Burial Insurance — Good Investment or Scam?

The following excerpts are from Erik Eckholm, Burial Insurance, at $2 Per Week, Survives Skeptics, NY Times, Dec. 3, 2006:

Over the decades, the burial insurance business has been marred by scams and racially discriminatory pricing. Even today experts say the policies are costlier than conventional term insurance.

Many lower-income people have a different perspective. They see holding burial insurance as a point of pride, as well as security. They want a dignified funeral for themselves and their kin, and they have seen the crushing debts left by funerals that may cost well over $5,000. * * *

The burial insurance industry is tapping into a long tradition and deep feelings about last rites among many low-income Americans and especially among blacks, who started cooperative societies even in slavery to promise decent burials.

Many of the buyers feel they cannot afford large life insurance policies but see small policies intended to cover funerals, costing as little as $2 a week, as a priority.