and still qualify for Medicaid benefits, Medicaid allows burial funds of up to $6,000 per spouse to be excluded from asset calculations. In this way, seniors can provide their loved ones with money for their funerals while still qualifying for needed benefits.
SSI
Similar to Medicaid, up to $1,500 per spouse can be set aside for burial expenses and not count as a resource in Supplemental Security Income (SSI) eligibility calculations. However, this is only if seniors do not have other arrangements such as life insurance policy, in which case the $1,500 set aside will be counted towards the current SSI resource limits of $2,000 for an individual or $3,000 per couple. Visit the Social Security website for further details on burial fund policies.
Frequently Asked Questions
What is a death benefit?
The life insurance company pays the death benefit to your beneficiary following your death. You may be able to name multiple beneficiaries, and it may be wise to do so in case one passes away. In the case of burial insurance, you should make the death benefit as close to what you think your final expenses will be unless you want to leave extra for the beneficiary’s use. The death benefit is typically tax-free, especially if the insured person is also the policy owner.
Can the insurance company cancel my policy?
With most burial insurance, your policy cannot be canceled unless you neglect paying your premiums or unless you misrepresented information on your application.
Your policy may, however, mature if you reach age 100 or 121. When your policy matures, the full death benefit should be offered to you, the policyholder. This situation is not ideal since you will have to pay taxes on the benefit, whereas if it were passed to the beneficiary upon your death it would have been tax-free in most cases.
Does my policy have cash value?
Your policy may gain cash value over time. Although a heavily advertised aspect of whole life insurance, the actual value may be quite low in proportion to the policy size. Many policies allow you to borrow against the cash value of your policy at interest. If you don’t pay the borrowed amount and the interest back, this debt will be deducted from the death benefit that your beneficiary receives. Cash value is only available while you are alive and does not add to the death benefit.
What’s a limited benefit period?
Insurance companies sometimes use a two-year limited benefit period to cut their costs, especially if they are offering a guaranteed acceptance policy which is a high financial risk for their business. This waiting period may also be called a graded death benefit.
During the waiting period, the beneficiaries of those who pass away within these two years won’t receive the full death benefit. Instead, they might receive a percentage of it, receive back all or a portion of the premiums that were paid, or some other arrangement of partial compensation.
When exploring companies, make sure you clearly understand if there is a limited period and exactly what the payout will be if you pass during that period.
Do burial insurance companies charge hidden fees?
Some burial insurance companies include fees for administrative costs, and you may miss them in the fine print, so it’s good to ask specifically about fees as you shop. Examples of common insurance fees to ask about include surrender charge fees and policy fees, but there may be others or they may go by different names. If you do find out about a fee, ask if it’s one-time or repeating.
What happens if I can’t afford my premium anymore?
If you cannot afford your premium anymore, you will have to surrender the policy. You may receive some of the cash value of the policy back, but it will likely be less than you’ve paid in premiums. You will not receive the death benefit. A surrender charge may apply.
What factors affect my premium?
For burial insurance policies, premiums are usually based on your gender, age, location, and sometimes health when you apply. The death benefit amount that you choose will also influence your premium.