Burial insurance

It is life insurance sized for the end of life, not for replacing a paycheck. You pick an amount, pay a premium, and when you die the company pays that amount to the person you named as your beneficiary.

Most burial policies are whole life. That means the coverage lasts for the rest of your life as long as you pay, and the premium is set on a schedule when you buy. The NAIC Life Insurance Buyer's Guide (opens in a new tab) calls this a cash value policy, because it can build a small cash value over time.

You will also hear it called final expense insurance or funeral insurance. The idea is the same. Our final expense insurance guide covers the two main kinds in more detail.

The policy pays cash to your beneficiary, not to a funeral home. That gives your family room to use it where it is needed most. Common uses include:

• The funeral home: basic services, transfer, preparation, viewing and ceremony
• A casket or urn, a burial vault, a cemetery plot and a headstone
• Cremation, if that is your wish
• Flowers, an obituary, and travel for family
• Medical bills, credit cards or other debts left behind

Cemetery costs are often the surprise. The national funeral median from the National Funeral Directors Association leaves out the plot, the headstone, flowers and the obituary, so a family can spend more than the headline number.

Here are the 2023 national medians from the National Funeral Directors Association. A median is the middle price, so half of funeral homes charge more and half charge less.

For the full line by line breakdown, see how much a funeral costs. If you are leaning toward cremation, the cremation cost guide shows where that money goes.

We do not list prices, because the premium is set for each person. Insurers look at a handful of things:

• Your age when you buy. The younger you start, the lower the premium usually is.
• Your health, if the policy asks health questions.
• Whether you use tobacco.
• The coverage amount you choose.
• Your state and the company, since plans and prices vary.

Health questions matter most. The NAIC buyer's guide says a policy that does not ask for detailed health information usually costs more and gives less coverage than one that does. So if you can answer a few health questions, it is worth seeing what those plans cost before you settle on one that asks none.

Burial insurance tends to make sense for people who:

• Are in their 50s, 60s, 70s or 80s and want a set amount for the funeral
• Do not have savings set aside that their family could use right away
• Want a fixed premium that does not change as they age
• Have health issues that make larger policies hard to get

It may not be the right fit if you need a large amount to replace income or pay off a mortgage. A term or larger whole life policy is built for that. Our life insurance for seniors guide compares the options.

It depends on the kind of policy. Some plans that ask health questions pay the full amount from the start for people who qualify. Guaranteed issue plans, which ask no health questions, usually do not.

For example, AAA Life's guaranteed issue whole life plan pays the full amount for an accidental death, but for other deaths in the first two years it pays back the premiums paid plus 30%, according to its product page (opens in a new tab). Other companies use different terms. Read how guaranteed issue and waiting periods work before you choose one.

You apply through a licensed insurance agent, by mail or online. You are the insured person, so you answer the questions and sign the application yourself. Tell the truth on every health question; the NAIC notes that false answers found later can reduce or cancel the coverage.

If you want to compare plans, our short quiz asks about your age, state, coverage amount and budget. Licensed insurance agents then contact you with options, and you decide if anything fits.