How Does Cremation Insurance Work?

Cremation insurance is a type of final expense life insurance meant to pay for a cremation service and other end-of-life expenses.

Most companies offer coverage between $2,000 and $50,000, and a medical exam is never required. When you die, the insurance policy will pay cash, tax-free, directly to the beneficiaries of your choice. That gives them the necessary funds for your cremation or other final expenses.

Tip:
It’s common to hear cremation insurance, also referred to as “burial insurance,” “funeral insurance,” “end of life insurance,” or “final expense insurance.”

Some policies are “guaranteed issue” with no health questions or underwriting of any kind. Understand that any policy with no health questions will always have a two-year waiting period and a higher cost.

If you die during the waiting period, the life insurance company will only refund your premiums plus a tiny amount of interest.

Plans with health questions cost less and fully insure you with no waiting period (if approved).

That means if you die anytime after the policy starts, the insurance company will pay out the full death benefit.

Cremation policies are a type of whole life insurance, which means the premiums never change, the death benefit will never decrease in value, and the coverage lasts forever.

Since whole life is a type of permanent life insurance plan, it will build cash value that the policyholder may withdraw anytime.

 

What Does Cremation Insurance For Seniors Cover?

Cremation insurance provides a quick cash payout to your loved ones to cover all your cremation and other final costs (the money can be spent on anything), such as:

  • Crematory fees
  • Urn
  • Cremation casket
  • Funeral home fees
  • Medical bills
  • Financial debts

Also, keep in mind that any leftover money does not go to the funeral home or crematory. Your beneficiaries keep all excess funds.

 

The Best Cremation Insurance Policies

If you’re buying any type of life insurance to cover funeral expenses, you’ll get the best deal by working with an independent agency rather than directly with one single insurance provider.

Independent agencies represent multiple senior funeral insurance companies rather than just one.

Captive companies such as State Farm or Lincoln Heritage can not offer you another insurance company.

But independent agents can compare policies from 10-20 insurance companies to find you the best plan.

Tip:
Working with independent agencies such as Choice Mutual is free. Insurance agent services are free, and the insurance doesn’t have a higher rate because you bought via a broker.

If you need cremation insurance, below are the three best companies to consider.

These companies only sell their coverage via licensed agencies. You cannot buy their coverage directly from them.

 

Best for immediate coverage

Mutual of Omaha

Founding Year: 1909
Choice Mutual Rating
5.0
A+
Superior

Choice Mutual’s ratings are determined by our editorial team. The scoring formula considers consumer experience, policy cost, underwriting criteria, the insurer’s financial strength ratings, and complaint data.

AM Best’s Financial Strength Rating (FSR) is an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. The scores range from A++ to D-.

The BBB rating is based on information BBB is able to obtain about the business, including complaints received from the public. BBB seeks and uses information directly from businesses and from public data sources. BBB assigns ratings from A+ (highest) to F (lowest). If a business has been accredited by the BBB, it means BBB has determined that the business meets accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints.

The Complaint Index compares a company’s performance to other companies in the market. The National Complaint Index is always 1.00. That means a company with a complaint index of 2.00 is twice as high as expected in the market. Reported scores are for the most recently available year and for “Individual Life” products.

Product
Details
Policy Type: Whole Life Insurance
New Applicant Age Range: 45-85
2-Year Waiting Period: No (subject to underwriting approval)
Coverage Amount Range: $2,000-$50,000
States Available: All States (except New York)
Product
Benefits
Premiums Stay the Same Forever: Yes
Builds Cash Value: Yes
Policy Duration: Lifetime
Accelerated Death Benefit: This free rider is automatically included. You can access the full death benefit while alive if the insured has a terminal illness or is under nursing home confinement.
Optional Riders: Accidental Death (2X the payout for accidental death)
Application
Details
Where to Apply: Agencies licensed to sell Mutual of Omaha products (you can't buy this plan directly from them)
Phone Number to Apply: 1-800-644-2926
Medical Exam Required: No
Guaranteed Acceptance: No
Application Approval Time: 10 Minutes to 2 Business Days
Common health conditions still eligible for no waiting period coverage:


Aneurysm
Arthritis
Asthma
Blindness
Blood clots > 2 years ago
Blood thinners
Cancer > 4 years ago
Circulatory surgery > 2 years ago
Crohn’s disease
Depression
Diabetes (type 2)
Diverticulitis
Epilepsy
Fibromyalgia
Grave’s disease
Heart attack > 2 years ago
Heart surgery > 2 years ago
Hepatitis A or B
High blood pressure
High cholesterol
Scleroderma
Seizures
Sleep apnea
Squamous/basal cell skin cancer
Stroke/TIA > 2 years ago
Tumors (non-cancerous)

Mutual of Omaha final expense insurance is generally the most affordable cremation insurance on the market. Plus, they have best-in-class financial strength, so you can have peace of mind knowing they can pay your claim when the time comes.

There’s no medical exam, and you won’t find a better deal if you’re eligible for their Living Promise policy (level benefit).

 

 

Best for the elderly

Aetna

Founding Year: 1853
Choice Mutual Rating
4.5
A
Excellent
A+
Not Accredited

Choice Mutual’s ratings are determined by our editorial team. The scoring formula considers consumer experience, policy cost, underwriting criteria, the insurer’s financial strength ratings, and complaint data.

AM Best’s Financial Strength Rating (FSR) is an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. The scores range from A++ to D-.

The BBB rating is based on information BBB is able to obtain about the business, including complaints received from the public. BBB seeks and uses information directly from businesses and from public data sources. BBB assigns ratings from A+ (highest) to F (lowest). If a business has been accredited by the BBB, it means BBB has determined that the business meets accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints.

The Complaint Index compares a company’s performance to other companies in the market. The National Complaint Index is always 1.00. That means a company with a complaint index of 2.00 is twice as high as expected in the market. Reported scores are for the most recently available year and for “Individual Life” products.

Product
Details
Policy Type: Whole Life Insurance
New Applicant Age Range: 40-89
2-Year Waiting Period: No (subject to underwriting approval)
Coverage Amount Range: $2,000-$50,000
(varies by age)
States Available: All States (except New York)
Product
Benefits
Premiums Stay the Same Forever: Yes
Builds Cash Value: Yes
Policy Duration: Lifetime
Accelerated Death Benefit: This free rider is automatically included. You can access the full death benefit while alive if the insured has a terminal illness that is expected to cause death within 12 months.
Optional Riders: Accidental Death
(2X the payout for accidental death)
Application
Details
Where to Apply: Agencies licensed to sell Aetna products
(you can't buy this plan directly from them)
Phone Number to Apply: 1-800-644-2926
Medical Exam Required: No
Guaranteed Acceptance: No
Application Approval Time: 15 Minutes-3 Business Days
Common conditions still eligible for no waiting period coverage:


Afib
Aneurysm (if surgically repaired)
Arthritis
Asthma
Bipolar disorder
Blindness
Blood clots
Blood thinners
Cancer > 2 years ago
Chronic bronchitis
Circulatory surgery > 2 years ago
COPD
Crohn’s disease
Depression
Diabetes (type 1 or 2)
Diabetic coma > 2 years ago
Diverticulitis
Epilepsy
Fibromyalgia
Graves’ disease
Heart attack > 1 year ago
Heart surgery > 1 year ago
Hepatitis > 2 years ago
High blood pressure
High cholesterol
Insulin shock > 2 years ago
Lupus
Multiple sclerosis
Obesity
Over 85 life insurance
Pacemaker (installed > 1 year ago)
Parkinson’s disease
Sarcoidosis
Schizophrenia
Scleroderma
Seizures
Sleep apnea
Squamous/basal cell skin cancer
Stroke/TIA > 1 year ago
Tumors (noncancerous)

Like Mutual of Omaha, Aetna senior products are affordable and accept many health conditions.

Aetna life insurance is likely your best option if you deal with certain chronic illnesses such as COPD.

Additionally, they are excellent at providing life insurance to seniors over 80. They are one of the few companies that will accept a new applicant as old as 89.

If you need life insurance for an elderly parent, Aetna is a great company to investigate.

 

 

Best for low coverage amounts

Transamerica

Founding Year: 1904
Choice Mutual Rating
4.0
A
Excellent
A
Not Accredited

Choice Mutual’s ratings are determined by our editorial team. The scoring formula considers consumer experience, policy cost, underwriting criteria, the insurer’s financial strength ratings, and complaint data.

AM Best’s Financial Strength Rating (FSR) is an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. The scores range from A++ to D-.

The BBB rating is based on information BBB is able to obtain about the business, including complaints received from the public. BBB seeks and uses information directly from businesses and from public data sources. BBB assigns ratings from A+ (highest) to F (lowest). If a business has been accredited by the BBB, it means BBB has determined that the business meets accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints.

The Complaint Index compares a company’s performance to other companies in the market. The National Complaint Index is always 1.00. That means a company with a complaint index of 2.00 is twice as high as expected in the market. Reported scores are for the most recently available year and for “Individual Life” products.

Product
Details
Policy Type: Whole Life Insurance
New Applicant Age Range: 45-85
2-Year Waiting Period: No (subject to underwriting approval)
Coverage Amount Range: $1,000-$50,000 (varies by age)
States Available: All States
Product
Benefits
Premiums Stay the Same Forever: Yes
Builds Cash Value: Yes
Policy Duration: Lifetime
Accelerated Death Benefit: This free rider is automatically included. You can access the full death benefit while alive if the insured has a terminal illness that is expected to cause death within 12 months.
Optional Riders: Accidental Death (2X the payout for accidental death)
Application
Details
Where to Apply: Agencies licensed to sell Transamerica products (you can't buy this plan directly from them)
Phone Number to Apply: 1-800-644-2926
Medical Exam Required: No
Guaranteed Acceptance: No
Application Approval Time: 15 Minutes- 5 Business Days
Common conditions still eligible for no waiting period coverage:


Afib
Angina (chest pains)
Aneurysm (if surgically repaired)
Arthritis
Asthma
Bipolar disorder
Blindness
Blood clots
Blood thinners
Cancer > 4 years ago
Chronic bronchitis
Circulatory surgery > 1 year ago
COPD
Crohn’s disease
Depression
Diabetes (type 2)
Diverticulitis
Epilepsy
Fibromyalgia
Grave’s disease
Heart attack > 1 year ago
Heart surgery > 1 year ago
Hepatitis
High blood pressure
High cholesterol
Kidney disease
Lupus
Multiple sclerosis
Pacemaker (installed > 1 year ago)
Parkinson’s disease
Schizophrenia
Scleroderma
Seizures
Sleep apnea
Squamous/basal cell skin cancer
Stroke/TIA > 1 year ago
Tumors

Transamerica offers some of the lowest-cost burial life insurance for seniors over 70 and 75.

Also, they’re very accepting of people who have high-risk health conditions like angina, COPD, and Parkinson’s, to name a few.

They are one of the best funeral insurance companies due to their low prices and competitive underwriting.

 

How Much Do Cremation Final Expense Policies Cost?

A cremation final expense insurance policy will usually cost between $25-$75 monthly, depending on your gender, age, health, tobacco history, and the amount of insurance coverage you want.

That said, below are some sample cremation insurance rates (monthly premiums) for various ages.

Age$2,000$3,000$4,000$5,000$10,000
45F: $7.08
M: $7.99
F: $9.02
M: $10.38
F: $10.96
M: $12.77
F: $12.91
M: $15.16
F: $22.61
M: $27.11
50F: $7.42
M: $8.70
F: $9.53
M: $11.45
F: $11.64
M: $14.19
F: $13.75
M: $16.94
F: $24.31
M: $30.68
55F: $8.10
M: $9.75
F: $10.55
M: $13.03
F: $13.00
M: $16.30
F: $15.45
M: $19.58
F: $27.71
M: $35.95
60F: $9.14
M: $11.32
F: $12.10
M: $15.37
F: $15.07
M: $19.43
F: $18.04
M: $23.48
F: $32.87
M: $43.76
65F: $10.77
M: $13.86
F: $14.55
M: $19.19
F: $18.33
M: $24.51
F: $22.11
M: $29.84
F: $41.01
M: $56.48
70F: $13.21
M: $17.48
F: $18.21
M: $24.63
F: $23.22
M: $31.77
F: $28.22
M: $38.91
F: $53.24
M: $74.61
75F: $17.05
M: $22.56
F: $23.97
M: $32.23
F: $30.89
M: $41.91
F: $37.81
M: $51.59
F: $72.41
M: $99.97
80F: $22.25
M: $30.51
F: $31.77
M: $44.16
F: $41.30
M: $57.81
F: $50.82
M: $71.47
F: $98.43
M: $139.73
85F: $29.74
M: $41.11
F: $43.01
M: $60.06
F: $56.28
M: $79.02
F: $69.55
M: $97.97
F: $135.90
M: $192.74
86F: $37.06
M: $50.05
F: $53.85
M: $73.32
F: $70.63
M: $96.60
F: $87.41
M: $119.87
F: $171.32
M: $236.25
87F: $43.99
M: $58.13
F: $64.24
M: $85.45
F: $84.49
M: $112.77
F: $104.74
M: $140.09
F: $205.97
M: $276.67
88F: $50.92
M: $66.22
F: $74.64
M: $97.58
F: $98.35
M: $128.94
F: $122.06
M: $160.30
F: $240.62
M: $317.10
89F: $57.85
M: $74.30
F: $85.03
M: $109.71
F: $112.21
M: $145.11
F: $139.39
M: $180.51
F: $275.27
M: $357.52

 

Popular Insurance Companies To Avoid

Despite ample advertising to convince you that these companies are the best, they are anything but.

Don’t be misled by their clever marketing.

 

AARP

Choice Mutual Rating
2.5

Choice Mutual’s ratings are determined by our editorial team. The scoring formula considers consumer experience, policy cost, underwriting criteria, the insurer’s financial strength ratings, and complaint data.

The AARP life insurance program via New York Life has two significant drawbacks.

First, their underwriting is strict, so most seniors will not qualify for their no waiting period coverage.

AARP will generally respond to most seniors by offering their guaranteed acceptance coverage, which is expensive and has a two-year waiting period.

But even for healthy seniors, AARP final expense coverage is much more costly than that of most other providers.

 

Colonial Penn

Choice Mutual Rating
1.0

Choice Mutual’s ratings are determined by our editorial team. The scoring formula considers consumer experience, policy cost, underwriting criteria, the insurer’s financial strength ratings, and complaint data.

First, the advertisements featuring Jonathan Lawson for their $9.95 plan are incredibly misleading.

When you look at a Colonial Penn rate chart, you quickly learn that $9.95 buys a tiny coverage amount.

For example, a 70-year-old male would only have $689 of life insurance for $9.95 monthly.

In addition to their expensive coverage, Colonial Penn has a two-year waiting period for everyone.

 

Lincoln Heritage

Choice Mutual Rating
1.0

Choice Mutual’s ratings are determined by our editorial team. The scoring formula considers consumer experience, policy cost, underwriting criteria, the insurer’s financial strength ratings, and complaint data.

Lincoln Heritage assumes you won’t read the fine print or ask questions about their advertising claims.

They don’t plan a funeral for you or guarantee they will save you money on funeral costs.

What is objectively true is that Lincoln Heritage can be 20-300% more expensive than other final expense insurance companies.

 

Globe Life

Choice Mutual Rating
2.0

Choice Mutual’s ratings are determined by our editorial team. The scoring formula considers consumer experience, policy cost, underwriting criteria, the insurer’s financial strength ratings, and complaint data.

Globe Life Insurance Company is particularly heinous because they push a term life insurance policy to cover funeral expenses.

Their policy will increase in cost every five years and expires once you turn 80 or 90 years old (varies by state).

The final drawback to Globe Life is the underwriting, which is very stringent. They are essentially looking only for extremely healthy applicants.

If you have ongoing health issues, don’t expect Globe Life to approve your application.

 

How Much Does Cremation Cost?

On average, a cremation plan with a service costs $6,280, which includes a viewing. However, a direct cremation (aka “low-cost cremation”), which has no funeral services, costs about $2,183.

With direct cremation, you’re basically only paying for the cremation process and a container for the ashes.

Whether you have a memorial service or not, you can reduce or increase the cost depending on your final wishes.

For example, there are multiple types of cremation (with varying costs). There are also different types of cremation caskets.

It’s undoubtedly true that the cost of cremation is less than the cost of a funeral with a burial.

The average traditional funeral with a burial, embalming, and viewing costs $9,995.

A bar chart comparing the cost of various burial and cremation types.

 

No matter your preferences, funeral costs are expensive (especially if you want a traditional burial). That’s why exercising proper funeral planning is essential to ensure your final expenses don’t burden your family members.

You can make one single pre-payment, buy cremation life insurance, or make installments on a prepaid cremation.

If you’re unsure how much a cremation will cost, you can always use a cost calculator or meet with a funeral director. They can give you specific prices for whatever pre-planning services interest you.

 

Frequently Asked Questions

The best way to buy a cremation insurance policy is from an insurance broker who represents numerous insurance companies. They can compare insurance quotes from many providers to find you the best policy. Alternatively, some insurance companies sell their products directly to the consumer. For example, Colonial Penn and Globe Life deal directly with consumers rather than relying on agents to sell their life insurance policies.

Purchasing cremation insurance is only worth it if you otherwise cannot pay for your cremation and other final expenses. One significant value of a cremation policy is that the payout money does not have to be used only for cremation costs. In addition to ensuring your funeral costs won’t become a financial burden, the funds can also be used for medical bills, debts, or anything else.

A pre-paid cremation is a funeral plan you fully design at a local funeral home. You can either pay it off in one lump sum or make monthly payments over 1-10 years. In contrast, cremation insurance is a very small life insurance policy that does not define your funeral preferences. A cremation policy only pays cash to your loved ones so they can pay for your funeral.

Life insurance proceeds can be used to pay for a funeral. That means your beneficiaries can use the money for cremation costs or anything else. Plus, any leftover money they don’t use for funeral bills is theirs to keep and use as they see fit.

To file a claim for a cremation policy, the beneficiary must call the insurance company. The insurance provider will require a copy of the death certificate and have the beneficiary sign a form certifying their identity. The payout time for a final expense is typically a few business days once a claim is approved.