Thinking about your burial and final expense life insurance can be an unsettling. But as we get older, we realize it will happen to us all eventually. Burials have become increasingly complex as well as expensive. A typical burial and other final expenses can easily cost several thousands of dollars. This can be a financial burden for a family at a time of death. In addition, there is the added burden of making final arrangements and choosing burial options. Many people have found that by choosing burial insurance, they can relieve their family of the financial burdens as well as decide how they want their funeral conducted. In addition, making sure that the insurance policy will also cover any final expenses can greatly a family through a stressful time. There are three main types of burial insurance, but choosing the right one or even if want one depends on your needs.

Term life insurance with a friend as a beneficiary

final expsense life insuranceThe traditional method to support pay for a funeral is to take out a small life insurance policy and designate the beneficiary as a member of the family or friend. They would have specific instructions to use the money to arrange the funeral. This method allows for the most flexibility in terms of the arrangements, but requires faith that the beneficiary would follow the deceased wishes. In addition, any remaining amount after the funeral can be kept by the beneficiary or to pay for other final expenses. However, there is no way to guarantee the price of the funeral will be less than the payout amount or that the beneficiary will follow the deceased wishes.

Term life insurance with a funeral director as a beneficiary

Another form of burial insurance is to have a life insurance policy with the beneficiary as the funeral director. The director will have instructions on how to spend the money for the funeral. These agreements typically indicate that all of the money is to be spent and that no money ever goes directly to the family. This method is one of the best ways to make sure that the deceased wishes were honored, if but following through with the instructions costs more than the policy payout then the family has to the remaining costs.

Pre-need contract


A third type of burial insurance is a pre-need contract with a funeral home or trust. The deceased is essentially pre-paying for the burial. Items that can be paid for include paying for the plot, grave marker, casket etc. The prices are pre-set at the time of the contract so that there should be no need for a family to make up any differences. The deceased can also specify how the funeral will be conducted and relieve family work of organizing the funeral. One weakness of this method is that the contracts may be only for specific sites or funeral homes which may be a problem if the deceased has relocated away from the funeral home. Unlike term life insurance policies, some of these agreements can be revoked.

Tip: A simple non-insurance alternative is to create a special bank account that is money specifically set aside for a funeral. An executor would have to be named to carry out the wishes.


  • All documentation made for insurance should stored in a safe place be easily accessible to family members.
  • Laws regarding burial insurance will vary by state, so check with your locality before making any commitments.