History

• Burial insurance is a new idea, and low-cost burial insurance is even newer. In times past, family members paid for funerals out of their own funds when a loved one died. As people began to live longer, they decided to take care of their own funeral expenses as the strain on families became greater. Low-cost burial insurance is something available now to people in middle-age to avoid putting this burden on their children, who likely have young families.
  
  

Considerations

• Burial insurance goes by several other names, including funeral insurance and end-of-life insurance. In many ways, burial insurance acts as a small life insurance policy to help cover the expenses associated with a funeral. Various policies offer certain services, and reading through the fine print is the best way to make sure you are getting a quality policy. Understand the amount to be paid out upon death and how long the payment takes to arrive, since those questions are crucial for the families.
  
  

Misconceptions

• People often confuse burial insurance with prepaying for a funeral. Though the two ideas are similar, they are not the same thing. The majority of burial insurance policies allow for people to pay small amounts into a plan as premiums and then to receive a cash payout upon the death of the person, with the expectation that the money goes to funeral expenses. Prepaying means setting up an account with a funeral home and purchasing everything needed beforehand so that there are no arrangements to be made before death.
  
  

Benefits

• Low-cost burial insurance has two primary benefits. The first is that by securing a policy earlier to get a lower rate, people pay less through their premiums rather than waiting. The second, and larger, benefit to low-cost burial insurance is that people can take the decision-making burden from their family members, which helps in situations where a death is sudden or where bickering may happen following a death.
  
  

Warning

• Check out the low-cost burial insurance company you use. Some companies are not as financially solvent as others, and as with all insurance or investment firms, an unstable company that goes bankrupt leaves the purchaser of the low-cost burial insurance without any recourse to recover premiums. Check with your state insurance commission to see how long the company has been around, and make inquiries of friends.