Final Expense and Funeral Glossary

Funeral homes, cemeteries and insurance companies all have their own vocabulary, and most of it is used in front of families who are hearing it for the first time on one of the worst weeks of their lives. This is a plain-English list of the words you are most likely to meet — on a price list, in an application, or in a conversation with an agent — with links to the pages that go into each one properly.

Two things to keep in mind. These definitions describe how terms are generally used, but the ones that bind you are printed in your own policy schedule and on the funeral home's or cemetery's written price list. If a company defines a word differently, its definition is the one that governs your contract, and you are entitled to ask for it in writing.

If a term you were quoted is not here, or is being used in a way that does not match what you read below, that is worth a question rather than an assumption.

Jump to: A · B · C · D · E · F · G · I · L · M · N · O · P · R · S · U · V · W

A

Accelerated death benefit

A rider that lets the insured person take part of the death benefit early after a qualifying diagnosis, most often a terminal illness and sometimes confinement to a nursing home. Whatever is paid early is subtracted from what the beneficiary receives later. Not every small policy includes one, and the triggering conditions are narrower than the name suggests, so read the rider rather than the brochure.

Accidental death benefit

Coverage that pays when death results from an accident. It appears in two places in this market: as an extra amount added on top of the face amount, and as the portion of a graded benefit policy that is fully covered from the first day. Accident definitions are specific and usually exclude things like intoxication, so the exact wording matters if you are counting on it.

Alternative container

An unfinished wood, cardboard or composite box used in place of a casket, most often for cremation. Under the FTC Funeral Rule a funeral home cannot require you to buy a casket for a direct cremation and must make an alternative container available. It is one of the largest single savings on a cremation bill.

B

Basic services fee

The non-declinable charge a funeral home applies to every arrangement for its overhead and the director's time: planning, permits, paperwork, sheltering the body and coordinating with the cemetery or crematory. It appears near the top of the General Price List and is often the largest line after the casket. You cannot decline it, even if you buy almost nothing else.

Beneficiary, contingent

The person or people who receive the death benefit if every primary beneficiary has died before the insured. Naming one costs nothing and keeps the money out of the estate, where probate can slow it down and creditors can reach it. It is the most commonly skipped line on an application.

Beneficiary, primary

The person, people or entity first in line to receive the death benefit. The designation on file with the insurance company controls the money and overrides what a will says. Shares have to total 100 percent, and naming a minor usually means the money goes to a guardian or custodian rather than to the child directly.

C

Cash value

The savings element inside a whole life policy, credited at a rate stated in the contract. On a small final expense policy it grows slowly and stays modest for years, so it is never a good reason to buy one. It can be borrowed against, and any loan not repaid is deducted from the death benefit.

Columbarium

A structure of small compartments built to hold cremated remains, indoors or outdoors, at a cemetery, church or memorial garden. Each compartment is a niche and is bought much like a grave, with separate charges for the niche, the front plate or inscription, and the placement. It is usually cheaper than a burial plot but is still a cemetery purchase with its own price list.

Contestability period

The first two years of a policy, or one year in some states, during which the insurer may review the original application if a claim is filed and reduce or refuse payment if an answer was materially wrong. It is not about trivial mistakes; it is about misstatements that would have changed the decision to issue. After it ends, a policy is generally incontestable except for outright fraud, which is part of why claim timing questions come up.

Cremation

Reducing the body to bone fragments and ash using heat, after which the remains are returned to the family in a container they choose. It can be paired with a full service and viewing beforehand or handled as a direct cremation with no ceremony at the funeral home, and the cost difference between those two is enormous. Which you choose drives far more of the bill than the cremation itself.

D

Death benefit

The amount the insurer pays the beneficiary when the insured dies: the face amount plus any additional benefits, minus any outstanding loan or unpaid premium. On a final expense policy it is normally one lump sum paid directly to the beneficiary and is generally received income tax free. It is not restricted to funeral costs; the beneficiary decides how it is spent.

Direct burial

Burial soon after death with no embalming, no viewing and no ceremony at the funeral home, though a graveside gathering or a later memorial service is common. Because it removes the most expensive optional services, it is among the lowest-cost burial arrangements, and funeral homes must list a price for it. Cemetery charges for the plot, the liner or vault, and opening and closing are separate and still apply, which is a large part of the burial-versus-cremation decision.

Direct cremation

Cremation without a viewing or service beforehand, using an alternative container rather than a casket. Funeral homes are required to offer it and to disclose its price, and it is usually the least expensive form of disposition available. Many families choose it and hold a memorial service later at their own pace, which also tends to cost much less.

Disposition

The industry word for what ultimately happens to the body: burial, cremation, entombment in a mausoleum, or donation. Every state requires a permit and an authorized person to sign for it, which is why the legal next of kin, or an agent named in advance, matters. Choosing a disposition is the single decision that drives most of the rest of a funeral bill.

E

Embalming

Replacing bodily fluids with preservative chemicals to slow decomposition, usually so a public viewing can be held. It is rarely required by law, and the FTC Funeral Rule bars a funeral home from telling you it is legally required when it is not. If you skip the viewing you can usually skip the embalming fee, which is one of the more visible lines on a funeral bill.

Endowment care

A portion of what you pay a cemetery that is set aside in a fund whose earnings pay for long-term upkeep of the grounds. It is often required by state law and sometimes shown as a separate line on the contract. It is the same idea as perpetual care, and it does not cover repairs to your own marker or monument.

F

Face amount

The amount of coverage stated on the front of the policy, for example $15,000. It is the starting point for the death benefit before riders, loans or unpaid premiums are applied. Final expense face amounts commonly run from about $2,000 to $50,000, with most policies written between $10,000 and $25,000 — how to pick a number is a question of what your family already has.

G

General Price List

The itemized written price list a funeral home must give you under the FTC Funeral Rule when you ask about arrangements in person, and which you are entitled to keep. It lets you buy items individually instead of taking a package, and it makes two funeral homes genuinely comparable. Asking two or three homes for theirs is the most effective single step for lowering a funeral bill.

Grace period

The window after a missed premium during which the policy stays in force, commonly thirty-one days. Pay inside it and nothing changes; let it run out and the policy lapses. The exact length is set by your contract and state law, so use the number printed in your own policy rather than a general one.

Graded death benefit

A limited benefit structure, standard on guaranteed issue policies, under which death from natural causes during roughly the first two to three years returns the premiums paid plus a modest percentage instead of the full face amount. Accidental death is normally covered in full from day one, and the full face amount becomes payable once the period ends. The exact percentage and length are in your policy schedule, and you can model the shape of it with our graded benefit calculator.

Grave liner

A concrete or plastic shell placed around the casket in the grave to stop the ground from settling. It is a cemetery requirement rather than a legal one, and it is cheaper and less elaborate than a sealed vault. Ask the cemetery which it requires, in writing, before you buy either.

Green burial

Burial without embalming, in a biodegradable casket or shroud, usually without a vault and often in a section set aside for it. Because it removes several expensive items it is frequently less costly than a conventional burial, though not always, since some conservation cemeteries charge more for the land itself. Availability varies a great deal by region.

Guaranteed issue

A policy that asks no health questions and cannot decline you if you are inside the age range, typically about 50 to 85. In exchange, the cost per thousand dollars of coverage is higher and the death benefit is graded for roughly the first two to three years. It exists for people who cannot pass health questions, and it is the wrong choice for anyone who can.

I

Insurable interest

The requirement that whoever buys a policy would suffer a real loss from the insured's death, which is what stops strangers from insuring each other. A spouse, an adult child or a parent normally satisfies it. In this market it usually comes up when an adult child pays for a parent's policy, which is allowed with the parent's knowledge and signature.

Inurnment

Placing cremated remains in their final resting place, whether that is a niche in a columbarium, a grave, or an urn garden. Cemeteries charge a fee for it, in the same way they charge for opening and closing a grave. It is the cremation equivalent of interment, and it is easy to miss when pricing a cremation.

Irrevocable beneficiary

A beneficiary designation that cannot be changed without that beneficiary's written consent. It is uncommon on ordinary final expense policies and shows up mainly where a policy has been assigned, for example to a funeral home under a prepaid arrangement or to meet a Medicaid requirement. Understand it before agreeing, because you are giving up control of who receives the money.

L

Lapse

What happens when premiums stop and the grace period runs out: the coverage ends. Reinstating a lapsed policy can require back premiums and fresh health questions, and if health has changed a replacement policy may cost far more or not be available at all. Because these policies are usually bought late in life, avoiding a lapse is worth more than shaving a few dollars off the premium.

Level death benefit

A death benefit that pays the full face amount from the first day, with no graded or waiting period. Simplified issue policies are normally level; guaranteed issue policies normally are not. If a policy is described to you as level, confirm it on the policy schedule rather than accepting a verbal assurance.

M

Mausoleum

A building or structure with above-ground crypts used for entombment instead of in-ground burial. A single crypt is typically more expensive than a burial plot, and community mausoleums price crypts by height, with eye-level spaces costing the most. Opening and closing the crypt and the inscription on its front are usually charged separately.

Memorial service

A service held without the body present, which can take place days or months after the death and almost anywhere: a church, a home, a hall, a park. Because it needs no embalming, casket, viewing or funeral home facilities on a fixed schedule, it costs far less than a traditional funeral. Pairing a direct cremation with a memorial service later is one of the biggest cost decisions a family makes.

Modified benefit

A middle product between simplified and guaranteed issue: a few health questions, a partial waiting period, and a price in between. Terms vary widely, and some modified plans pay a percentage of the face amount in the second year rather than nothing. Compare it against both alternatives on cost per thousand rather than on the monthly premium alone.

N

Niche

One compartment in a columbarium, sized for one or more urns and closed with a stone, bronze or glass front. Price depends on location, height and whether the front is glass so the urn is visible. As with a grave, expect separate charges for the niche, the inscription and the placement.

Non-forfeiture benefit

The options a whole life policy gives you when you stop paying premiums but have built some cash value: take the surrender value, convert to a smaller paid-up policy, or in some contracts keep full coverage for a limited time. It exists so that stopping payments does not automatically mean losing everything. On a small policy the amounts are modest, especially in the early years.

O

Opening and closing

The cemetery's charge for excavating the grave, lowering the casket, and refilling and restoring the site, sometimes called interment. It is separate from the plot itself and often carries surcharges for weekends and holidays. Ask for it in writing when you price a plot, because it surprises families more than any other cemetery line.

Owner

The person who controls the policy: pays the premium, names and changes the beneficiary, and can surrender or cancel it. The owner is usually the insured but does not have to be, since an adult child can own a policy on a parent with that parent's consent. Only the owner can make changes, which is worth knowing before a family assumes otherwise.

P

Paid-up

A policy that requires no further premiums but keeps its coverage in force. Some whole life policies are designed to be paid up at a stated age, and a non-forfeiture election can turn a lapsing policy into a smaller paid-up one. Ask whether premiums continue for life or stop at a certain age before you buy, because it changes what the policy costs in total.

Perpetual care

The cemetery's ongoing maintenance of its grounds, funded from an endowment or care fund built out of what buyers pay. It generally covers mowing, roads and general upkeep, not the repair or replacement of an individual marker. State laws set out how these funds must be held and used.

Policy schedule

The page near the front of the policy that lists the specific facts of your contract: the insured, the owner, the face amount, the premium and how often it is paid, the issue date, and any graded benefit or waiting period. If a brochure and the schedule disagree, the schedule wins. Read it inside the free look period, and use our list of questions to ask to check it line by line.

Premium

The payment that keeps a policy in force, made monthly, quarterly or annually and usually by bank draft. Final expense premiums are level, so the amount is fixed at issue and does not rise as you age, though paying monthly normally costs a little more over a year than paying annually. The rate you are offered depends on your age on the day you apply.

Pre-need

An arrangement made with a funeral home before death, as opposed to at-need arrangements made afterwards. Pre-need can mean simply recording what you want at no cost, or paying in advance under a prepaid contract, and those are very different commitments. Writing your wishes down is nearly always worthwhile; prepaying deserves a closer look.

Prepaid funeral contract

A contract with one specific funeral home, paid in advance, for named goods and services. What matters is whether the prices are guaranteed, what happens if you move or the home closes or changes hands, whether the money is held in trust or in an insurance policy, and what is refundable if you cancel. The core difference from insurance is that a policy pays cash to a person who can spend it anywhere, while a prepaid contract ties you to one provider.

R

Reduced paid-up

A non-forfeiture option that uses the cash value already in the policy to buy a smaller amount of coverage that needs no further premiums. You keep permanent coverage, just less of it, which is often better than surrendering for cash or letting the policy lapse. The reduced amount is calculated by the insurer from your cash value and your age.

Rider

An optional addition to a policy, such as an accidental death benefit, a child or grandchild term rider, or an accelerated death benefit for terminal illness. Some are included at no cost and some add to the premium. Ask which riders are already inside the policy you are being quoted, because they are easy to assume and easy to miss.

S

Simplified issue

A policy issued on a short list of health questions with no medical exam, often with a prescription history check. It costs less per thousand dollars of coverage than guaranteed issue and normally pays the full face amount from the first day, but the insurer can decline you. Most people who can answer the questions cleanly should apply here first.

Surrender value

The cash an insurer will pay you if you cancel a whole life policy: the cash value less any surrender charge and any outstanding loan. In the early years of a small final expense policy it is often little or nothing, and surrendering ends the coverage permanently. Treat it as a last resort rather than a savings account.

U

Underwriting

How an insurance company decides whether to issue a policy and at what rate. In this market there is no exam, so underwriting rests on the health questions, a prescription database check, and sometimes a recorded phone interview. Different insurers treat the same condition very differently, which is why one decline does not mean you are uninsurable.

V

Vault

A sealed, reinforced outer container that holds the casket in the grave, heavier and more expensive than a plain grave liner. Cemeteries commonly require one or the other to keep the ground from settling, which is a cemetery rule rather than a state law. Claims that a vault preserves remains indefinitely should be treated with caution — compare the cemetery's actual requirement against the least expensive item that satisfies it.

Viewing

A period when family and friends gather with the body present, usually at a funeral home, also called a visitation or a wake. It normally requires embalming, use of the facility and staff, and a casket, which makes it one of the more expensive optional parts of a traditional funeral. A memorial service without the body is the lower-cost alternative.

W

Waiting period

The stretch at the beginning of a policy during which the full face amount is not yet payable for death from natural causes, most often the first two to three years on a guaranteed issue plan. It is also called the graded or limited benefit period. Accidental death is normally covered in full from day one, and the exact terms are on your policy schedule — see when a policy actually pays.

Whole life

Permanent life insurance that lasts for life as long as premiums are paid, with a level premium and a small cash value, as opposed to term insurance which covers a set number of years and then ends. Nearly all final expense policies are small whole life policies. The trade-off is a higher cost per thousand dollars of coverage in exchange for coverage that does not expire when you are eighty.

If a word here is not on this list

Call (888) 415-8284 or email [email protected] and ask. Funeral homes, cemeteries and insurers all use slightly different vocabulary for the same things, and a term you were quoted may be specific to one company's product. When it matters, get the definition in writing from whoever used the word — on a General Price List, a cemetery contract, or your own policy schedule. The site FAQ covers the questions these terms usually lead to, and the calculators let you put your own numbers against them.