'Survivor' Star Caleb Bankston -- We'll Pay For His Funeral, Says Rai

"Survivor" star Caleb Bankston -- who died in a freak train derailment Tuesday -- will be buried Thursday in Alabama ... and the railroad company where he worked will foot the bill for the funeral ... TMZ has learned.

A rep for Watco Companies -- which operates the Alabama Warrior Railway where the derailment occurred -- says it's been in contact with Bankston's family ... and has promised to cover all of the burial expenses.

TMZ broke the story ... the 26-year-old train engineer was crushed between two rail cars when one of the cars unexpectedly jumped the tracks.

The cause of the derailment is still under investigation.

Caleb was engaged to marry Colton Cumbie this fall. The two appeared together last year on "Survivor: Blood vs. Water."