Burial insurance?

Basically, it’s the same thing as whole life insurance with a clever marketing spin.

Basically, “burial insurance” is a form of “whole life insurance”…which is kind of obvious when you think about it, since “whole life insurance” covers you for your whole life and gee, what happens when your whole life is over?

Yeah, you got it: Burial.

Just for contrast, the two most common forms of life insurance are “whole life” and “term.”

Obviously whole life covers you for your “whole life”; “term” life insurance, on the other hand, is only for a certain number of years or “term” of your life.

If you don’t die during the term of the policy, you get nothing. That’s why “term” is usually the cheapest form of life insurance you can buy, but it may not be what you really need.

Bottom line:

Life insurance is complicated, that’s why you should check out PM’s separate coverage of it here.

Sometimes burial insurance is not a bad idea, but it’s not always the best idea to cover the cost of your funeral and burial.

Here are some other options to consider thanks to Forbes:

Burial insurance:

• Purchased from a life insurance company
• Your beneficiary receives the payout and can spend it how they choose
• If you move, your beneficiary has the flexibility to pay for a funeral in a different state

Preneed funeral insurance:

• Purchased from a funeral home
• Funeral options are chosen and paid to a funeral home ahead of time
• Difficult to make changes if locked into a contract
• Your plan may not be “portable,” meaning you won’t be able to take it to another state

Payable on death (POD) account: A POD account lets you put money aside for a funeral and you name who can access the money when you pass away. A POD account is a good way to avoid having the funeral funds tied up in probate. Your beneficiary cannot access the money while you’re alive, but you can withdraw (or add) money to the account at any time. POD accounts are also called “Totten Trusts.”

Funeral trusts: This is an agreement where you can set aside money for a funeral and name a trustee. The trustee can withdraw from the account to pay for your funeral after you pass away.

Trusts: In this agreement, a trust owns the life insurance policy. When you pass away, the trustee makes the claim and the money is distributed according to the wishes you outlined in the trust documents.

Savings account: You can use a regular savings account to pay for a funeral, but the money could be tied up in probate (unlike a POD account). You may be able to avoid this problem by adding a beneficiary to a joint savings account, but keep in mind that they will have full access to the account while you’re alive.

Investopedia recommends:

NOTE TO RYAN: Need affiliate links below

AAA Life Insurance Company
AARP Easy Acceptance Life Insurance
Colonial Penn
Fidelity Life
Foresters Financial
Gerber Life Insurance
Globe Life
Mutual of Omaha

Caring.com recommends:

NOTE TO RYAN: Need affiliate links below

AIG with TZ Insurance
Colonial Penn
Gerber Life
New York Life through AARP
State Farm
Transamerica

NerdWallet recommends:

NOTE TO RYAN: Need affiliate links below

AARP/New York Life
AIG
Colonial Penn
Foresters Financial
Mutual of Omaha
State Farm
Transamerica