Burial insurance cost

The short answer

Burial insurance is priced per thousand dollars of cover, and the price of that thousand is set almost entirely by how likely the carrier thinks it is to pay out soon. That means age does most of the work. A woman buying $10,000 of cover at 50 pays a fraction of what the same woman pays if she waits until 75, and nothing about that gap is negotiable once the birthday has passed.

Three things about the price surprise people. The first is that it never rises after issue, because these are whole life policies with a level premium. The second is that men pay noticeably more than women at every age, because the mortality tables say so. The third is that two perfectly reputable carriers will quote the same person figures a third apart on the same afternoon, and both of them are pricing correctly according to their own rules.

• Age at issue is the single biggest lever, and it only moves one way.
• The premium is locked for life once the policy is in force.
• Health answers decide which of three price tiers you land in.
• Tobacco use can roughly double the figure.
• Shopping more than one carrier is worth more than any other saving on this page.

Cost by age and sex

The table shows an illustrative monthly range for a $10,000 level benefit policy for a non-tobacco applicant in reasonable health. The low end of each range is roughly what a competitively priced carrier offers. The high end is roughly what the same person is quoted by a carrier that prices the same health answers less generously, which in this market is commonly a third higher.

Illustrative ranges only, shown to give a sense of scale. They are not quotes, they are not carrier specific, and no rate is fixed until an application has been approved and issued. Your own figure depends on age, sex, tobacco use, your answers to the health questions and the state you live in.

Read down the female column and the shape of the product becomes obvious. The premium roughly doubles between 50 and 65, and doubles again between 65 and 80. Every year of waiting has a price, and unlike almost everything else in personal finance it is a price you can see in advance.

What moves the price

Underwriting a small whole life policy is a short list of questions, and each one maps fairly directly onto the premium.

Notice what is missing from that list. Your credit score does not price a burial insurance policy, your income does not, and neither does the reason you are buying it. Agents cannot discount a filed rate either, so anyone offering a special price is describing a different product rather than a better deal.

How the face amount changes the premium

Cover scales close to proportionally, with one wrinkle. Almost every policy carries a small fixed policy fee inside the premium, so a $5,000 policy costs a little more than half of a $10,000 one. The table below takes the age 65 range from further up the page and scales it, purely to show the shape.

Illustrative scaling of the age 65 figures above, for a non-tobacco female applicant at the low end and a male applicant at the high end. Not a quote and not carrier specific.

The practical point is that buying too little rarely saves much. Going from $10,000 to $15,000 of cover is a difference of a few tens of dollars a month, while the gap between a $10,000 policy and a burial that commonly lands near $15,395 once the cemetery has billed is a difference a family has to find in cash within a week. Work out the number you need before you shop the price. How much burial insurance you actually need walks through it, and the calculator on the home page does the arithmetic for your own state.

Why carriers quote so differently

Every carrier writes its own health questions and its own list of conditions it will accept at the best rate. Those lists are genuinely different. One company treats a heart procedure five years ago as ancient history and offers a level policy. Another treats the same event as a decline. A third offers a graded policy at a higher price. Nobody is wrong, they are simply pricing different books of business.

That is why the spread in the first table exists, and why the single most valuable thing an applicant can do is have more than one carrier consider the same set of answers. An agent who only ever quotes one company is not comparing anything. An agent who can place the same application with several is doing the only part of this job that changes the price.

Tobacco, and what counts as tobacco

Tobacco is the one lifestyle question that carries a real price. Most carriers define it as any nicotine product in the last twelve months, which sweeps in cigars, pipes, chewing tobacco, patches, gum and in many cases vaping. The rate difference is usually large enough that a smoker of 60 pays something close to what a non-smoker of 70 pays.

Answer the question honestly anyway. Nicotine is one of the few things a carrier can and does test for if it decides to investigate a claim inside the contestability window, which is normally the first two years. A saved premium is not worth a denied claim at the moment the family needs the money.

What a waiting period costs you

The three underwriting tiers are priced in ascending order. A level benefit policy pays in full from day one and costs the least. A graded policy pays a reduced amount in the first two years and costs more. A guaranteed issue policy asks no health questions at all, pays nothing for natural death in the first two years beyond a refund of premiums plus interest, covers accidental death from the first day, and costs the most of the three.

The mistake to avoid is paying guaranteed issue prices for a body that would have qualified for level rates. Controlled high blood pressure, controlled diabetes, high cholesterol, arthritis and a cancer that has been clear for several years are all routinely written at level rates. Who qualifies for day one cover goes through the health questions one by one, and guaranteed acceptance explains the narrow group who genuinely need the third tier.

What you pay over twenty years

A policy bought at 65 in the middle of the range above costs roughly $720 a year, so about $14,400 across twenty years of payments. If the policy pays $10,000, that is still a favourable trade for most families, and it is a far better trade if the claim comes earlier than expected, which is the case insurance exists for.

Over a long enough life almost any policy pays in more than it pays out. That is true of car insurance and home insurance too, and it is the wrong way to judge any of them. The question worth asking is whether your family could produce $8,300 within a week of a death without the policy. For most households the honest answer is no, and the full cost breakdown shows why the number is larger than people expect.

Lowering the cost without lowering the cover

• Apply now rather than next year, because the rate is set by your age on the issue date and never resets.
• Have more than one carrier look at the same health answers before you sign anything.
• Answer the health questions carefully rather than defensively, since volunteering a condition you do not have moves you into a worse tier for no reason.
• Pay by monthly bank draft, which is normally cheaper than card or quarterly billing.
• Consider cremation honestly. A cremation with a service averages $6,280 and a direct cremation about $2,202, so the cover needed is much smaller.
• Buy a premium you can pay for the rest of your life, because a lapsed policy returns very little and leaves nothing behind.

One saving that is not real is buying a smaller policy than the funeral you actually want. The gap does not disappear, it simply moves onto a family member during the worst week of their life. Final expense insurance covers the product in full if you want the wider view first.