Does Burial Insurance Have Cash Value? Find Out Here

Last Updated on: July 4, 2024

Reviewed by Kyle Wilson

Does Burial Insurance Have Cash Value

Are you Thinking about how to plan their financial future? Does burial insurance have cash value? People understand burial insurance as a product aimed to help them pay for the funeral. However, it is more than that.  By understanding how these policies build cash value, you can unlock a range of financial benefits that might just surprise you. Let’s discuss what makes burial insurance a smart choice for securing both immediate and future financial needs.

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Does burial insurance have cash value?

Burial insurance, sometimes called final expense insurance, can build cash value over time. This means as you pay your premiums, part of it goes into a savings component. You can access this money if you need it while you’re still alive. It grows slowly but can be useful.

  • Savings Component: Part of your premium builds cash value.
  • Access Funds: You can borrow or withdraw from it.
  • Slow Growth: The cash value increases over time.
  • Extra Security: Provides a financial cushion if needed.

This makes burial insurance not just for covering final expenses but also a small savings option. Always check your policy details to see Does burial insurance have cash value? And how the cash value works for you.

Will a Burial Plan Have a Cash Value?

This means that policyholders are expected to pay a premium — usually monthly — in order to keep the burial insurance policy active to enable their families to get the specified amount of money after they are gone. Paying premiums results in the increase of the face value of the policy because of the amounts that are paid into it. Does burial insurance have cash value that can be surrendered and borrowed? The answer is yes.

How Can This Work?

Like other whole life insurance plans, burial insurance cash value will increase in value shortly after one has purchased the insurance. This is possible because the insurer will have the money the policyholder pays (through premiums), which (hopefully) will involve gains that increase the face value of the policy and create what is referred to as the ‘cash value’ that acts like a savings account.

Just like similar financial products the more the amount invested and the more it increases, the more its value. The difference is that this amount could be equal to or greater than the death benefit specified in the policy; the excess is considered as a cash value that can be taken as a loan against it.

How Does Cash Value Affect The Death Benefit and Policy?

Several things could affect the death benefit and policy. Considering the cash value can impact the face value of the policy, as there could be an effect on the benefit that beneficiaries will get — considering the policy could be worth more than anticipated. In other words, the beneficiaries could reap the rewards.  

On the other hand, if the policyholder ends up borrowing against the cash value, the amount borrowed will be considered a loan that gains interest and will need to be repaid. The length of time and amount that needs to be paid can affect the benefit and may cause the insurer to cancel the plan if the owed amount exceeds the benefit amount. So, if the insurer determines that the amount owed is more than the amount eligible to receive they can cancel the policy.

Burial Life Insurance Cash Value Is Limited

In most instances, burial life insurance is known to be a permanent life insurance policy. Therefore, most policies technically create cash value. But often the actual cash value is not very high; it may be rather small. Every type of life insurance has a cash value, which is based on the premiums paid and the face value of the policy. With burial insurance:

  • The face amounts of these bonds are often less than $50,000.
  • Policies can range from $5,000 or $10,000 and such.
  • Premiums are very inexpensive.
  • The majority of customers are those of the older generation.

For these reasons, the cash value of a burial insurance policy is incremental and low. The chances are that it will never be big enough for the older person to get a loan against it or to use it to cater for the expenses of life. The burial insurance policies may have cash surrender provisions but the cash value benefits will be considerably less than the face amount.

When Does Burial Insurance Have Cash Value?

Any type of whole-life burial insurance policy will give cash value no matter the insurance company you purchase the policy from.

Every kind of permanent life insurance (whole or universal) contains a cash value. They are like equity accounts where you receive payments while you are still alive. This is usually a savings account where you send a small part of your premium payments; it usually also earns some interest.

How much cash value increases mainly depends on what you pay each month and for how long. However, there are some issues with classification accuracy and the accumulation feature which doesn’t occur during the first two years (with any company).

How Can The Cash Value Be Used?

After knowing Does burial insurance have cash value? Thinking about ways in which the burial insurance cash value may be accessed? It’s pretty versatile. The cash value can be used as an extra source of funds if the need arises in the future. The following are the different categories by which you can harness it.


Policy Loan: In an emergency and you need cash? If you want to access the money while you are still alive, you are free to borrow against the policy cash value. It’s like borrowing from oneself. These loans commonly have lower interest rates compared to personal loans or credit cards. You can repay the loan in small monthly installments, although the areas not paid affect the amount that is paid to beneficiaries in the event of your death.

Surrender the Policy: If for any reason, you realize that you do not require it anymore, there is the option of surrendering it. That way, the policy is terminated, and the holder gets the total cash value of the policy. This option may be helpful if you often need a certain amount of money at a certain point in time and you have high interest rates. However, giving up the policy results in the complete loss of the actual death benefit, so choosing this option should be done carefully.

Automatic Premium Loan: In some cases, it can be challenging to make premium payments, including when you have a financial crisis. An automatic premium loan works such that when you fail to pay your premiums, the cash value of the policy pays for the premium. This feature guarantees that your policy is active so you don’t have your coverage canceled, but this loan will come with a certain interest to be paid later.

Reduce Paid-Up: Do you want to be relieved from paying premiums but still want to enjoy certain benefits? It is possible to use it for cash value or surrender your policy for a reduced paid-up policy. This means that you no longer pay any premiums, but you can still have a limited amount of insurance coverage for the rest of your life. It is a way to keep at least something guaranteed while not paying for it monthly or annually.

Extended-Term Insurance: Generally if you stop paying premiums completely, the policy can automatically use the cash value to buy term insurance. This permanent-type insurance pays out after a specified period, which may depend on the amount of cash value. It keeps your insurance active for some time but if it is not renewed or converted it becomes invalid after some time.

These offers are flexible and financially beneficial. It is up to you, based on your specific circumstances, to decide the most appropriate way to utilize the surrender burial insurance cash value. This is why it is necessary to make decisions about long-term requirements and seek the assistance of an insurance adviser.


It’s all About Does burial insurance have cash value. For many people, it’s important to ensure their family and loved ones can fulfill their final wishes. In some cases, burial insurance can help with that. Planning and paying for your end of life is one of the greatest gifts you can give your family members and loved ones.



Here is our expert author, Kyle, your go-to source for simplified insights into the world of life insurance. With years of industry experience, Kyle delivers concise and approachable content, ensuring you navigate the complexities with confidence.

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