Reference
Burial insurance glossary
The words you will hear from insurers, funeral homes and Licensed Insurance Agents, explained in plain English.
- Accidental death benefit
- A payment made when death results from an accident as the policy defines it. Many graded and guaranteed issue policies pay the full benefit for accidental death even during their waiting period. Learn more
- Alternative container
- An unfinished wood box or other non-metal container used for cremation instead of a casket. Under the FTC Funeral Rule, funeral homes that offer direct cremation must make one available. Learn more
- Beneficiary
- The person or organization you name to receive the policy payout when the insured person dies. You can usually change your beneficiary at any time unless the designation is irrevocable. Learn more
- Burial insurance
- A common name for a small whole life insurance policy meant to pay funeral and final expenses. It is the same kind of product as final expense insurance. Learn more
- Cash value
- A savings component that builds slowly inside a whole life policy. You may be able to borrow against it or receive it if you cancel, depending on the policy. Learn more
- Certified death certificate
- An official copy of a death certificate issued by a vital records office or through the funeral home. Insurers, banks and government agencies usually require certified copies. Learn more
- Contestability period
- A window, commonly the first two years, during which an insurer can review and possibly deny a claim if the application left out or misstated information. Learn more
- Cremation insurance
- A burial or final expense policy bought with cremation costs in mind. It works the same way; the beneficiary decides how the money is used. Learn more
- Death benefit
- The amount the policy pays to the beneficiary when the insured person dies, often called the face amount.
- Direct cremation
- Cremation shortly after death without embalming, viewing or a funeral service beforehand. It is usually the lowest-priced option a funeral home lists. Learn more
- Final expense insurance
- A whole life insurance policy with a smaller death benefit, intended to cover funeral costs, medical bills and other expenses left at death. Learn more
- Free look period
- A period after you receive a new policy, set by state law, when you can cancel for a full refund of premiums paid.
- General Price List (GPL)
- The itemized list of goods and services a funeral home must give you when you ask about arrangements in person, under the FTC Funeral Rule. Learn more
- Grace period
- Extra time after a missed premium due date, commonly about 30 days, during which the policy stays in force before it can lapse.
- Graded death benefit
- A policy feature that pays a reduced amount, often a return of premiums plus interest, if death from natural causes happens in the first years of coverage. Learn more
- Guaranteed issue
- Coverage you cannot be turned down for because of health. There are no health questions, so these policies usually have a waiting period and higher premiums for the coverage amount. Learn more
- Insurable interest
- A real financial or family stake in someone staying alive. You generally need insurable interest, and the person's consent, to buy a policy on someone else. Learn more
- Insured
- The person whose life the policy covers. The insured, the owner and the beneficiary can be different people.
- Irrevocable assignment
- A transfer of all or part of a policy's payout to a funeral home or other party that cannot be undone without their agreement. Often used with preneed plans. Learn more
- Lapse
- When a policy ends because premiums were not paid by the end of the grace period.
- Level death benefit
- Full coverage from the first day the policy is in force for any covered cause, with no waiting period. Usually requires answering health questions. Learn more
- Licensed Insurance Agent
- A person licensed by a state insurance department to sell insurance in that state. You can look up a license on your state insurance department's website. Learn more
- Modified whole life
- A policy with a reduced benefit or different premium in its first years, similar to graded coverage. Terms vary by insurer. Learn more
- Owner
- The person who controls the policy: pays premiums, names the beneficiary and can make changes. Often the same as the insured, but not always. Learn more
- Preneed insurance
- A policy sold through a funeral home to pay for a specific funeral arranged in advance. It is tied to that funeral home's goods and services. Learn more
- Rider
- An optional add-on to a policy that changes or adds benefits, such as an accelerated death benefit for terminal illness.
- Simplified issue
- Coverage approved based on your answers to a short set of health questions. Your answers decide whether you qualify for level or graded coverage. Learn more
- Term life insurance
- Coverage for a set number of years. It costs less per dollar of coverage but can end before death, which matters when the goal is funeral costs. Learn more
- Waiting period
- The time, often two years, before a graded or guaranteed issue policy pays the full benefit for death from natural causes. Learn more
- Whole life insurance
- Permanent coverage that lasts for your whole life as long as premiums are paid. Burial and final expense policies are small whole life policies. Learn more
Definitions describe common usage. Policy terms vary by insurer and state; your policy documents control.