Burial insurance, also called final expense insurance, is a type of life insurance policy that covers final expenses, including burial and funeral costs. Major advantages of this policy are that premiums do not increase and death benefits do not diminish after securing the policy or reaching a certain age. A burial insurance plan can be comforting for those worried about funeral costs. Here are a few other things to know before buying burial insurance:

1. Cost
Burial insurance is much more affordable than regular life insurance policies. To put things in perspective, for coverage of $10,000 (average cost of funeral being $7,000–$8,000), the monthly premium can be anywhere between $50–$200, which is much lower than other policies. Further, the premium amount is unlikely to increase at any point in time, making it a stable financial cover even if the income reduces after retirement. 

2. Age determines the premium cost
The policyholder’s age is among the main factors influencing the premium amount. So, it is better to buy the policy at an early age to avoid paying a high premium amount.

3. Types of burial insurance
It is important to choose the right type of policy based on individual needs. Burial insurance is broadly classified into the following three types:

Simplified issue burial insurance: Here, insurers evaluate the policyholder’s health status based on his/her health history. Sometimes, the policy may be denied due to certain pre-existing health conditions or risky activities.

Guaranteed issue burial insurance: In this type of policy, insurers cannot deny coverage to individuals even if they are dealing with health conditions.

Pre-need insurance: These policies are offered by funeral homes, so one may approach a funeral home where they would like to have their last rites performed and contract with the home for the services one would like to avail of. The funeral director then sends one a pre-need insurance plan.

4. Insurers may allow borrowing against the policy
Burial insurance plans allow policyholders to borrow against the tax-deferred dividend amount of their burial insurance policy. This allows one to have an easily accessible line of credit during emergencies.