Is Burial Insurance Worth It? How To Decide

is burial insurance worth it
Is Burial Insurance Worth It? How To Decide

There comes a time when every family has to lay a loved one to rest. This is a time of reflection, mourning, and celebrating the wonderful life of the deceased. However, the financial aspect to the end of someone’s life can easily be overlooked.

These costs leave a significant monetary burden for family members attempting to honor their loved one. Fortunately, there are ways to plan for these costs, but deciding which product or planning tool can be overwhelming.

A simple and easy way to prepare for these costs is by securing a burial insurance plan. There is a formula to make sure this product will be a quality option for you.

Is Burial Insurance Worth It?

If you or your family have no savings set aside for burial costs, then burial insurance is a vital alternative to honor the deceased without causing a financial disaster for the next of kin. 

To better understand the monetary needs for the costs associated with the end of one’s life, it is important to comb through the numbers.

Pig on calculator

How Much are End-of-Life Expenses?

The average cost for a traditional service with a viewing in the United States is $7,643 for a burial and $6,280 for cremation. The costs can vary drastically depending on the options selected throughout the process.

Not included in these price estimates:

  • Cost of Headstone, Monument, or Marker
  • Cemetery Property, Plot of Land, Columbarium, etc.

Additionally, there can be expenses that come at the end of life other than just burial costs.

  • Leaving an Inheritance
  • Legal Expenses
  • Medical Bills
  • Charity Donations
  • Post-Mortem Expenses
  • Remaining Balance on a Mortgage
  • Credit Cards
  • Remaining Car Loan Balances
  • Other End-of-Life Expenses

After adding all these expenses up, the final bill can be well over $20,000.

How are Burial Insurance Premiums Calculated?

When looking at how much burial insurance costs, the price will vary depending on four important factors:

Age: The older you are when you take out coverage, the higher the monthly premiums will be.

Gender: Males will pay more for coverage than females. There are several reasons why this is, but the most prominent component is that females live an average of four years longer than males.

Health: Your health has a major factor in the price point. If you are in good health, you will qualify for a less expensive plan than seniors in compromised health.

Policy Amount: You should expect your monthly payment to be higher the more coverage you take out.

What is the Average Cost of Burial Insurance?

The leading burial insurance companies offer very affordable rates. The chart listed has a range of prices someone will pay according to their age.

If you are in great health, you can expect to pay towards the price range’s low end. If you have a complex medical history or a terminal illness, anticipate paying towards the high end of this range.


Monthly Premium Range

Non-Smoking Rates

45$23 – $34$32 – $49$42 – $64
50$24 – $39$35 – $57$45 – $80
55$28 – $47$40 – $69$52 – $103
60$33 – $54$48 – $80$63 – $119
65$41 – $66$60 – $99$79 – $146
70$53 – $80$78 – $120$103 – $177
75$72 – $116$107 – $173$142 – $254
80$98 – $190$146 – $283$194 – $411
85$136 – $220$202 – $328$269 – $436


Monthly Premium Range

Non-Smoking Rates

45$27 – $47$39 – $68$51 – $89
50$31 – $56$44 – $83$58 – $110
55$36 – $61$52 – $91$69 – $135
60$44 – $68$64 – $101$84 – $149
65$56 – $91$83 – $135$110 – $199
70$75 – $106$110 – $158$146 – $233
75$100 – $150$148 – $223$197 – $328
80$140 – $232$208 – $346$276 – $461
85$193 – $312$288 – $467$382 – $621

How Does The Policy Work?

This product is a type of whole life coverage. The primary difference between burial insurance and most traditional whole life plans comes down to two main factors.

Simplified Issue Underwriting: This means that there are no medical exams, and the application can be completed in approximately 30 minutes over the phone.

Lower Coverage Amounts: The coverage amount ranges typically from $2,000 – $40,000. This makes the monthly premiums affordable for seniors on any budget.

Product Features

Once the plan has been issued and is in force, the policyholder will make a simple and affordable monthly payment. The life insurance company, in return, will guarantee three key benefits.

Coverage Lock: The coverage will never decrease or expire. It is locked in for life. Whether the insured passes in year one or year forty of the plan, the coverage amount will always be the same.

Price Lock: The price will never increase. Seniors on a fixed income know how important it is to budget costs down to the penny each month. There are no price games, just simple and straightforward payments.

Builds Cash Value: For every payment made, a portion will go towards the burial policy’s cash value, and over time you will be able to borrow from the policy if you choose. This money will need to be paid back and typically has a low-interest rate for the borrowed amount.

If you cannot pay this loan back before passing, the outstanding loan balance will be deducted from the money given to your beneficiary.

Plan Types

There are four types of plans that you will be able to qualify for depending on your health.

Level: This plan type offers no waiting period options and will have the lowest prices. Level is reserved for seniors with a healthy medical history, but some providers will take on specific medical conditions like diabetes or obesity.

Graded: This product has a two-year waiting period that typically has a progressive payout schedule within years one and two. Graded offers midpoint premium prices. If you have a more serious medical condition, this plan could be your best option.

Modified: This plan has a two-year waiting period. If you were to pass away in the first two years, your beneficiary would receive all the premiums paid plus 10 percent interest given to them. This product type is not recommended due to the high premium prices in correlation with the underwriting standards.

Guaranteed Issue: This plan asks no medical questions and approves every applicant. There is a two-year waiting period that offsets the risk life insurance company. If the policyholder passes away during the waiting period, the beneficiary will receive all premiums paid plus 10 percent interest. A guaranteed issue plan could be your best option if you have a chronic or terminal illness.

Do The Math

To make sure burial insurance policies are worth it for your specific financial situation, all that is needed a calculator and a little basic math.

The average life expectancy in the United States is 78.7 years old.

If a healthy female takes out a $10,000 policy when she is 65 years old, how long would she need to live for her to be overpaying the amount she could have saved in a savings account?

Let’s dig into the numbers:

Here is a simple chart to illustrate the amount of money she would pay into the policy up until the day she passed away.

Woman’s Age

Amount Paid Into Policy


The monthly premium would be $41 per month, and it would take over 20 years (244 months) for her to pay more than what she could have saved.

This example shows burial insurance is worth the money for her. The women would only begin to overpay for the policy after turning 86.

man and women trees

Other Financial Options

There are other vehicles to use when planning for the costs associated with the end of life.

Everyone’s financial situation is different, the next four planning tools are available for end-of-life planning, but each of them comes with its own considerations.

Savings or Investment Account

Placing money in a savings or investment account is noble and an idea that is worth pursuing in certain situations.

If you are a disciplined and frugal saver, then this could be an option for you. However, some risks still come into focus. As shown in the above example, you would need to live much longer than the average life expectancy to overpay for a plan.

Passing Away Unexpectedly: Saving or investing is a good thought in theory, but no one knows when their health will decline.

Investment Risk: There is always the possibility of your investment not performing the way you planned. This can leave your family members in a crippling financial position.

Inflation: No one knows what our dollar will be worth in the coming years, and it’s hard to predict if your savings efforts will be enough to cover burial costs in the future.

Traditional Whole Life Insurance

Traditional whole life has very similar benefits to burial insurance policies, with a few major differences.

Standard Whole Life Benefits: Like burial insurance, this product offers a coverage lock, price lock, and builds cash value over time.

Larger Policy Amounts: The death benefit for this product type typically start at a higher coverage amount. This means the monthly premium will be much more expensive than what one would want to pay for a policy designed to cover their death expenses.

Used To Preserve Wealth: There are many financial planners and experts that will counsel individuals to use this product as a tool to protect their wealth.

Term Life Insurance

Term coverage differs from whole life for a few main reasons.

Coverage Expires: The coverage amount will eventually terminate at a specific age or a period of time. Multiple products on the market will end the coverage agreement when you turn 80 years old.

Ultimately you are rolling the dice that you will not outlive your policy.

Price Is Cheaper: Since coverage expires, term policies will be cheaper than whole life coverage. Keep in mind not only do plans expire, some even raise in price the older you age.

Purchasing this plan type is fine as a short-term option, but you will have no coverage when you need it the most if you outlive your policy.

Pro Tip: Some products market themselves as a plan meant for your end-of-life expenses but actually expire when you reach a certain age. An example of this would be the AARP term plan.

Does Not Build Cash Value: Unlike a whole life plan, this product does not allow you to borrow from the policy. You are simply paying a monthly fee for temporary coverage.

Pre Need Insurance

Pre Need is much different than the previous products we discussed.

Covers Specific Services: Unlike the other two life insurance policies that allow the beneficiary to use the funds on whatever they choose, this product is designed to pay specifically for your burial costs.

Mortuary Is The Beneficiary: The life insurance company will pay the distribution directly to the mortuary. This will handcuff your family to what the funds are used for.

One Mortuary Only: You are making these arrangements and have an agreement with one mortuary. This raises a few red flags. What happens if you decide you want to be buried in another state or the company goes out of business?

These are all things to keep in mind when determining your best option.

Man with green hair thinking

Final Thoughts

a. The only way to answer is burial insurance worth it is by doing the math and seeing how long you need to live to overpay into the policy. Not only do you receive coverage, but you and your family will have peace of mind knowing your expenses are covered.

b. This plan type is straightforward and will help you leave a financial legacy for your family.

c. After doing the math and seeing how much coverage is needed, you will know how to move forward with your financial plan. Many variables come into play, and every person has a different financial situation. The key is understanding your options and choosing the best plan to use.

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