Tag Archives: burial expenses

The Importance of Budgeting Your Burial Costs

Talk to any life insurance sales representatives and they are likely to tell you that the number one reason for purchasing life insurance is to make sure all of your end-of-life expenses are covered. This is a very good reason, indeed. It is difficult enough on family members when a loved one passes away without having to burden them with the additional worries of paying for things such as the funeral and burial. Some people choose to cover those costs with burial insurance.

Burial insurance is a kind of life insurance that people purchase for the sole purpose of paying for things such as funeral services, a casket, a headstone, and a burial plot. The limited scope of burial insurance is such that policies rarely exceed $35,000 or so. The average policy is actually quite a bit less. The question is how do you know how much insurance you should buy? That question can be answered by budgeting your burial costs.

Buy Your Plot

The first step in budgeting your burial costs is to look into buying your plot. Obviously, buying now means you will incur the expense right away. However, you can most likely work out a deal with your local cemetery to put a down payment on your plot and then make installment payments thereafter. Any balance left on the plot when you die could be covered by your burial insurance.

If you do not want to buy your plot now, you can at least visit the local cemetery and find out what the going prices are. Also inquire as to how much the cost of a plot tends to rise year-to-year. The business office can likely provide you with a history and a cost estimate for five, 10 or even 20 years down the road. This will help you come up with a budget number for your eventual plot purchase.

Price the Remainder of Your Expenses

Once you have the question of your burial plots settled, it is time to start thinking about the remainder of your end-of-life expenses. This is a good time to sit down with a funeral director and ask questions. You might even talk with several local funeral directors for the purposes of comparing prices. It may sound morbid, but comparing funeral and burial expenses is a good way to save money.


You are going to want to price all sorts of things including wakes, graveside or funeral home services, caskets, flowers, etc. Again, all of these costs do tend to go up from one year to the next, so what you are really looking for is current prices and estimates for five, 10, and 20 years down the road. Pricing all of the products and services you might be interested in will quickly give you an idea of how costly funerals and burials can be.

Purchasing Insurance

The last step in budgeting your burial costs is to determine approximately how much you want to spend to cover end-of-life expenses. This will tell you how much burial insurance to purchase. For example, if you are looking for a top-of-the-line funeral and burial that could run $20,000 or more, look at a policy that will pay out $30,000. This will give you some extra room for inevitable cost increases.

Keep in mind that burial insurance is a financial tool rather than an investment. This is important to remember because the policy will not pay any more 20 years down the road than it would pay today. You could very well end up with costs greater than the value of your policy if you do not plan well. Moreover, even if you do plan well, there is no guarantee funerals will not be significantly more expensive when you eventually pass.

Budgeting for your burial costs is intended to provide the estimates you need for adequate financial planning. Nevertheless, a budget is never guaranteed. If you plan to purchase burial insurance, sit down and budget your burial costs first. Doing so will give you an idea of how much insurance to purchase.

Three Groups of People Who Benefit from Burial Insurance

If you are like most people, you dread the thought of having an insurance sales representative show up at your door or call you on the phone. The thought of having to refuse to buy a policy, despite the sales representative’s hard-sell tactics, can be enough to get you agitated just thinking about it. The reality is, not every insurance policy is something you should purchase. Some types of insurance are right for you; others are not.

Burial insurance is a good example of this point. It is a great financial tool for certain groups of people who want a little extra financial protection relating to covering their final expenses. It is not a good tool for others. Knowing whether it is right for you comes down to knowing your financial position and your expectations for the future.

Here are three groups of people who tend to benefit from burial insurance:

1. Seniors without Life Insurance

Believe it or not, purchasing life insurance is no longer the foregone conclusion it used to be. There are plenty of seniors today who, for whatever reason, never chose to purchase whole or term life. Yet now they are over the age of 60 and beginning to consider their own mortality. Because of their age, whole or term life may no longer be either practical or affordable. Burial insurance is a good option for them.

Burial insurance provides a way to pay for their funeral and burial expenses so that family members are not burdened with those costs. At the same time, it is very affordable for almost every consumer. There is actually no good reason for seniors in this group to not have burial insurance if they can afford it.


2. Working Couples

Today’s working couples may find there are other things they want to put their money into rather than life insurance. For example, saving up 15% to 20% for a down payment on a home can be quite a financial endeavor. These young couples do not necessarily need to replace lost income in the event one of them dies, so a term or whole life policy may be overkill for their circumstances.

Once again, burial insurance provides a way to cover those end-of-life costs at a very affordable price. The couple can choose a very good policy that does not cost a lot, thereby enabling them to put as much money away for a down payment as possible. They may consider term or whole life after they purchase their home and begin raising a family.

3. Those without Investments

In a perfect world, everyone would be involved in several different kinds of investments in order to secure their retirement and pay their end-of-life expenses. Nevertheless, this is not a perfect world. There are many American households that simply cannot afford to invest. Yet it does not change the fact that the passing of a family member will cost a significant amount of money.

Purchasing burial insurance will certainly not provide a retirement nest egg or make one independently wealthy. However, it will relieve surviving family members of the expenses related to burying a lost love one. Better yet, it is an affordable way to cover those expenses.

It is true that burial insurance is not an investment. It is also true that it is not a type of insurance that is right for everyone. Nonetheless, for those who can benefit from it, burial insurance can make a big difference at the time of one’s passing. If you have any questions about burial insurance, contact your insurance agent or an estate planner for help. Qualified and experienced professionals can answer your questions and explain how burial insurance could be an important component in your end-of-life financial plans.