What Is Funeral Insurance? Definition

Why it matters

Funeral insurance can be confused with a prepaid funeral plan. A life insurance policy pays the beneficiary, who then pays the funeral provider. A prepaid plan is a contract with a funeral home. The FTC Funeral Rule gives consumers the right to get itemized price lists and to choose only the goods and services they want. Comparing funeral home prices and life insurance quotes helps families plan. Features and limits differ by carrier and state.

Source: consumer.ftc.gov

Related terms

Final Expense Insurance: Final expense insurance is a small whole life policy designed to pay for funeral costs, burial or cremation, and related end-of-life bills. Face amounts are modest, and it is often sold to seniors without a medical exam.
Burial Insurance: Burial insurance is a common name for small whole life policies that pay for burial, funeral, and related costs. The term is used the same way as final expense insurance. The benefit goes to a named beneficiary.
Pre-Need Insurance: Pre-need insurance is a policy or contract sold through a funeral home to pay for specific funeral goods and services chosen in advance. The benefit usually goes to the funeral provider, not to the family.
Funeral Costs: Funeral costs are the expenses for a funeral or other final arrangements, such as services, a casket or urn, a burial plot or cremation, and transport. Prices vary widely by provider and location.
Pre-Need Funeral Contract: A pre-need funeral contract is an agreement to pay for funeral goods and services in advance. The money may be held in a trust or backed by an insurance policy.

All 241 terms

Why it matters

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