Burial insurance is a small whole life policy for the funeral and last bills, and it lasts for life. Term life insurance is a larger policy for a set number of years, to replace pay or clear a mortgage. Many seniors only need burial insurance. Younger families with debts usually need term.
Burial insurance vs Term life insurance at a glance
| Burial insurance | Term life insurance | |
|---|---|---|
| Size | Small. Triple-I gives a range of $5,000 to $25,000. | Large. Often $100,000 to $1,000,000 or more. |
| How long it lasts | For life, as long as you pay. It is a type of whole life. | A set time, like 10, 20 or 30 years. It pays nothing if you outlive it. |
| Cost per $1,000 | Higher. You pay more for each $1,000 because the policy is small, lasts for life and is easy to get. | Lower. Term is usually the least money for each $1,000 of coverage. |
| Medical exam | Usually none. A few health questions, or none on guaranteed issue plans. | Sometimes. Larger amounts and older ages often need more checks. |
| Waiting period | Some plans with few or no health questions pay a smaller amount in the first 2 or 3 years. | Full payout from day one, after the normal contestable rules. |
| Who it fits | Seniors who want the funeral paid for, and people whose health makes a large policy hard to get. | People with kids, a mortgage or a paycheck their family needs, usually under 65. |
| Ages | Often sold from about 50 to 85. | Texas says most insurers sell term only up to about age 70 or 80. |
What to know
Both are life insurance. Both pay money to the person you name when you die. The difference is size, length and the job each one is built to do.
Burial insurance, also called final expense insurance, is a small whole life policy. Triple-I describes it as often $5,000 to $25,000. Washington's insurance office says final expense, burial policies and senior life insurance are names for the same small policies that cover or prepay funeral costs. Because it is whole life, it lasts for life as long as you pay, and the price is set when you buy.
Term life insurance covers you for a set time, like 10, 20 or 30 years. It is usually the cheapest way to buy a large amount of coverage. It is built to replace pay while kids grow up, or to clear a mortgage if you die. If you are still alive when the term ends, the policy ends and pays nothing. Texas says most companies sell term only up to about age 70 or 80, and the price rises with age.
Price works differently. Per $1,000 of coverage, burial insurance costs more. You are paying for a small policy that is easy to get and lasts for life. Term costs less per $1,000, but you buy far more of it, and it ends.
Health checks differ too. Many burial plans ask only a few yes or no health questions, and guaranteed issue plans ask none. Term life often asks more, and larger amounts can need a medical exam or records from your doctor.
Watch the early years on burial insurance. New York says some senior plans pay only premiums back, or a small graded amount, in the first two or three years. Plans that ask health questions often pay the full amount from day one. Texas also warns that over many years, total premiums can add up to more than the benefit, so compare the price to the payout.
Some people want both. A 60 year old with a mortgage may keep a term policy for the loan and add a small burial policy that lasts after the term ends. A 75 year old with no debts may only need burial insurance.
The national median funeral with viewing and burial was $8,300 in 2023, and $6,280 with cremation, per the NFDA. If the funeral and a few bills are all you want covered, burial insurance sized to that number is often enough. If your family would lose your pay, term life is usually the better fit.
- You are older and want coverage that never runs out.
- You only need enough for the funeral and last bills.
- Your health makes a large policy with an exam hard to get.
- Your family needs your pay, or you have a mortgage.
- Your need ends at a known time, like when kids are grown.
- You are healthy and want the most coverage for each dollar.
Common questions
Is burial insurance a type of life insurance?
Yes. It is a small whole life policy. It pays cash to the person you name, who can use it for the funeral or anything else.
Which is cheaper, burial insurance or term life?
Term life costs less for each $1,000 of coverage. Burial insurance costs less in total each month only because the amount is much smaller.
Can I have both?
Yes. Some people keep term life for a mortgage or income and add a small burial policy that lasts for life.
What happens when my term life ends?
It stops and pays nothing if you are still alive. Some term policies let you convert to permanent coverage before a set age. Ask your company.