the insurance company can cancel your burial policy if you don't pay premiums

Can the Insurance Company Cancel My Burial Insurance Policy?

Plenty of people use life insurance as a way to cover funeral and burial costs. Burial insurance is a kind of life insurance specifically intended for seniors’ final expenses. Sometimes it’s called final expense or funeral insurance. Senior Life Services can help you determine if burial insurance is the best option for you. But first, we’re here to answer common questions, including: Can Insurance Companies Cancel Your Burial Insurance Policy?

Also, when deciding if a burial insurance policy is right for you or how much insurance you should buy, it’s important to know what may cause a cancellation.  

What Is Burial Insurance?

Burial insurance is a type of whole life insurance — so policyholders cannot outlive it, and it’s most commonly available in amounts of $10,000 or less. Typically, insurers will issue death benefits as long as the policy has value, which is the case for individuals that continue to pay their premiums. These premiums are invested by the insurer, which then gains value and allows them to issue the payout.  

In some circumstances, the policyholder may be able to borrow against the policy if the cash value allows, which would need to be repaid. In other words, policyholders would be responsible for repaying the amount, plus interest, as well as continuing to pay their premiums.  

If the entire amount isn’t repaid, then the insurer will deduct the owed amount from the eligible benefit amount. As long as the policy has value, there should be funds available for a payout to beneficiaries. After the death occurs, a beneficiary is typically required to file a claim that includes proof of death, and then the amounts will be issued.  

Can Insurers Cancel The Policy?

Insurers have many capabilities but can they cancel a burial insurance policy? This is very important to understand so that you can try to prevent this from happening. Life insurance carriers who sell burial policies generally do not take into account medical circumstances when issuing policies, and will not cancel the policy for these reasons. Considering these policies require payments, either through premiums or against potential borrowed amounts, there could be a chance that insurers will cancel the policies if these payments aren’t made.  

Another reason they may cancel the policy is if they determine the coverage was obtained under fraudulent circumstances. Like most financial products, fraud may include lying, identity theft, and other similar circumstances. This could happen within the contestability period if the insurer determines that there was fraud or they could withhold payout if it’s determined after the policyholder dies.

The Bottom Line

Burial insurance is a type of whole life insurance, which involves policyholders paying premiums to maintain it. If the premiums are not paid or the policyholder borrows against it and doesn’t repay the loan, the insurer could cancel the policy. Another circumstance that could cause cancellation is if the insurer identifies potential fraud. As long as participants are truthful and pay their premiums, the policy should remain active until death.  

Find Out if Burial Insurance Is Right for You!

Don’t let the fear of your policy being canceled keep you from getting the insurance you need. If you’re on a tight budget, in poor health, and/or you don’t have savings or other life insurance that your loved ones could use for funeral expenses, burial insurance may be right for you. Call 800-548-3249 to learn more.


Ensure your loved ones are taken care. Call us today for a quote!

Call Toll Free: (800)548-3249