A burial insurance policy is an insurance policy that helps pay some or all of the costs involved in a burial, notes the Insurance Information Institute. In most states, a burial insurance policy is just a whole life insurance policy that comes with a death benefit. The death benefit may be as little as $5,000 or as much as $25,000, with the proceeds intended to help cover a loved one's final costs.
Burial insurance policies have nominal costs and may be paid monthly or even weekly, notes the Insurance Information Institute. Some insurers require the policy purchaser to answer a few health-related questions to determine policy rates. Some may require a medical exam prior to issuing the policy; others may not. For instance, a man in his thirties may pay more for burial insurance than a parent pays for a child's burial policy.
In some locations, state law allows funeral homes to sell burial insurance if licensed insurance agents are on staff. Inversely, some funeral homes allow for prepaid funerals. In this type of arrangement, a person prepays for funeral services and sometimes selects their own casket and burial plots prior to death, making small payments on the funeral or paying for it in full.