Introduced by the ancient Greeks and Romans in the form of membership dues in “benevolent societies,” burial insurance is one of the oldest types of insurance. It is paid out to the policyholder’s beneficiary(ies) upon the policyholder’s death in order to cover final expenses, such as the cost of a funeral but also debts and probate administration.
Unlike life insurance, burial insurance does not usually require the policyholder to undergo a medical exam. But like some types of life insurance, a policyholder can borrow from the cash value of his or her burial insurance policy, although burial insurance policies usually have a lower monetary value than life insurance policies; burial insurance policies normally have a ceiling of $100,000, and most are for less than $50,000.
While burial insurance premiums (payments) can be more expensive than those of some types of life insurance, the premiums are normally guaranteed to stay at the same rate until the policyholder reaches age 100. This, of course, means that, with current life expectancies, most policyholders will have, in effect, their burial insurance premiums guaranteed at the same rate for life.