The short answer
The main difference between burial insurance and life insurance is size and purpose. Burial insurance is a small whole life insurance policy meant to help pay for a funeral and final bills, usually approved with health questions, and it lasts for life. Term life insurance pays larger amounts but only for a set number of years.
Key takeaways
- Burial insurance, final expense insurance, and funeral insurance are names for one product: a small whole life insurance policy meant for final costs.
- Term life insurance ends after a set number of years, so it may end before it is needed for a funeral.
- Larger life insurance policies usually cost less per dollar of coverage but often need a more detailed health review.
- If you already have life insurance, check how much it pays, when it ends, and whether you have borrowed against it before adding burial insurance.
How burial insurance and life insurance are different
Burial insurance is a narrow, specific kind of life insurance. It is not interchangeable with life insurance in general. When people compare "burial insurance vs. life insurance," they are really comparing a small whole life insurance policy meant for final costs with two other kinds of life insurance: term life insurance and larger whole life insurance.
Final expense insurance, burial insurance, and funeral insurance are the same product with different names. So "final expense vs. burial insurance" is not a real choice. For the full definition, see what final expense insurance is.
Burial insurance vs. term life vs. whole life: side by side
| Feature | Burial / final expense insurance | Term life insurance | Larger whole life insurance |
|---|---|---|---|
| How long it lasts | Your whole life | A set number of years | Your whole life |
| Size of benefit | Small, meant for final costs | Often large | Often large |
| Main purpose | Funeral and final bills | Replace income for a period, such as while paying a mortgage | Lifelong coverage, leaving money to family |
| Health review | Health questions, or none for guaranteed issue | Often a detailed health review | Often a detailed health review |
| Premium | Usually fixed for life | Fixed for the term, then usually rises sharply or the coverage ends | Usually fixed |
| Cash value | Small | None | Yes |
| Age limits | Often available at older ages | Harder to qualify for, with higher premiums, at older ages | Varies |
| Monthly premium | Lower than larger whole life insurance, because the benefit is small | Lower at younger ages | Usually higher than the other two |
Term life insurance vs. final expense insurance
Term life insurance pays only if death happens during the term, such as 10 or 20 years. If you outlive the term, the coverage ends and no benefit is paid. For a younger person with a family and a mortgage, that can be a good fit. For funeral planning, a policy that may end first is usually not a good match.
Example (hypothetical): At 62, a man buys a 20-year term life insurance policy. It ends when he turns 82. If he dies at 84, the term life insurance does not pay a benefit. A final expense insurance policy bought at 62 and kept in force would still pay.
Term life insurance often costs less per dollar of coverage at younger ages. At older ages it is harder to qualify for, and many term life insurance policies are not issued past a certain age. Some term life insurance policies can be converted to whole life insurance before a deadline. Check your policy for a conversion option.
Two features in many term life insurance policies matter for older owners, according to the NAIC:
- Renewal. Many term life insurance policies can be renewed even if your health has changed, but the premium goes up at each renewal. Some policies stop allowing renewal at a certain age.
- Conversion. Many term life insurance policies can be exchanged for a whole life or other cash value policy during a set conversion period, even if your health is no longer good. The new premium will be higher than the term premium.
Burial insurance vs. a larger whole life insurance policy
Both last for life and build cash value. The differences are size and how approval works. A larger whole life insurance policy can pay a much larger benefit, but it often involves a more detailed health review. Burial insurance keeps the benefit small, and approval is usually based on a set of health questions.
If you are healthy and need more than funeral money, such as leaving money to a spouse, a larger life insurance policy may fit better. If your goal is to help pay for the funeral and final bills, burial insurance is designed for that.
Do I need burial insurance if I have life insurance?
Maybe not. Before you add burial insurance, find your existing life insurance policy and check these points:
- How much does it pay? Compare it with the cost of the funeral you want. See funeral costs.
- When does it end? If it is term life, find the end date.
- Is it through your job? Group life insurance from an employer often ends or shrinks when you retire or leave. Ask your employer or plan.
- Have you borrowed against it? Loans on a whole life insurance policy reduce what is paid if not repaid.
- Who is the beneficiary? Make sure it is still the right person.
If your current life insurance lasts your whole life and pays enough, you may not need burial insurance too. For more, see does life insurance cover funeral costs?.
Pros and cons of burial insurance vs. life insurance
| Burial insurance | Term or larger life insurance | |
|---|---|---|
| Pros | Lasts for life; approval usually based on health questions; fixed premium; available at older ages | Much larger benefit; lower cost per dollar of coverage for healthy, younger buyers |
| Cons | Small benefit; higher cost per dollar of coverage; guaranteed issue has a waiting period | Term life insurance can end before you die; often a detailed health review; harder to qualify for at older ages |
Some people keep a larger life insurance policy for a spouse and add a small burial insurance policy for funeral costs. That can work, but check first whether the life insurance you have is already enough.
Which one fits you, and who each is not for
- Burial insurance may fit if you are older, want lifelong coverage, and only need enough for a funeral and final bills.
- Term life insurance may fit if you are younger and need a large amount for a set number of years.
- Larger whole life insurance may fit if you are healthy and want lifelong coverage for more than final costs.
Burial insurance is not right for you if you already have savings or lifelong life insurance large enough to pay for a funeral, or if you need a large benefit to support someone. Term life insurance is not a good fit for funeral planning if it may end before you die. See is burial insurance worth it?.
What to ask a Licensed Insurance Agent
- Based on my health, could I qualify for a larger life insurance policy, or is burial insurance the better fit for my goals?
- Does this policy last for life, or does it end at any age?
- Can my existing term life insurance be converted to whole life insurance?
- Is the premium level for life? Is there a waiting period?
You can request more information and talk with a Licensed Insurance Agent, use the coverage calculator, or read how to compare final expense insurance companies.
Common questions
Is burial insurance the same as life insurance?
No. Burial insurance is a specific type of life insurance: a small whole life insurance policy meant for final costs. It is not the same as term life insurance or larger whole life insurance. The benefit is paid in cash to your beneficiary, who can use it for the funeral or anything else. What sets it apart is the small benefit and approval that is usually based on health questions.
How do term life insurance and final expense insurance compare for seniors?
It depends on your goal. Term life insurance ends after a set number of years and can be harder to qualify for at older ages. Final expense insurance lasts for life, which matches the goal of helping pay for a funeral. Term life insurance may still make sense if you need a large amount for a limited time.
Can I have both life insurance and burial insurance?
Yes. Some people keep a larger life insurance policy for their spouse and add a small burial insurance policy for funeral costs. First, check whether the life insurance you already have is enough, when it ends, and who the beneficiary is. Two policies mean two premiums, so make sure the second one fills a real gap.
How do the costs of burial insurance and life insurance compare?
Burial insurance usually has a lower monthly premium than larger life insurance because the benefit is small. Per dollar of coverage, larger life insurance policies usually cost less, especially at younger ages and in good health. The right comparison is the total cost for the coverage you actually need. See what affects the cost.
How long does it take burial insurance to pay a claim?
Payout time depends on the company and on having the needed paperwork, such as a certified death certificate and a claim form. Smaller policies may involve less paperwork, but there is no set rule. Claims made in the first two years can take longer because the insurer may review the application.
Does life insurance from work cover my funeral?
It might, while you work there. Group life insurance through an employer often ends or is reduced when you retire or leave. Some plans let you convert or keep coverage. Ask your employer or benefits office what happens to your coverage when you retire.
Is final expense insurance the same as whole life insurance?
Final expense insurance is a kind of whole life insurance, but a smaller one. Both last for life if premiums are paid, and both build cash value. Final expense insurance keeps the benefit small, meant for final costs, and usually uses a short list of health questions. A larger whole life insurance policy often involves a more detailed health review.
What happens if I outlive my term life insurance?
When the term ends, coverage stops and no benefit is paid. Term life insurance usually has no cash value, so you do not get the premiums back. Before it ends, check whether you can renew it, usually at a higher premium, or convert it to a permanent policy during the conversion period.