Burial insurance, like any major purchase, is best made after research. You’ll also want to consult with experts. Learn more about what to consider by reading below.
If you are reading this article, you are miles ahead of most people when it comes to having the peace of mind offered by a final expense insurance policy. Too often, by the time someone has considered burial insurance, it is too late or too expensive. This leaves loved ones to foot the bill for a funeral and burial, which can easily exceed $10,000.
If you are like most people, you see hundreds of commercials and online ads about burial insurance, and probably wonder what it takes to get a policy. Sometimes the claims seem to be too good to be true. Perhaps you’ve seen the ads on television where you can get guaranteed coverage for only $9.95 /month (35 cents per day). What they don’t tell you is how much coverage that $9.95 will buy. If you are 50 years old, $9.95 per month may buy $1,786 of life insurance, while if you are 85 years old, you may only get $418 of coverage. Fortunately, we have taken the guesswork out of it for you. If you read on, you’ll see exactly how to navigate the process.
What Is Burial Insurance?
While you most likely have an idea of what burial insurance is, let’s talk a bit about what it does and why you might need it. Burial insurance, usually called funeral insurance or final expense insurance, is a specific policy that addresses burial, funeral, and final expenses.
At the time of the insured’s death, the policy will pay out the death benefit to the beneficiary. This benefit can then be used to address any type of expenses, funeral or non-funeral related. There are NO restrictions on how the money can be used.
These whole life insurance policies never require a medical examination nor a review of any medical records, other than looking up prescription history from the national prescription database. Policies will have guaranteed premiums, as well as a death benefit that will cover the insured’s entire life. At the time of death, the policy pays the full amount of the policy to the beneficiary. This is paid out in a timely manner, and in a lump sum tax free payment.
Depending on your needs, a minimum of $10,000 would be a sufficient policy. Others may want to insure up to $25,000, depending on their circumstances. Learn more about costs and what to consider in this article.
Are Burial Insurance Policies A Good Idea?
Burial insurance policies are an excellent way to manage your final expenses, including your funeral. This is especially true if you do not have an existing life insurance policy. Your family will appreciate figuring out your burial needs ahead of time. The first step is to determine how much insurance you need.
To help determine your funeral needs, speaking openly with your family is helpful. This will help you choose the best final expense insurance policy.
Should I Buy Burial Insurance?
This depends on your personal situation. Take your financial position and your family’s financial position into consideration. If you do not have life insurance, then it is highly recommended to have a final expense policy. This way your funeral expenses are paid for, and your family is protected from any unexpected expenses.
Depending on their health, most people have a plethora of choices when looking for burial insurance policies. Many providers, like Mutual of Omaha provide policies that pay an immediate death benefit with no two-year waiting period.
If you are in poor health, you may only qualify for guaranteed issue policies. It may benefit you to investigate Gerber Life policies, especially with preexisting health conditions.
Steps to Buying Burial Insurance
Whether you call it burial insurance, funeral insurance, final expense insurance or even pre-need insurance, you are seeking the same thing.
Below are the steps to finding the best insurance policy.
- Figure out how much coverage you need to pay for the cost of your funeral. Then, add any additional expenses you foresee. This can include remaining medical bills, legal fees, and outstanding credit card balances.
- Make sure there is enough money to cover your final expenses. Start saving today to cover these costs, and be sure the funds are readily available in the event of your passing.
- Determine if you even need final expense insurance. If you will have sufficient funds available at the end of your life, the policy may not be necessary. However, if you are entertaining the idea that you may not have enough money to cover your funeral expenses, then it would be best to have burial insurance. One of the greatest benefits to a final expense policy is that it takes the time factor out of the equation. We are all going to die, we just don’t know when. Perhaps you want to pay as you go, and in 10 years you will have enough saved to pay for your funeral? It’s great that you are saving, but what if you die in 5 years before you have enough savings? Purchasing a final expense policy allows you to lock in the benefit now so your final expenses will be paid regardless of when you die.
- Decide on the type of insurance you will want. Final expense policies typically only cover $2,000-$50,000, as they are earmarked to pay for funeral expenses and end of life costs.
When choosing final expense insurance, you will want to make sure it has level premiums (premiums do not increase as you age). You’ll want a policy from a top rated insurance company with an A.M. Best rating of A- or better. You’ll want to make sure there is no medical exam, but be aware you’ll need to answer questions about your health for any underwritten policy. Answering questions can help you qualify for lower rates, so it is advisable to give up a little health history in order to save money.
- Understand that every person’s needs are different. What your friends signed up for may not cover the costs for you. When requesting a quote, you’ll have an expert guiding you through the process. This will help you to understand the expenses you will need to cover.
- Be sure that the insurance you choose is insurance you can afford. There are companies that will sell you policies that have increasing premiums. There are no real discounts for buying in different states. Any company that makes promises that sound too good to be true should be avoided.
- Choose a provider that you can purchase through agents like those at Benefit Choice Direct. We are able to negotiate the best deals and can walk you through the process to ensure you are protected. We can also make sure you are getting the best type of insurance to suit your needs.