Helping to Cover Funeral Costs with Life Insurance

Underwritten by United of Omaha Life Insurance Company

10.07.2026 | 8 min read

What are the average funeral costs today?

Funeral expenses can vary widely depending on location, personal preferences and whether burial or cremation is chosen. However, even modest services can be costly.

According to the National Funeral Directors Association, the national median cost of a funeral with a viewing and burial in the U.S. was about $8,300 in 2023. When a required burial vault is included, the total median expense rises to roughly $9,995.¹ These figures do not include additional expenses such as cemetery plots, headstones, flowers, obituaries or transportation costs.

Cremation is often viewed as a lower-cost alternative, but it still comes with significant expenses. A funeral with viewing and cremation typically costs several thousand dollars, especially if a memorial service or reception is included. For families without advance planning, these costs can arrive suddenly and at an emotionally vulnerable moment.

Planning for funeral expenses matters. Relying on savings alone can disrupt long-term financial goals, while using credit cards or loans may leave survivors with lingering debt. Life insurance can help address this gap by providing funds when they’re needed most.

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How life insurance can help cover funeral expenses

Life insurance pays a death benefit to named beneficiaries upon the insured person’s death. That money can be used for any purpose, including funeral and burial expenses. Unlike some restricted benefit programs, life insurance proceeds are flexible and generally paid directly to beneficiaries rather than to funeral homes.

This flexibility allows families to:

Help pay funeral and burial costs promptly
Help cover related end-of-life expenses, such as medical bills
Avoid dipping into emergency savings or retirement accounts

In many cases, beneficiaries receive funds within days or weeks of filing a claim, depending on the policy and circumstances. That timing can make a big difference when funeral bills arrive.

Understanding the relationship between life insurance and funeral expenses helps families plan proactively rather than scrambling at the last minute to pay funeral costs.

Types of life insurance used for funeral costs

Two main categories of life insurance are commonly used to help cover funeral and final expenses: term life insurance and permanent life insurance.

Each type serves a different purpose, and the right choice depends on your age, health, budget and long-term goals.

Using term life insurance for funeral costs

Term life insurance provides coverage for a specific period, such as 10, 20 or 30 years. If the insured person dies during the term, the beneficiaries receive the death benefit. If the term ends while the insured is still living, coverage expires unless the policy is renewed or converted.

Because term life insurance is typically more budget-friendly than permanent coverage, it can be an effective option for individuals seeking higher coverage at lower premiums. Many people purchase term life insurance to help protect income, cover mortgage payments or provide financial support for dependents. It can also be used to cover funeral costs.

Term life insurance may make sense for funeral planning if:

You’re younger and in good health
You already have term coverage in place
You want coverage during your working years

However, term life insurance is temporary. If your primary goal is to ensure funds are available specifically for funeral expenses later in life, permanent coverage may be a better option.

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Using whole life insurance for funeral and final expenses

Whole life insurance is a type of permanent life insurance designed to last for your entire lifetime, as long as premiums are paid. Unlike term life insurance, whole life insurance does not expire based on age or term length.

This makes whole life insurance a popular option for covering funeral and final expenses. Policies typically feature:

Guaranteed lifetime coverage
Fixed premiums that don’t increase with age
A guaranteed death benefit

Because the coverage is permanent, families can feel confident that funds will be available when they’re needed, regardless of when death occurs.

Whole life insurance can be especially useful when funeral costs are the primary concern rather than income replacement or long-term financial protection.

If your goal is to help ensure funeral and final expenses are covered, no matter when they occur, a whole life insurance policy may be worth considering. United of Omaha Life Insurance Company, a Mutual of Omaha company, offers whole life insurance options designed to provide lifelong protection and predictable premiums.

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What is final expense (burial) insurance?

Final expense insurance, sometimes called burial insurance, is a type of whole life insurance specifically designed to help cover funeral and end-of-life expenses.

These policies typically offer smaller death benefits, often ranging from $2,000 to $25,000, making them more accessible for older adults or those on fixed incomes. Final expense insurance is often easier to qualify for than traditional life insurance and may not require a medical exam.

Final expense insurance may be a good fit if:

You’re a senior focused primarily on funeral costs
You want simplified underwriting
You prefer a smaller, budget-friendly policy

Because these policies are designed for funeral planning, beneficiaries can use the proceeds to cover services, burial or cremation costs, and other related expenses.

Final expense insurance can help ease the financial burden on loved ones by providing funds intended for funeral and burial costs.

How much life insurance do you need for funeral costs?

The amount of life insurance needed to help cover funeral costs depends on several factors, including:

Whether you plan for burial or cremation
The type of service you want
Cemetery and memorial expenses
Outstanding medical bills or debts

A basic funeral may cost several thousand dollars, while more elaborate arrangements can exceed $10,000. Some individuals choose coverage that strictly covers funeral costs, while others include additional funds to help loved ones manage final expenses.

Reviewing local funeral prices and thinking through personal preferences can help you estimate an appropriate coverage amount.

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Choosing the right life insurance for funeral planning

When deciding among term life, whole life and final expense insurance, consider the following:

Your age and health
How long you want coverage to last
Your budget and premium comfort level
Whether funeral costs are your primary concern

Younger individuals may rely on existing term life coverage, while older adults often prefer permanent life insurance that provides a payout as long as the policy remains in force. Final expense insurance can be a practical solution for seniors who want a straightforward way to plan for funeral costs without extensive underwriting.

Taking time to review your life insurance choices and speak with a licensed insurance professional can help you select coverage that aligns with your goals and helps protect the people you care about most.

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