Burial insurance is the same as final expense insurance — a small whole-life policy ($5,000–$25,000) that pays your beneficiary in cash, fast, when you pass away. They can use it for the funeral, burial plot, headstone, medical bills, or anything else.
Level vs. graded benefit
There are two main flavors of burial insurance. Knowing the difference protects you and your family.
Level benefit — Pays the full coverage amount from day one, no matter the cause of death. Requires answering a short health questionnaire.
Graded benefit (guaranteed acceptance) — No health questions. If you pass away from natural causes in the first 2 years, the policy refunds premiums plus 10% interest instead of the full benefit. Accidental death is still covered in full from day one.
What it covers
Funeral service, casket, and visitation
Burial plot, vault, and headstone — or cremation
Outstanding medical bills
Probate fees and small debts
Anything else your beneficiary needs the money for