Burial Insurance vs. Life Insurance

If you have been pondering on whether or not to get burial, or life insurance, and want to know the difference between the two, you are in the right place! 

These things can definitely be confusing especially if you don’t have a professional to explain them to you properly. Luckily for you, this article is here to answer all of your questions! So without further ado, let’s get started!

Table of Contents

What is the Difference in Burial and Life Insurance?

This is the big question. However, we have to break it down so that we understand what the two actually are. Then we will look at the differences between the two and you should see a very big difference in the end. Let’s start with Burial Insurance

What is Burial Insurance?

The first thing to know is that no matter what anyone tells you, burial insurance is a form of life insurance. I have heard people say that burial insurance is its own category, but I firmly disagree. 

Burial insurance is designed to pay the beneficiary in the event of the insured passing away. This is what we can agree life insurance is as well. 

However, there is a difference in Burial Insurance and Life insurance. 

Burial insurance is not designed to be a large paying policy to the beneficiary. It is designed to pay amounts of $1,000 to $40,000 and sometimes more, but not much more. The reason for this is so that the beneficiary doesn’t have to worry about having to pay out of pocket for the funeral expenses. 

That is exactly why we call it burial insurance! It does exactly that. It takes the financial burden off of the shoulders of the beneficiary when that time comes. 

What is Life Insurance?

Life insurance, when we are looking at the traditional form of life insurance, is very different than burial insurance. 

With traditional life insurance, we are typically looking at a policy around $100,000+ and they are what is called Whole Life policies. This means that there is no termination to the policy for any reason other than lack of payment. The rate stays the same throughout the insured’s life, and the coverage typically does too. 

With these whole life policies, you also see a growth in what is called Cash Value, which I will get into in a little bit. 

So unlike burial insurance, traditional life insurance has much higher face amounts, or amount of coverage, and they sometimes come with living benefits. 

These living benefits can be accidental death, terminal illness, child riders, you name it. This means that if any of these occur, the client can sometimes receive their benefit amount in order to cope with the issue that has occurred. 

What are the Differences?

The main differences in Burial insurance and Life insurance are

• Cost
• Benefit amount
• Living Benefits
• Use

Let’s go over each one. 

Cost

Typically, people purchase burial insurance from ages 55+. If the same person were to try to get a traditional life insurance policy, it would be astronomically different. 

Like I mentioned before, traditional life insurance policies are $100k+. Burial insurance is $1,000-$40,000. So you can just about guarantee the price will double with the insurance alone. Not counting the living benefits and riders.

Benefit Amount

This is what sets burial insurance apart. The benefit amount is the amount of insurance or payment that the beneficiary receives when the insured passes away. With burial insurance, I typically see my clients getting anywhere from $15,000-$25,000.

Living Benefits

Living benefits mean that the insured can actually see some of the benefit of the policy if something happens. 

For example, some traditional life insurance policies can add on a “terminal illness rider”. This means that if the client was to ever be diagnosed with a terminal condition, they could receive the insurance before their passing. 

You do not see things like this with Burial Insurance. The only riders you typically see are “accidental death” and sometimes a “child” rider. 

Accidental death means if the client were to pass away due to an accident, the beneficiary would be paid the entire policy amount X2. Accidental death will literally double the policy if an accidental death occurs. 

A child rider means that you can add insurance on your children under 18 for a very low premium. 

Use

Lastly, the main difference is use. 

As I mentioned previously, burial insurance is designed to cover a burial. That simple. 

Traditional life insurance is designed to leave a large benefit behind for the family. It can even be used as a retirement in some cases with the structuring of the cash value. 

Conclusion

In conclusion, it is my hope that I have made it clear the differences between burial insurance and standard life insurance. 

They are very similar, but at the end of the day they are very different. 

As always, if you are needing to check pricing on burial insurance, please fill out the form on the right of the screen and see prices instantly! 

If you have any questions please let me know in the comments.

God Bless