Understanding Funeral Insurance and Their Pros and Cons


Funeral insurances are whole life insurance policies that offer a small death benefit and are relatively easy to approve. Funeral insurances are also called final expense insurance, burial insurance, or modified whole life insurance. All these terms relate to small whole-life policies with a face value and death benefit of $2,000 to $30,000.

There’s not much difference between funeral insurance and life expenses, other than the fact that the insurers sell the smaller funeral insurance policies to make them more affordable. Funeral insurances have a death benefit meant to cover the funeral expenses such as funeral service, embalming, casket, or cremation. However, beneficiaries can use that fund for anything, from paying off property debts to vacation.

If you are planning a funeral but are struggling for the money, you might want to look into loans for funeral expenses to help you out. There are many options available that can provide you with the funds quickly for the services.

How does funeral insurance work?

Funeral insurances are a kind of whole life insurance. Once you have insurance, the premiums can’t increase and the death benefits can’t decrease. Unlike a term policy, a whole-life policy won’t expire when you get to a certain age.

A whole-life policy accumulates cash value that you can borrow against during your life. If you have any unpaid loans when you die, the money your beneficiaries receive will reduce slightly to cover your unpaid loans.

When you apply for funeral insurance, you won’t have to deal with medical exams or let the insurance company have access to your medical history. But you will have to answer some of their questions. These questions will decide your fate because not everyone qualifies for a policy with coverage that starts from day one.

As with any other insurance policy, the premiums for the funeral insurance depend on your age and health and at some places, where the law states it, they might also depend on your gender.

The less healthy and older you are, the higher your interest rates will be for a given amount of insurance. Men tend to pay higher rates than women because they have shorter average life expectancy.

Some insurance companies issue funeral insurance policies to people from birth to 85 of age. However, depending on the insurer and the policy, there may be a minimum and maximum age criteria for when you can apply.

Pros of funeral insurance

  • Funeral insurance policies are affordable.
  • They are easy to qualify for. Only requires some answers to medical questions but no medical exam.
  • The premiums will never increase while the death benefits won’t reduce unless you decide to request quicker death benefits during your life or borrow against the face value.
  • The beneficiaries can use the funds for anything, including property taxes.
  • Death benefits are guaranteed as long as you pay the premiums and you don’t have a term policy.
  • Death benefits are not taxable.
  • You can purchase an insurance policy with a death benefit of typically $35,000 or less.
  • Policies are accessible to applicants with poor health.



  • The policy face value amounts are lower than other types of insurance and might not cover all expenses related to a funeral.
  • These can be more expensive that other kinds of insurance policies because of the easy health qualification.
  • Some insurance companies can provide misleading or incomplete information to lure people.
  • Some policies have a waiting period, which insurers may find ambiguous.
  • If you live long enough, the total premium you pay could actually exceed the death benefits.


Funeral expenses can provide significant payouts to loved ones after your death. The funds can be used to pay for various services they wish to hold such as memorials or viewing ceremonies. These are easy to qualify for and are relatively affordable compared to other insurance policies. The coverage amounts can range from $2,000 to $35,000. Even if you receive an amount on the lower scale, it would still be significant to your family members who will be dealing with the funeral expenses after your passing. We hope this helps you understand how funeral insurances work and whether you need one.