Burial Insurance Terms in Plain English: A Senior-Friendly Glossary

A small whole life policy, usually $5,000 to $50,000, designed to cover a funeral and the bills someone leaves behind. The two names mean the same thing.

Coverage that lasts your whole life. The price never goes up, the coverage never shrinks, and it cannot expire as long as you pay the premium. Almost all burial insurance is whole life.

Coverage that only lasts a set number of years or stops at a certain age. It is cheaper at first but can run out exactly when you need it. Be careful: some TV-advertised senior policies are actually term.

The amount you pay, usually monthly, to keep the policy active.

The dollar amount your family receives when you pass away. A $15,000 policy has a $15,000 face amount.

The person you choose to receive the money. You can name more than one, and you can change them at any time for free.

How the company decides whether to approve you and at what price. For burial insurance this is usually just health questions, no medical exam.

A policy with a short list of health questions and no exam. Most day-one burial insurance works this way.

A policy with no health questions at all. Nobody is turned down within the age range. The trade-off: it costs more and has a waiting period.

Full coverage from the first day the policy starts. If you can qualify for this, take it. It is cheaper and pays in full immediately.

Partial protection in the early years. A typical graded plan pays a portion of the face amount in years one and two, then the full amount after that.

Similar to graded: if you pass away in the first two years from natural causes, your family typically gets your premiums back plus interest instead of the face amount. Accidents are usually covered in full from day one.

The two-year window on guaranteed issue, graded, and modified plans before the full benefit applies. Day-one (level) policies have no waiting period.

The day your coverage actually starts, usually the day your first payment is processed, not the day you applied.

Your legal right to cancel a brand-new policy, usually within 10 to 30 days, and get every penny back. No questions asked.

The first two years, when the company can review your application if you pass away. Claims are only denied when the application was not answered truthfully, which is why I always say: answer honestly.

What happens when premiums stop being paid: the policy ends and the money paid in is gone. The most common reason families collect nothing.

A small savings component that builds inside a whole life policy over time. You can borrow against it, but its real job is keeping your coverage permanent.

An optional add-on. The most common is an accidental death rider, which pays extra if death results from an accident.

A report-card grade for an insurance company’s financial strength. Look for A- or better. Every carrier I recommend carries a strong rating.

Some TV and mail-order companies sell coverage in units instead of dollar amounts. A unit means less coverage the older you are, which hides the real price. Always ask: how many dollars of coverage, and what is the monthly cost?

A contract bought directly from a funeral home for their services. Unlike burial insurance, the money is locked to that funeral home. Only consider it if the contract is guaranteed and transferable.

Every licensed agent’s federal ID number. Ask for it and verify it. Mine is 8895251, and I publish it on every page of this site.