How Does Burial Insurance Work?

by Contributing Writer ; Updated July 27, 2017

What is Burial Insurance?

Burial insurance covers your funeral expenses, such as mortuary expenses, a headstone, casket and a cemetery plot. It also covers other final expenses such as paying off debt, the cost of administering probate and medical bills. You buy the policy, pay the premiums, and the benefit is paid to your beneficiary when you die.

How Does it Work?

You choose a plan and a premium you can afford. Burial insurance premiums stay the same throughout the plan's life and pay out when you die. The plan accumulates funds similar to a savings plan. If the policyholder has the plan for years, there can be quite a bit left over after funeral expenses. There are a few key differences between burial insurance and life insurance.

What are the differences?

The differences between burial and life insurance start with underwriting. A medical exam is not usually needed. The premiums don't increase and the benefit doesn't decrease. Like some types of life insurance, a burial-insurance policyholder can borrow from the cash value of the policy.

Where do I find it?

There are many places to find burial insurance online. Most will give a quote within 24 hours and have agents that can help you over the phone. Burial insurance can be inexpensive compared with life insurance and can be purchased in an amount appropriate for your situation.