Although burial insurance is a type of life insurance, it generally offers low death benefit amounts. Burial coverage provides a life insurance option for seniors and those in poor health when traditional life insurance is no longer an option.
However, those who are young and healthy may want to consider traditional permanent or term life insurance. The ratio of costs to benefits of a traditional life insurance policy is generally lower than burial insurance.
Burial insurance can be worth it if you’re a senior without other life insurance policies or savings to cover the cost of a funeral. A burial policy could be an affordable way to help your loved ones cover your burial and funeral costs when you pass without having to max out their credit cards.
Many life insurance industry products could cover the cost of funeral expenses, including term and permanent coverage. For example, you might choose a death benefit on your whole life policy that’s enough to pay for your funeral costs and give your loved ones enough money for financial stability.
Burial insurance, however, is specifically designed to cover end-of-life expenses such as funerals or burial costs.
The biggest drawback of burial insurance is the high cost ratio compared to other types of insurance. When comparing the cost to benefits of a burial insurance policy, you’ll pay more per dollar of death benefit than other types of life insurance, even though the monthly premium may be lower.
Additionally, most burial insurance has a graded death benefit that works on a type of waiting period. This means the insurance company may reduce the full death benefit or deny a claim if you die within the first two years of the policy.
Burial policies and funeral policies typically offer the same benefits — providing money for your loved ones to use toward your burial, memorial service and other end-of-life costs.
