Does Burial Insurance Work out of State? Yes! Here’s How

Yes burial insurance(final expense insurance, funeral insurance, cremation insurance etc.) fully works out of state. Final expense insurance(simplified issue whole life insurance & guaranteed issue whole life insurance) covers you out of state because the policy pays out a cash lump-sum death benefit meaning you can use this money anywhere in the U.S. As long as premiums are paid and the policy is active geographic location does not affect the payout. In this article we will layout the core mechanics, logistics & challenges.

Does Final Expense Insurance Cover You Out of State?

Yes because Final expense insurance is a small simplified issue whole life insurance policy(health questions, prescription history & medical history checks with no medical exams) or guaranteed issue whole life insurance policy(no health questions or prescription/medical history checks with a two-year waiting period & Return of Premium Benefit) providing a cash payout.

This cash your beneficiary receives can be used anywhere regardless of what state you are in.

If you are looking for a loved one be sure to check out our article: Can I Buy Final Expense Insurance for a Parent in Another State?

Pre-Need Burial Insurance is Not The Same

Do not confuse this with pre-need burials or pre-paid burials as those are state bound to the funeral home. Pre-need burials do not offer the same flexibility as final expense life insurance.

If you buy a pre-need burial plan you will only be able to use it with the funeral home it is linked to. There is no cash death benefit payout and if you did not finish funding the funeral your family will still come out of pocket.

How Out of State Coverage Works

Life insurance contracts are federally and state regulated. This means you can only purchase final expense insurance in your state of residence where the insurance company & agent/broker is licensed. Once the policy is purchased in your state the death benefit is legally bound regardless of what state you pass away in.

This means if you pass away while on vacation, visiting family in another state, road trip etc. The policy will pay the cash death benefit to your beneficiary all the same.

Wherever you are if you pass away and the insurance carrier receives your death certificate they will do 1 of two things.

1. They will look at your original application and pull medical records if you passed within the first two years of having your policy active. This is called the two-year contestability clause which is not a waiting period. It is simply them double checking to make sure you did not conceal any types of health conditions when you did your original application. Honesty is the best policy, if you did not lie on your application your beneficiary has nothing to worry about in this scenario.
2. If your policy has been active for over two years there is no investigation made and the death benefit is paid out to your beneficiary.

What Happens if you Move to a Different State Permanently

If you move to a different state your policy will not cancel on you or anything like that. Your burial insurance does work out of state regardless of whether you permanently move to a new state.

Insurance companies are licensed nationwide operating across state lines. You will not experience a rate change, policy termination, and you don’t necessarily have to notify the company of your new address unless it is for billing purposes.

Now insurance agents are licensed state by state. This means that if your insurance agent moves from the states you are in. Finding a new one may be an option.

Transporting Remains Across State Lines

Here is the real challenge, transporting your body across state lines for burial. This can cost between $3,000 – $15,000 for permits, transport and professional mortuary services.

If you anticipate this type of scenario for your family you should factor this in. This is the beauty of final expense insurance because it pays cash directly to your beneficiary. Your family can then use these funds to cover the out of state transport costs.

That being said you should calculate this expense ahead of time to have all your bases covered. Having a $20,000 – $25,000 policy should account for these expenses on average. However getting an accurate estimation for your particular logistics is best.

Key Things to Look for on Your Final Expense Policy out of State

Some key things to note for your family about the policy would be:

• Make sure they know where the policy is.
• Have them make sure the policy is active & not lapsed.
• Make sure if it is a level death benefit(immediate policy payout) or graded benefit(gradual payout example: Year one 50% payout, Year two 80% payout etc.)

Having Final Expense Insurance Cover You out of State FAQ’s

Here are some common questions answered below:

Q: Do Funeral Homes Accept out of State Insurance Policies?

A: Yes because the policy pays a cash benefit so as long as the funeral homes accept cash or checks they will accept the death benefit.

Q:Can I buy Final Expense Insurance if I live Partially in another state during the year?

A: Yes, the insurance company would just go off your legal residence & policy should be purchased in your legal residence state.

Work with us to Secure Final Expense Coverage Today

Use our quote form to the right of this page to shop final expense insurance in your state. Work with us and our agents will reach out, assess your needs, health and make a recommendation.

We pride ourselves on assisting clients with getting final expense insurance to cover them out of state. Our agency has helped hundreds of clients nationwide both within and across state lines secure coverage.

We have also assisted our clients beneficiaries with putting the burial insurance benefit to work out of state. These types of scenarios happen every day and we are happy to assist our clients and their families.