Skip to main content
Home LogoHome Skip Navigation

What Is the Difference Between Life Insurance and Funeral Insurance?

Life insurance is a necessity that most people purchase to leave behind a legacy for those they love. But some types of life insurance are designed to address specific things. That’s why it’s important that you understand what is the difference between life insurance and funeral insurance before you decide on your policy.

Here’s what you need to know.

Funeral Insurance vs. Life Insurance

Life insurance needs are different for everyone, and the policy you need depends on your circumstances. For instance, life insurance for parents may be different from life insurance for seniors because the two live different lifestyles. Young parents typically want to ensure that their families can continue to live the same lifestyle as they do now, so they may want to purchase a life insurance policy with a large cash payout. On the other hand, some seniors may opt for funeral insurance or Insurance for Life's Final Moments to cover their burial costs so that their family isn’t burdened with their final expenses.

Here are some of the differences between life insurance and funeral insurance:

Life Insurance:

  • Can be purchased as a permanent or term policy, meaning the policy could be in effect for as little as 10 years or until the policyholder passes.
  • Can accumulate a cash value if it is a permanent life insurance policy.
  • Can pay out in one lump sum or monthly payments.
  • Take some time to pay a claim because it will have to undergo an investigation before payment can be made. That means beneficiaries may have to pay for funeral costs upfront.
  • Can have a death benefit worth millions of dollars. The policyholder decides how much insurance to purchase, depending on their intent for the policy.
  • Requires applicants to undergo a medical exam before determining whether or not to grant an insurance policy.

Funeral Insurance:

  • Can be purchased as permanent life insurance, meaning that it will stay in effect until the policyholder passes.
  • Can accumulate a cash value
  • Pays out in a lump sum
  • Pays as soon as the beneficiary provides proof of death. This ensures that the beneficiary receives the death benefit in time to pay for funeral costs.
  • Offers lower death benefits – typically up to $50,000.
  • Offers no medical exam policies and even some policies that don’t require the applicant to answer medical questions.

What Insurance Plan Should I Get?

The type of life insurance that you get depends on your needs – and the needs of those you will leave behind. To decide on the right policy for you, think about what you want to accomplish with the policy.

Here are some suggestions:

You may need a life insurance policy if:

  • You have a mortgage and want the insurance policy to pay it off.
  • You have kids who are in or are about to begin college, and you want to ensure that the costs are covered.
  • You want to cover your family’s expenses after you pass.
  • You want to use the cash value of your life insurance policy to help you plan for retirement.

You may need a funeral insurance policy if:

  • You only want to leave behind a death benefit that will cover your funeral costs and other final expenses such as car loans and utility payments.
  • You don’t want your loved ones to have to wait for the money to pay your final expenses.
  • You want to build a small cash value with a funeral insurance policy.
  • You don’t want to take a medical exam because you fear your health will prevent you from being approved for other types of life insurance.

What's the Benefit of Getting an Insurance Plan from Lincoln Heritage Life Insurance?

You have many choices when it comes to funeral insurance, but if you’re looking for peace of mind, it pays to purchase your policy from a trusted source. Lincoln Heritage has been in business since 1963 and has the experience and the expertise to make things easier for beneficiaries.

For instance, the Funeral Advantage program from Lincoln Heritage has many benefits that you won’t find with other funeral insurance providers:

  • Claims paid 24 hours after approval
  • A quick one-page application that makes getting approved easier
  • No medical exam
  • Emotional support for beneficiaries
  • Help in finding the right funeral home and burial services

Here’s a comparison of what you will get with Lincoln Heritage as compared to other providers of funeral insurance, also known as burial insurance.

And speaking of affordable monthly rates, here are some charts that will give you an idea of what a funeral insurance policy will cost based on your sex and age:

Monthly Premium Rates for Men*

$5,000 Death Benefit

  Age Determined 'In Good Health' by Insurer No Health Questions Asked
50 $16 $20
55 $19 $24
60 $23 $29
65 $29 $35
70 $38 $44
75 $51 $63
80 $65 $82

* Estimated rates do not reflect the rates of any particular life insurance company.

$10,000 Death Benefit

  Age Determined 'In Good Health' by Insurer No Health Questions Asked
50 $30 $40
55 $35 $46
60 $43 $57
65 $56 $68
70 $74 $88
75 $100 $125
80 $126 $162

* Estimated rates do not reflect the rates of any particular life insurance company.

Monthly Premium Rates for Women*

$5,000 Death Benefit

  Age Determined 'In Good Health' by Insurer No Health Questions Asked
50 $14 $15
55 $16 $18
60 $18 $24
65 $22 $28
70 $28 $35
75 $38 $46
80 $48 $64

* Estimated rates do not reflect the rates of any particular life insurance company.

$10,000 Death Benefit

  Age Determined 'In Good Health' by Insurer No Health Questions Asked
50 $25 $28
55 $28 $36
60 $33 $45
65 $41 $55
70 $53 $69
75 $72 $90
80 $93 $126

* Estimated rates do not reflect the rates of any particular life insurance company.

Are You Ready for a Free Quote for Funeral Insurance?

If you’ve decided that funeral insurance is a better fit for you and your family, you can get a free quote from Lincoln Heritage to help make your decision. Once you have all the facts you need, it’s much easier to make the right decision for you and your loved ones.

MENU