Funeral Insurance – Best Rates, Reviews and Recommendations

Which funeral insurance companies and policies are the best? You have a lot of choices when it comes to funeral insurance (also known as burial insurance or final expense insurance.) We are here to help make sense of your options and choose the best funeral insurance policy for you.

Funeral Insurance Basics

• Funeral insurance is a small, whole life insurance policy that can cover end of life expenses. It is also referred to as final expense or burial insurance.

• When you die, the value of the policy is paid to your family members in cash, tax-free.

• They can use this money for anything; however, most policies are purchased for the purpose of paying for funerals, burials and any other final expenses.

The Benefits of Funeral Life Insurance

The benefits of burial or funeral insurance include:

• A quick payout of cash in the event of your death.
• Flexibility to use the payout benefit however your beneficiaries like.
• A small emergency fund. (The policy will eventually build up a cash value that you can access.)
• Easy applications and broader approval than other forms of life insurance. (No medical exams, guaranteed coverage options available).
• Premiums stay level. (Your cost-per-month will not increase).
• The face value (payout) will not decrease over time.

Competitive Carriers / Insurance Companies

The best funeral insurance policy for you will depend on your needs and purchasing circumstances. Often, rates are based on simple health underwriting, gender and age. Some companies are more competitive for some people depending on their ratings.

Some of our recommended insurance companies include:

• Mutual of Omaha
• Foresters
• Transamerica
• Royal Neighbors

Funeral Insurance Cost

The cost of your funeral / final expense policy will depend on how much cash benefit you will need when you die and your underwriting situation when you purchase it. Your age is a primary factor on how much your policy will cost.

Frequently Asked Questions – FAQ’s

What Does Funeral Insurance Cover?

These policies are typically purchased to cover the following:

• Funeral Expenses
• Burial Expenses
• Caskets
• Rental Fees
• End of Life Medical Fees
• Pay off small debts

However, as mentioned before, this money does not have to be used for any particular thing. Your beneficiaries are provided a lump sum of cash when you pass, and they have the right to use the money for whatever they may need.

Is the Policy Payout Taxed?

Funeral / Burial Insurance is tax-free. Just like any other life insurance policy (that follows the rules set by the U.S. government), you do not have to pay taxes on the money paid out by your policy.

What is the Difference Between Insurance vs Prepaid Plans?

Final expense / burial insurance is different than buying a prepaid funeral plan, burial plot or cremation service. You can directly prepay for end of life services at various service providers, funeral homes and burial locations.

Your insurance cash payout is not prepaying for any vendors or locations. It is just a lump sum paid to your family (or beneficiaries) for them to use as they wish.

You can use a prepay plan in addition to funding a life insurance plan, or as a stand-alone option. Many people like the freedom of their family being able to use the life insurance money as they wish. Most often, the circumstances and associated costs of your death are unpredictable. You can alleviate stress for your family by giving them flexibility in using your policy funds.

Can I Buy Funeral Insurance Online?

Yes, the simplified nature of these life insurance applications do afford the opportunity to purchase a policy online in some instances. However, since there are many options available from multiple companies, we suggest you talk to an independent insurance agent.

Independent insurance agents will often represent multiple companies and can listen to your needs and direct you to a company that will have the best plan for your unique needs.

Find an agent near you here.

Burial Insurance for Seniors Buying Guide

This is your ultimate guide to burial insurance (also called final expense insurance or funeral insurance).

Burial insurance plays a unique role in your financial planning. Many people buy these policies to help their loved ones cover end of life expenses for themselves.

Two Reasons for Having End of Life Insurance

• Sometimes, people buy end of life insurance because they do not have cash on hand to cover funeral expenses, and they do not want their passing to put a burden on their family.
  
• Other times, they might have cash on hand, but still want to provide their family with accessible funds, that is not in stock form, to pay for their funeral/burial. They do this in order to preserve their cash/investments to pass on to their family.

An Example of How to Use a Burial / Final Expense Policy

A couple years ago, my family lost my father in law. He was survived by his wife of 49 years. However, he had decided a few years back to purchase a final expense policy to cover his funeral and burial expenses in the event of him passing. Although he had plenty of investments that could have covered his expenses, he knew it would be easier for everyone just to have access to quick cash if needed.

My father in law was right. With his policy, we were able to “assign” funds from the policy directly to the funeral home and to the place we purchased the casket. That was much easier than freeing up invested retirement funds. Moreover, his widow didn’t have to worry about end of life expenses eating into her cash savings.

Do I Need Burial Insurance / Funeral Insurance?

From my story above, we can see that:

• In this instance, the final expense insurance policy wasn’t completely necessary. However, it was convenient, made everyone feel secure, and was generous.

• However, in other instances, burial insurance could be completely necessary for funeral/burial expenses. For example, if the person it is bought for lives on a fixed income, check-to-check, with no significant savings, then this policy could be a life saver for the survivors.

Can I just save for end of life expenses?

Yes, saving up for funeral expenses is one option, but sometimes this saving just doesn’t happen. In addition, death is often accidental or unexpected, and you might not have enough time to save up what you need.

Funerals and burials can lead to debt if your loved ones are not prepared to cover these costs. As a result, you will need a solid plan to cover these costs, and funeral / burial insurance is often your most secure option.

Let’s look a little deeper into what is final expense insurance and where / how to find a policy.

Final Expense / Burial Insurance Cost

So, what does final expense insurance cost? First, these polices are whole life policies, which means that it is a “permanent policy” you will fund and keep until you pass.

Second, burial insurance policies usually have “face values” (payouts) between $5,000 and $25,000. Since they are whole life, they will gain a cash value as you pay your premiums, and they will pay your beneficiaries their face value in cash when you die.

Your rates (premiums) will depend on:

• What company you choose.
• Your age and other underwriting criteria.
• How big of a face value (payout) you choose.

Applying for and Getting Final Expense Insurance Quotes

Insurance companies made burial insurance accessible to many types of people. Moreover, people that would be turned down by other forms of life insurance (or turned off by expensive premiums), can often find funeral policies that fit their needs.

Some funeral / burial insurance policies offer:

• Guaranteed coverage for certain age groups
• Ability to skip medical exams
• Affordable premiums that don’t increase
• Cash value in the policy to access in an emergency
• No wait periods to start a policy

So, how can you get burial insurance quotes?

I suggest talking to an independent insurance agent to compare quotes for any type of life insurance policy. They will be able to discuss your unique needs and match you with the best product for you.

More about Independent Agents

• Want to know why you should use an independent insurance agent? Read this.

• In addition, this article on what makes a good insurance agent, will help you to make sure your agent is a good fit for you.

Best Final Expense / Burial Insurance Companies

What is the best burial insurance company (aka final expense insurance carrier)? Depending on where you live, you will have multiple different options for insurance companies to choose from.

Some of the biggest players in funeral insurance are:

• Mutual of Omaha
• AIG
• Foresters
• AARP
• AAA
• Royal Neighbors of America
• Transamerica

We will have reviews of each company coming soon.

Conclusions

Is final expense life insurance worth it?

Yes, funeral insurance / burial insurance is worth buying for those you love in the event of your death. It provides:

• Quickly accessible funds to pay for end of life expenses
• A potential way to build a small emergency fund in cash value
• Peace of mind, that your loved ones will not be stressed about your end of life expenses in the event of your death.

Finally, if you need to talk to someone about a policy, please contact us here and we will find an agent to help you.

What is Final Expense Insurance?

Final expense insurance (also known as burial insurance or funeral insurance) is an insurance policy that provides cash to cover end of life expenses such as funeral and burial costs. They are typically smaller face values (the amount of payout money). In addition, insurance companies often structure them as whole life policies.

Introduction

My father-in-law passed away one year ago. (One year and one day from the day that I am writing this article.) His passing was my first experience in how important Final Expense Insurance is. It made everyone’s lives easier that he had a policy in place to cover end of life expenses.

Up until about 2 years ago, my father-in-law had a larger term policy on himself and his wife. However, they decided to cancel that policy since they were set financially for retirement. Fortunately, he had a good agent that set him up with a smaller Final Expense policy.

Now, my in-laws did have enough in savings to cover a funeral. However, it was just so much easier not to have to worry about how to get access to that cash. Their savings sat invested in mutual funds and stocks, which take a few extra steps to get to. Consequently, no one wanted to go through any more extra steps to get to it.

The insurance money was easy enough. We did have to wait for the hospital to file a coroner’s report before we could get the money. However, in the meantime, we “assigned” the insurance money to the funeral home and burial services before we had it. The whole experience was positive and the final expense money was helpful.

What is Final Expense Life Insurance?

Final expense policies are life insurance policies. Just like other types of life insurance, a final expense policy issued by an insurance company pays money to a designated beneficiary when the insured person dies.

Final Expense policies are whole life policies. Since whole life premiums are usually more expensive than term premiums, the face value is usually a smaller amount. The purpose of these policies is to pay for end-of-life expenses such as funeral costs, burial fees, and even medical bills. Of course, you can use the money for anything. It is just a cash payout.

The Benefits of a Whole Life Policy

As noted, a final expense policy is usually a whole life policy. This means a few things:

1. Your policy will have a cash value in addition to a face value. A cash value in an insurance policy is an amount of money you have access to for loans while the policy is active (in force). (The face value is the amount of money your beneficiary receives when you die.)
2. The cash value grows on a tax-deferred basis.
3. Your final expense policy will have level premiums. (The premiums will be guaranteed not to go up as you age.)

How Much Final Expense Insurance Do I Need?

When you are deciding how much cash you need consider funeral costs, burial costs, end-of-life medical bills, and any other loose ends. According to Mutual of Omaha, an average funeral costs about $7,000 to $10,000. Most people don’t have access to that sum in cash. Even those that do, might have other things they want to do with that cash.

Every insurance company prices premiums differently. Additionally, they all offer different face value amounts (i.e. the amount of money your beneficiary receives when you die). However, the usual amounts are anywhere from $2,000 to $40,000.

Can I Use My Policy for Long-Term Care (LTC) Costs?

Additionally, some Final Expense policies have accelerated death benefits for terminal illness or nursing home confinement. This means you can use the face value of the policy as cash to pay for these expenses. However, if your policy is only for $10,000, this will not get you far!

If you are looking to use insurance to cover long-term care (LTC) costs, a final expense policy is not the tool to use. Final Expense policies usually do not have a big enough face value, or accrue cash fast enough, to fund LTC. Look at funding an Indexed Universal Life (IUL) with a LTC/Critical Care Rider to help with this.

Additionally, you can get a Long Term Care Insurance Policy.

Is Final Expense Life Insurance for Me?

To start, insurance companies created final expense policies for older adults (typically 45 years old +). If you are younger and reading this article, there are better options for you at this time in your life. Head over to our IUL page to learn about Indexed Universal Life, or think about term insurance.

As you get older, term insurance and other higher face value whole life policies get more expensive. In addition, insurance takes on a different importance as your debts dwindle and your savings rise. You can read more about insurance needs as you age in our article “Life Insurance in Retirement?”

Final Expense Life Insurance is a great solution for older adults that need to take care of their loved ones by leaving cash to cover their end of life expenses.

How Do I Get a Policy?

If you are ready to get a final expense policy, it is time to talk to an agent. She or he can help you in creating a solution that meets all your needs. Different companies have different options and riders, so it is a good idea to work with an expert to set your’s up right. It does not cost you anything extra.

• If you live in Nebraska or Iowa. You can give me (your writer, Carly Cummings) a call or email by clicking here.

• If you live anywhere else in the U.S., I still like you, but I am not licensed to work with you. Please give one of our directory agents a call who live in your area.