Marketing is a funny thing, especially in the life insurance industry. Before you fall for burial insurance gimmicks you should know that burial insurance – also known as funeral insurance – is basically a small whole life insurance policy.
The benefits are typically between $5,000 and $25,000. They are specifically designed to cover your final expenses. The small size of the policies make burial coverage an affordable insurance plan for seniors
Burial vs Funeral Insurance
These terms are often used interchangeably; however, there are a few differences between these two types of coverage that are important to note – especially if you’re looking for affordable coverage. Sometimes, funeral insurance payouts go directly to the funeral home, whereas burial insurance goes to your designated beneficiary.
- Funeral insurance benefits are directly influenced by the cost of your burial, cremation, or funeral. With this type of coverage, you purchase coverage directly from the director of the funeral home you have chosen.
In many instances, the funeral parlor will guarantee the price of the funeral. This means that the policy you choose will cover the cost no matter when you pass away. If your goal is to ease your family’s burden of planning your funeral, then this is a great insurance option. Additionally, with this coverage, you will know exactly how much coverage you need.
Ordinarily, funeral coverage is not purchased through an agent. Rather, you will need to contact funeral homes in your area directly.
- Burial insurance works almost exactly like a regular whole life insurance policy. Once your chosen beneficiaries receive the death benefit of your policy, they can use this money for whatever they choose.
- This coverage is great for those who want their loved ones to have a little extra financial freedom. Burial insurance may be more expensive than simple funeral plans, depending on the size of your coverage.
The average cost of a funeral in America in 2021 was $9,420 and cremation was $6,970, according to the National Funeral Directors Association (https://nfda.org/). For many people, this is an unaffordable expense if you don’t have a plan, which is why burial insurance makes sense.
The Federal Trade Commission created something called the “Funeral Rule,” which provides your right to the funeral arrangements you want, as well as the right to decline any arrangements you do not want. Under this rule, you are entitled to receive funereal pricing information – including all estimated costs. This includes a written price list for things like caskets, burial vaults, and urns.
If your final expense costs concern you, then burial insurance is an excellent option. Typically, burial insurance is bought by seniors and ailing individuals who may not be able to qualify for a traditional life insurance policy.
The coverage for these policies is low, and the premiums are inexpensive. Thanks to the FTC Funeral Rule, you can price out how much you’ll need in advance.
Morever, this allows you to have more control over the affordability of your policy. If you have debts or want to replace your income after you pass, you should give us a call to discuss your traditional life insurance options.
Not all burial policies need to only cover the cost of a funeral. You may very well choose a policy for up to $25,000 of coverage, allowing your loved ones to use the remaining benefit in whatever way they see fit. In certain cases, burial insurance can also be used to cover end-of-life care, or medical bills/debts.
If you want to allocate a set amount of your benefit to your funeral service, you can schedule an appointment with a funeral home without prepaying for the services.
You and the funeral director can sit down and record your burial wishes, which will then be kept at the funeral until you pass away. Be sure to make a copy of any of your wishes so that your family members have them on record.
Final Expense Coverage: The Cost
If you are researching final expense insurance, you are going to encounter a lot of information about how inexpensive this coverage can be. While this is true, the affordability of coverage actually depends on a few factors, including:
- Your gender
- Your age
- Overall health (most burial policies do not require a medical exam; however a health questionnaire may be required)
- The size of your policy
Policies of this nature can range from a few to several hundred dollars monthly, mostly depending on your age and the size of coverage.
Similar to a traditional policy, you should shop around for the best coverage available. This may look like reaching out to an agent, or getting several free online quotes. Taking these extra steps allows you to accurately compare coverage options. Don’t forget to consider applicant waiting periods and expected premium payment schedules!
Is Burial Insurance Always Guaranteed?
In your research, you may also encounter a lot of information about burial insurance being “guaranteed.” This, essentially, means that you cannot be denied for coverage.
Additionally, your policy cannot be canceled due to medical issues – so long as you’re paying premiums. If you’re paying your premiums on time, the policy will last for the duration of your life. Most companies will not require premiums past a certain age.
There are a few conditions to this guaranteed, life-long burial insurance. For example, many companies have a two-year limited benefit. Should you pass away within the policy’s first two years, only your premiums will be returned to your family. Be sure to contact your carrier or your agent to go over your policy’s terms and conditions!
How Much Burial Insurance Should I Buy?
How much coverage you buy all depends on what costs you’d like your benefit to cover!
When looking for affordable burial insurance, you should do your research. List all specific services you’d like at your funeral and their costs. This keeps your wishes in mind – and keeps your burial policy affordable.
The perfect burial coverage will consider flowers, caskets, headstones catering, religious services or crematorial services. Give us a call and let us help you choose the right senior burial insurance for your needs!