AT IBUSA, we specialize in helping find life insurance for seniors.
So, whether you need a lot of coverage, or just a little to cover final expenses, we can help direct you to the best company, with the best policy, based on your specific needs and wants.
The following article provides tips geared towards helping seniors find burial insurance. If you are looking for a little more than to cover a burial and final expenses, please check out our guides or simply search by category.
Best Burial Insurance For Seniors
The best burial insurance company is going to be the one that fits your specific needs and goals. Further, the best company for you will be one that you can qualify for, based on your unique health and lifestyle.
At IBUSA, we work with the top burial insurance companies in the U.S. And more importantly, we understand the subtle nuances of each company, and when a specific company is going to be a better fit than another.
So, when you are considering who the best burial insurance company is, remember that is it very case specific, based on your uniqueness.
Here are some of the best burial insurance companies we work with. Feel free to click the company logo to be taken to that specific company review.
Burial Insurance for Seniors
Many seniors no longer need the same level of life insurance coverage they carried during their prime working years.
As dependents become established in their own careers, income replacement for the care of loved ones becomes less of a concern.
But even though you may no longer need the same death benefit, there are still plenty of very good reasons to consider burial life insurance throughout your retirement years.
If most of your assets are non-liquid (think real estate), you may need a source of ready cash in your estate to cover legal fees, administrative costs, taxes, and any estate debts. Or, it may be as simple as wanting to leave behind a cash for your loved ones.
For nearly all seniors, final expenses represent a significant, though frequently overlooked, drain on estate liquidity.
The costs associated with burial and funeral arrangements are considerable, and neglecting to account for them in an estate plan can be a momentous oversight.
Burial insurance for seniors is life insurance designed to cover precisely those costs.
Although affordable life insurance generally gets harder to obtain as you grow older, most seniors can qualify for a burial insurance policy sufficient to cover funeral and burial costs and protect loved ones from a major out-of-pocket outlay.
Best Burial Insurance Rates
What is Burial Insurance for Seniors?
Burial insurance is a specialized form of whole life insurance for seniors that is designed to cover “final expenses” like funeral and burial costs.
In exchange for regular premium payments during life, the life insurance company, upon the insured person’s death, distributes the policy proceeds to the policy’s beneficiary, who then uses the funds to pay funeral and burial costs and similar debts of the estate.
Because these are small whole life insurance policies, the premiums and benefit amounts for the best burial insurance policies are fixed—meaning both the payments and eventual payout are guaranteed to remain the same for the duration of the policy.
The only way the premiums for a fixed burial insurance policy might change is if the policy stays in place long enough to become “paid up,” at which point no more premiums are owed at all. Otherwise, burial insurance premiums are more or less set in stone.
This stability is particularly important for senior citizens, many of whom live on fixed incomes. Certainty about monthly expenditures for insurance premiums (or any other expenditures) makes budgeting on a fixed income much easier.
Whole Life vs Term Life
To function as intended, a burial insurance policy must be whole life insurance or similar permanent coverage.
Term policies are occasionally marketed as burial or funeral insurance, but there’s no guaranty that a term policy will still be effective when death actually occurs.
At the end of a term life policy’s initial coverage period, the insurance company is free to choose not to renew the policy for another term or to increase premiums to the point of unaffordability.
If term coverage lapses, the policy won’t pay any death benefit, and the premiums are effectively lost.
The risk of non-renewal is especially concerning for seniors, who are much more likely to see a non-renewal or major premium increase at the end of a term policy’s initial coverage period.
As cash value whole life insurance, though, burial insurance for seniors is guaranteed to pay out as long as the policy doesn’t lapse due to non-payment of premiums.
So, if your objective is to provide a surefire source of cash to pay burial and funeral expenses, you need a burial insurance policy guaranteed to stay in place for life—not for a finite term.
Burial Insurance vs Funeral Insurance
Burial or funeral insurance and “final expense insurance” are, practically speaking, the same thing—whole life insurance policies intended to provide seniors a source of estate liquidity.
Because burial and funeral costs are usually lower than “final expenses” (because final expenses include burial and funeral costs), “final expense” coverage customarily has a higher death benefit. But that is just a matter of semantics and not a legal distinction.
How does Burial Insurance for Seniors Work?
A burial insurance policyholder makes periodic, fixed premium payments to the life insurance company during the lifetime of the insured person.
The policyholder (who “owns” the policy and is responsible for paying premiums) is often the person whose life is insured (or, “the insured”), but that is not mandatory, as long as the policyholder has an “insurable interest” in the insured and his or her consent.
Actual premium amounts are determined based on the insured’s age, sex, health status, and desired benefit level.
Though premiums are higher for older applicants, many seniors can still purchase a burial policy with a payout sufficient to pay for cremation and a modest memorial service for as little as $20 per month, particularly if the applicant is in good health.
Even after age 80, healthy applicants can often obtain a burial insurance policy for less than $100 per month—especially if the applicant is female.
“Graded-premium” policies are an exception to the general rule that burial insurance policies available for seniors have fixed premiums. These are typically term policies that have increasing premiums every five years.
For those policies, premiums begin relatively lower but are subject to increase within certain parameters as the insured ages.
Graded-premium policies make sense for some people, but for seniors the predictability of fixed premiums is usually a better option.
Cash Value Growth
An additional perk of burial insurance is that, like ordinary whole life coverage, policies accrue cash value that gradually increases.
While surrendering a burial insurance policy for cash would defeat the purpose (because the proceeds are then not available for burial expenses), a policy’s cash value can serve as a source for a low-interest loan from the insurer.
For seniors on a fixed income, a loan against a policy’s cash value can be a sensible source of cash in an emergency.
The borrowed amount can either be paid back over time or, if the loan remains outstanding when the policy is triggered, the loan balance is simply deducted from the policy proceeds.
Burial Insurance Proceeds
Burial insurance is, at its core, life insurance. And, as life insurance, a burial insurance policy for seniors pays out to the policy’s designated beneficiary—usually the insured person’s estate or a family member or close friend who will be involved in the estate administration process.
If the proceeds are paid into the estate, the estate’s executor has the responsibility to apply the funds toward burial and memorial service costs, which are treated as priority debts of the estate in most states.
If the beneficiary is a family member or friend, it is his or her responsibility.
Any policy proceeds left over after paying the decedent’s final expenses can be applied toward other debts of the estate, such as taxes or healthcare bills.
Or, if the estate doesn’t have any other debts or has other cash on hand to pay them, the surplus funds are distributed to estate heirs or remain in the possession of the policy beneficiary.
Not Taxable Income
Burial insurance proceeds do not qualify as taxable income to the beneficiary or on the insured’s final income tax return. If an estate is large enough, the proceeds may be subject to estate taxes, though estate-planning strategies are available for minimizing or avoiding estate tax liability.
Consider Naming Someone Responsible
Notably, burial insurance policy proceeds do not come with formal “strings attached” relating to use of the funds. Although an estate executor has a fiduciary duty to use estate funds in the best interest of the estate and the decedent’s heirs—and to honor the decedent’s wishes—a third-party beneficiary has much more discretion.
For this reason, seniors who name a family member or friend as beneficiary of a burial insurance policy should be sure to select someone who can be counted on to use the funds as intended.
With that said, if a decedent insured did not have any specific intentions as to how policy proceeds would be used, a beneficiary can treat the funds the same as any other life insurance proceeds.
The “Waiting Period.”
Most burial insurance policies, specifically graded benefit and guaranteed issue policies, include a “waiting period,” which is a typically two-year period (sometimes three) before the entire policy proceeds become fully available.
If a policy is triggered during the applicable waiting period, the pay-out amount will be measured as either the total of all premiums paid to date plus interest or, if it is a “graded benefit” policy, a defined percentage of the policy’s coverage limits.
“Immediate coverage” policies that don’t have a waiting period are available from many insurers, though an immediate coverage policy typically requires more medical screening and has higher premiums.
Immediate issue burial insurance policies can be a good choice for seniors who are in relatively good health, can afford the increased premiums, and who want the certainty of immediate coverage to be part of their estate plans.
Burial and Funeral Expenses.
The costs associated with funeral services and disposition of a decedent’s final remains—whether through burial or cremation—are substantially higher than most individuals initially expect.
And there are a lot of costs to consider. Embalming fees, the purchase price for a casket or urn, burial vault, gravesite marker, and cemetery space may all need to be figured into the final price tag. A funeral, viewing, and/or memorial service also come with numerous associated expenses.
After all is said and done, even relatively spartan arrangements are likely to run a few thousand dollars, and more comprehensive arrangements with larger services cost tens of thousands.
Absent burial insurance or a comparable prearrangement, these expenses will either need to be paid from a decedent’s estate or out-of-pocket by loved ones.
Because total funeral and burial costs vary significantly from person to person, life insurance companies offer burial insurance policies available to elderly applicants with a wide range of coverage levels.
As you would probably expect, greater coverage amounts require higher premiums, all things being equal.
Most companies’ available limits on burial insurance for seniors range from around $3,000 to $30,000, though burial policies up to $50,000 or more are not unheard-of. Some insurers have lower coverage caps for new applicants above a specific age (often 80), see life insurance for seniors over 80.
Consider Two Policies
Seniors who wish to obtain funeral or burial insurance coverage in excess of a favored insurance company’s applicable cap can do so by simply purchasing a second policy through another company.
A multiple-policy strategy can also provide a means of obtaining the protection of immediate coverage through a moderately sized policy in tandem with a larger policy with a waiting period (and the lower premiums that come with it).
Burial Insurance for Seniors as Protection for Loved Ones.
When a reliable source of cash is available for burial and funeral expenses, there’s no risk that loved ones will end up having to pay the expenses out of pocket.
Even an estate with considerable assets needs to either prepare for final expenses or risk being forced to liquidate other assets to cover the costs.
Burial insurance avoids a scenario in which loved ones have to acquiesce to the sale of assets they would have preferred to keep intact, lose a significant portion of their cash inheritance, or foot the bill for a large financial obligation while still in the grieving process.
Availability of Burial Insurance to Seniors.
In general, life insurance becomes harder to come by as you get older. Burial insurance, though, is intended as an affordable alternative that seniors can qualify for.
The policies have simplified underwriting and usually don’t require a physical or other medical examination—just an application with demographic and medical-history information.
For seniors who might otherwise be ineligible for life insurance due to a pre-existing condition, “guaranteed acceptance” burial insurance policies are available from many insurers.
Guaranteed-acceptance (or “guaranteed issue”) policies don’t require medical screening, and virtually all applicants qualify for coverage—including seniors with existing ailments.
Premiums are higher, and guaranteed acceptance policies are not available without at least some waiting period.
But, if your age or medical history might otherwise prevent you from obtaining life insurance, a guaranteed-issue burial policy lets you obtain life insurance for the eventual benefit of your loved ones or your estate.
Whole Life Benefits
Burial insurance policies come with the advantages normally associated with whole life insurance. The policies are guaranteed for life, accrue cash value that’s protected from creditor attachment, receive favorable tax treatment, and ensure estate liquidity.
The distinction that makes burial insurance especially attractive is that it is available and affordable for most seniors who might otherwise have a difficult time qualifying for life insurance coverage.
An experienced life insurance planning professional can help you decide if burial insurance for seniors would be a good component of your estate plan.
How We Can Help
At IBUSA, we work with the top final expense and burial insurance companies. Our goal is to help you find the right policy, with the right company, at the right price.
We do this by understanding what you need and then using our many years of experience to align you with the company that best fits your criteria.
So, when you’re ready, our team of top life insurance agents are waiting to help you in any way we can.