Burial Insurance vs. Life Insurance
Burial insurance differs from other life insurance policies mainly in the purpose it serves. Life insurance is a broader category that covers term and permanent policy types, which vary across coverage duration and value and fulfill varying needs like replacing income, paying off debts, or supporting family for years. Burial insurance, on the other hand, is usually a type of permanent life insurance with a smaller coverage amount designed to cover final expenses and burial costs.
Quick Summary
Primary Goals: Life insurance is ideal to fulfill wider financial goals like covering financial obligations, estate planning or legacy building, whereas burial insurance is just enough to meet end of life expenses.
Coverage Amount: Compared with life insurance, which may offer a higher death benefit depending on eligibility, burial insurance usually provides smaller coverage amounts, often between $5,000 and $25,000.
Eligibility: Burial insurance is typically easier to qualify for and often doesn’t require a medical exam, while life insurance may require one depending on the policy type and insurer.
Ideal For: Burial insurance can be a practical choice for seniors or people with health conditions, while younger adults may benefit more from other life insurance options.
What Is Burial Insurance?
Burial insurance, also called final expense or funeral insurance, is a small permanent life insurance policy, typically a type of whole life insurance. Key features include:
- It comes with a modest coverage amount often ranging between $5,000-$25,000 with level premiums that stay the same throughout your life.
- It is often offered without a medical exam, which can make it a practical option for seniors or people with health conditions.
The coverage stays active as long as premiums are paid, and the death benefit is passed to your beneficiaries after your death. While beneficiaries can use the payout for any need, it is designed to cover costs around funeral service, burial, cremation, transportation, memorial expenses, clear small final medical bills, utility or rent, and for administrative costs like death certificates. Unlike other life insurance policies, it is not meant to cover long-term financial goals. Its purpose is simple: to help prevent your loved ones from facing additional costs during a time of grief.
What Is Life Insurance?
A life insurance policy is an agreement between you and an insurance company, where the insurer pays a lump sum benefit to your beneficiaries in exchange for regular premium payments, for a set term or for the lifetime depending on the policy type. There are two main types of life insurance policies:
Term Life
Offers coverage for a set term, typically 10-40 years at fixed premiums. If you die during this term, your beneficiaries may receive the death benefit. If you outlive the term, the policy expires.
Permanent Life
Offers lifetime coverage that does not expire as long as premiums are paid. It also includes a savings component called cash value, that you can access through loans and withdrawals. Some subtypes of permanent policies include whole life, universal life, indexed universal life and variable universal life. Premiums are generally fixed in whole life policies, while other permanent policy types may allow flexible premium payments. Cash value growth also differs by policy type and loans and withdrawals impact the death benefit available for the beneficiaries.
Burial insurance is typically a form of whole life insurance policy, but other permanent policies may fulfil wider financial goals like covering financial obligations, estate planning or legacy building. Coverage amounts are typically higher (and can reach $1 million or more and you may need to go through a medical exam, depending on your eligibility and underwriting requirements.
Burial Insurance vs. Life Insurance: Key Differences
Like all life insurance policies, burial insurance also offers financial benefit to your beneficiaries after your death. However, unlike traditional life insurance policies that are built for varying purposes like income replacement or legacy goals, burial life insurance is specifically designed to cover end of life costs through its modest coverage amount. Here are some differences between burial insurance and life insurance on the basis of primary purpose, coverage size, cost, who it’s best for, and payout timeline:
Medical Exam: Burial Insurance vs. Life Insurance
Burial insurance policies are typically no-exam policies. While some insurers may need you to answer a few questions, you don’t typically go through a medical exam. Life insurance policies, on the other hand, may involve multiple risk assessment tests, including a medical exam, health questionnaire or simple lab tests (blood and urine sample).
This is one of the crucial differences between life insurance and burial insurance, that helps explain many of the other distinctions between the two:
- Burial insurance is offered without a medical exam, so you get modest coverage due to high risk factors, and payouts are released faster. Without health examinations these are typically easier to qualify for.
- Other life insurance policies may or may not need a medical exam, so you get a higher coverage due to detailed risk assessment, and payouts often take several weeks to release. Underwriting is stricter, especially if you have health issues.
Waiting Period: Burial Insurance vs. Life Insurance
Some burial insurance policies , especially guaranteed issue policies may include a waiting period of 2-3 years before full benefits apply, meaning death due to non-accidental reasons may not be covered in the initial years. In such cases, beneficiaries may receive a return of premiums paid, sometimes with interest, depending on the policy. Unlike burial insurance, other life insurance policies, especially fully underwritten ones, don’t typically include a waiting period.
How Much Does Burial Insurance and Life Insurance Cost?
The cost of burial insurance and life insurance depends on multiple factors like your age, gender, health, coverage amount and underwriting process (medical exam/no-medical exam). Typically:
- Burial insurance offers modest coverage, so premiums are still relatively high for the face value you get on the policy.
- Most of the burial insurance policies are offered without the medical exam through guaranteed issue (without medical exam or any health questions asked) or simplified issue underwriting (no medical exam but health questionnaire). Guaranteed issue policies are comparatively costlier than simplified issue policies.
- Other life insurance policies can be availed with or without a medical exam, depending on the policy type and insurer. Medical exams may help you qualify for lower rates if your health is good.
Overall, burial insurance costs more per dollar of coverage as it offers permanent coverage without a medical exam, typically through guaranteed issue underwriting.
Cost of Burial Insurance
Here are some estimated monthly premium costs for coverage amount of $20,000.1
Cost of Life Insurance
Here are the estimated life insurance premium rates for a coverage of $500,000 for a 30-year term life and whole life policy.2
Expert Tip
Can I switch from burial insurance to life insurance later?
Yes, you can switch from burial insurance to life insurance later, but it usually is not a direct conversion. In most cases, you would need to apply for a new life insurance policy that may have its own underwriting process including a medical exam. Remember, insurers factor in your current age and health, so premiums could be higher and approval may be limited if you apply in your later years. If finding options is difficult, it’s good to continue your burial policy and add a life insurance policy to cover both immediate and long-term financial goals.
Senior Director Life Underwriting
When Does Burial Insurance Make More Sense Than Life Insurance?
Opting for burial insurance makes sense when accessibility to coverage matters more than the coverage value. It’s typically chosen by people who don’t want to burden their loved ones with end-of-life costs during tough times, or when someone is not able to qualify for traditional policies due to health issues. You may consider burial insurance if:
- You want your policy to cover only funeral and final expenses, not fulfil income replacement or other long-term goals
- You’re applying in the later stages of life and want straightforward coverage
- You don’t want to appear for a medical exam for a moderate coverage
- Your health conditions make it harder to qualify for traditional life insurance
When Does Life Insurance Make More Sense?
Opting for a life insurance policy may make more sense when your financial responsibilities go beyond covering just the final expenses. It makes more sense when you want to address broader goals around income replacement, legacy building and your family depends on you entirely. You may consider life insurance if:
- Your family depends on your income for daily household expenses like rent, bills and groceries.
- You have active loans and debts for a longer term like a mortgage or home loan.
- Your children are still studying and you have major education costs to plan for.
- You are young and in relatively good health to appear for a medical exam and qualify for better rates and higher coverage.
Can You Have Both Burial Insurance and Life Insurance?
Yes, you can have both burial and life insurance. Though these policies serve different purposes, for some people combining them can make sense. Here’s how this can help:
- With modest coverage value, burial insurance can help fulfil short-term costs.
- Life insurance can be utilized for bigger long-term goals like legacy building, estate planning, or covering major financial obligations like debts and education costs.
- With both in place, you can ensure that your end-of-life costs are covered without touching the larger policy.
- It especially makes sense when you have a term life policy that will eventually expire.
This option also gives your beneficiaries more flexibility in how benefits can be used. However, ensure that you’re able to pay premiums for two policies during your lifetime.
FAQs About Burial Insurance vs. Life Insurance
Burial insurance and final expense insurance are not separate policy types. They are essentially the same coverage options, consisting of small whole life policies designed to cover end-of-life expenses such as burial or funeral costs, as well as small medical bills, debts, and other final expenses.
Choosing the right option between burial insurance and life insurance depends on your age, health and financial goals. For seniors in the later years, who don’t qualify for traditional coverage, burial insurance can be a good fit to spare loved ones from additional costs in times of grief. Younger adults may benefit more from life insurance, especially when they're healthy and can complete a medical exam. Life insurance can help them get higher coverage for long-term financial protection.
Yes, beneficiaries can use the life insurance payout for any purpose including covering funeral and burial costs. However, unlike burial insurance that typically offers faster payouts to cover such costs, life insurance payouts may take longer.
Yes, in comparison to life insurance, the per dollar of coverage typically costs higher when you opt for a burial insurance policy. These policies are offered without a medical exam, so due to the high risk factor you get a modest coverage value that is relatively less for the premiums you pay. The actual cost depends on your personal factors.
Yes. Though burial insurance payouts are primarily designed to cover end-of-life costs around burial, cremation or small medical bills, beneficiaries can use the money for any purpose. However, these payouts are limited due to a modest coverage value, so they might still not fit with fulfilling bigger or long-term financial obligations.
Burial insurance policies are designed to cover immediate final expenses with a smaller coverage amount, so the payout happens quickly. Life insurance policies may come with higher coverage so the payout often takes two or four weeks from when the claim request is submitted. However the actual time may vary depending on the policy type, documentation process and insurer.
There is no specific age cutoff to choose one over the other. But, in general burial insurance is typically a practical option in later stages, for example in or after 50s or 60s. Qualifying for a new life insurance policy is typically difficult at that stage of life due to higher health risks, so burial or final expense policy can help you get some level of coverage. It is also relevant for someone in their earlier years when they can’t get coverage due to health issues.
Author
Chief Underwriter
Expert review
Chief Compliance & Privacy Officer
Apr 28, 2026
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