People sometimes buy both without realizing they do similar jobs. Here's the difference.
Side by side
| Burial (final expense) insurance | Pre-paid funeral plan | |
|---|---|---|
| Who gets the money | The person you choose | The funeral home |
| What it pays for | Anything: funeral, bills, debts | The services in the contract |
| If you move | Coverage goes with you | Depends on the contract |
| Covers other bills | Yes | Usually not |
| Locks in funeral prices | No | Often, for what's in the contract |
When a pre-paid plan makes sense
If you know exactly what you want, plan to stay in the area, and want the details settled with one funeral home, a pre-paid plan can give peace of mind.
When burial insurance makes sense
If you want your family to have flexibility, might move, or want coverage for final medical bills and debts too, burial insurance is usually the better fit.
Questions to ask before signing a pre-paid plan
- What exactly is included, and what isn't?
- Can I cancel, and would I get a refund?
- Can I transfer it if I move, or to another funeral home?
- What happens if the funeral home closes or is sold?
- Where is my money held until it's needed?
Rules for pre-paid plans vary by state, so get the answers in writing.
Can you have both?
Yes. Some people pre-pay the funeral and keep a small policy for final bills. Just make sure you're not paying twice for the same thing.
Watch: final expense, explained
How burial (final expense) insurance works and who it fits. Under 4 minutes.
Not sure which fits your family?
On a free call I'll explain both, look at what you already have, and compare final expense plans from several companies.
Common questions
What is the difference between burial insurance and a pre-paid funeral plan?
A pre-paid plan pays a funeral home ahead of time for specific services. Burial insurance pays cash to the person you choose, who can use it however they need.
Is burial insurance the same as final expense insurance?
Yes, the names are used for the same kind of small whole life policy.
What happens to a pre-paid funeral plan if I move?
It depends on the contract. Ask whether it can be transferred or refunded before you sign.
Can I have both?
Yes. Some people pre-pay the funeral and keep a small policy for final bills and debts.
Nick Brown is an independent life insurance agent with NJN Insurance, licensed in Arizona (License 19720244). He compares plans from several companies and explains them clearly. NJN stands for Not Just a Number.