Burial Insurance

Although the various funeral insurance products available on the market today appear similar, they may not be as straightforward or as simple as they may appear.

More importantly they may not even provide the covered needed when the death does occur. Here are some key factors to consider when deciding whether or not to purchase funeral or burial insurance:

Avoid purchasing too much or too little coverage but rather an adequate protection plan. Remember that insurance agents are not funeral directors and they do not have a good idea on what your funeral costs will actually be. So you want to preplan the funeral and identify the costs of funeral services and other expenses relating to the funeral or memorial. This will then give you a much better indication on how much coverage to purchase.

Anyone who is less than 85 years of age is eligible to purchase funeral or burial insurance. Some companies will require a health examination and some may not. The insurance is sold based on the person's age, lifestyle and health. If an insurance company waves the requirement of a health examination, you should examine a safeguard built into the policy to compensate for any poor health condition, should one exist.

Some insurance companies offer plans that have a time restriction and limit death benefits before the full coverage can be effective. This can occur if the applicant doesn't quality for full coverage because of poor health. If the insured passes away before the time restriction, the insurance may not be fully covered. Make sure you are aware of any limitations should you be in poor health at the time of application.

If you are in good health, you may qualify for full coverage immediately. In this case, you may be able to work with your funeral director or funeral home to hold the cost of the funeral service and other funeral expenses until the payment is received from the insurance company. Often your funeral costs are guaranteed by the funeral home in conjunction with the policy agreement.

The bottom line when considering burial or funeral insurance is to make sure you understand all the details of the policy. Getting any kind of coverage can be a help and will help in trimming funeral expenses when the death occurs.

Understanding Burial Insurance

Burial insurance, also known as funeral or final expense insurance, is a type of life insurance policy specifically designed to cover the costs associated with a person's funeral, burial, and other end-of-life expenses. Unlike traditional life insurance policies that provide larger payouts for broader financial needs, burial insurance offers a smaller, fixed death benefit intended solely to cover the immediate costs of a funeral service, burial plot, casket, headstone, and other related expenses. This type of insurance is generally targeted at seniors who may not need a full life insurance policy but still want to alleviate the financial burden on their families when they pass away. With the average cost of a funeral ranging from $7,000 to $12,000, burial insurance provides peace of mind to policyholders and their families by ensuring that these expenses are covered.

Key Features and Benefits

One of the key features of burial insurance is its simplicity. The application process is straightforward, often requiring only basic health information rather than a full medical examination. This makes it accessible to a broader range of people, especially those who may not qualify for traditional life insurance due to age or health conditions. Policies are typically issued quickly, and premiums are generally affordable, fixed, and designed to remain level for the life of the policy. Another significant benefit is that the death benefit is paid directly to the beneficiary, who can then use the funds to cover funeral expenses or any other costs. Unlike some other types of insurance, burial insurance policies often have fewer exclusions, ensuring that the beneficiaries receive the financial support they need.

Types of Burial Insurance Policies

There are generally two main types of burial insurance policies: simplified issue and guaranteed issue. Simplified issue burial insurance requires the applicant to answer a few health-related questions but does not involve a medical exam. This type is suitable for individuals who are in reasonably good health and want to secure coverage at a lower premium rate. On the other hand, guaranteed issue burial insurance does not require any health questions or medical exams, making it accessible to nearly anyone regardless of their health status. However, this convenience comes at a higher premium cost and often includes a graded death benefit, which means the full benefit amount is not paid out if the policyholder passes away within a certain period after purchasing the policy.

Considerations When Choosing Burial Insurance

When considering burial insurance, it is essential to evaluate several factors, including the policy's cost, the coverage amount, and the waiting period associated with the policy. Prospective buyers should carefully compare different policies to find the one that best fits their budget and needs. It is also crucial to read the fine print to understand any exclusions or limitations, such as waiting periods or partial benefit payouts. Additionally, since burial insurance is generally designed for older individuals, younger people may find that a standard life insurance policy offers better value and broader coverage. Ultimately, burial insurance can be an excellent option for those looking to ensure that their final expenses are covered without placing a financial burden on their loved ones.