Burial insurance is a type of insurance that often gets confused with other forms of insurance, such as funeral insurance, and even life insurance. If this is a subject that’s confusing you, we’re going to show you what it covers and what you’re going to get should you decide to take out this type of insurance.

Burial Insurance in a Nutshell

In a nutshell, burial insurance is there to take care of your final expenses. This may include things like cremation cost, burial plot, services and left over bills in some cases. It’s a type of coverage that’s going to cover the costs of burying your loved one. Often, it may be incorporated into a comprehensive funeral insurance plan.

The Lump Sum Issue

We should say that burial insurance isn’t like life insurance in that if you die you’ll receive a sum of money to cover the costs of the funeral or the burial. You will have to pay for everything and then claim on the insurance. Burial insurance is about pre-paying for the ceremony before you die.

The only situation where you may receive a lump sum is if you take out a policy designed for terminally ill people and the insurance holder dies soon after the policy is taken out. In this case, the insurer will have facilities in place for simply returning your premiums to you, as opposed to paying out death benefits.

What it covers in Detail

The Burial – The burial ceremony will be covered as part of this policy. This will include everything from lowering the casket into the grave to the religious figure who delivers the final sermon.

Real Estate – A burial involves taking up a piece of real estate. This is where a significant amount of the cost of a funeral comes from.

The Funeral – Many policies will also include any expenses to do with the funeral. You should check to make sure this is the case with your policy so you don’t get any nasty surprises later on.

Expiry Date

Burial insurance doesn’t expire. If you take out this policy when you’re 60 and you live to be a hundred, the policy will still be there waiting for you. You can only cash it out when you die. It also just pays for your final expenses. The number of options you have are extremely limited.

What about Cash Value?

Cash value is a facility that comes with lots of insurance types. The cash value of something is the accumulated cash value built over a period of time. In other words, it gives you the option to use your policy to either invest or to cash out entirely. Life insurance is one such example of this type of policy.

The cash value of your burial insurance doesn’t exist. It’s impossible to accumulate any cash value. The amount your policy covers is the amount you’ll get to cover the costs of burial and nothing else.

Conclusion

Burial insurance is a policy providing no flexibility at all. That makes it a much simpler policy to deal with. You know exactly what you’ll get the moment you take out your policy.