Is burial insurance worth the cost? This question is asked very often, but it is the wrong question. The better question would be can you afford to be without it?
What Does Burial Insurance Cost?
Burial insurance premiums vary in cost based on the individual being insured. Many factors are considered, such as your age, your answers to health questions, your gender, your desired coverage, and whether you smoke. If you smoke, you will pay a smoker’s rate, which is much higher than a non-smoker rate. If you are seeking $10,000 in coverage, you will pay less per month than if your coverage is for $20,000.
There are ways, of course, to mitigate your burial insurance costs, like eating healthier, exercising, and quitting smoking. You can learn more about this and others in this article.
What Does a Funeral Cost?
A proper funeral averages around $10,000. When determining if burial insurance is worth the cost, it is safe to assume your funeral will cost a minimum of $7,000. The other costs of dying, however, are not included in this estimate.
Your bills must still be paid. You may have significant healthcare debt or credit card debt. If you do not take care of these obligations, they will be passed on to your estate or your children. Having to deal with a financial burden on top of the grief of loss can be overwhelming.
A burial insurance policy will pay for the funeral and other final expenses, giving you and your family peace of mind in the darkest of times.
When estimating the cost of a burial it is important to remember to factor the cost of inflation into the estimate. A funeral that costs $10,000 today will be more expensive 10, 20 or 30 years from now. Remember to plan for the cost in the future, not the cost for today.
What if My Premiums Go Up?
Depending on the type of insurance you have, your premiums will never increase. Beware of some products with “too good to be true” low introductory rates which increase in later years, often becoming unaffordable right when you need the policy most. At Benefit Choice Direct, your rate will be the same throughout the length of your policy. If you are looking for $10,000 worth of coverage, then you will most likely pay around $60/month (depending on certain factors).
Another factor that makes burial insurance worth this low cost would be the fact that your benefits will never decrease as long as premiums are paid and the policy stays in force.
What if I Do Not Have a Burial Insurance Policy?
The cost of NOT having a burial insurance policy can be exorbitant. As we mentioned, funerals alone can average $10,000 in cost. While this seems high, you can also add other costs associated with dying, such as hospital bills, rent and mortgage payments, and credit card debt. All of this can be put a tremendous financial burden on your loved ones.
Another cost that might not come to mind is the uneasiness you will feel knowing that your children and grandchildren have been left with stressful financial obligations while grieving their loss. It is reported that adults over 65 tend to worry most about the future of their children and grandchildren, even more than their own health concerns.
An advantage of securing an insurance policy today is that it takes time out of the picture. As soon as your insurance is issued, you lock in the full amount of the benefit on day one. You do not need to worry about dying before you have saved enough money to pay for your final expenses.
Without a burial insurance policy, you must spend significant time, often many years, to save enough money to pay your final expenses. If you die before you reach your goals, you will not have enough to pay for your funeral. When you purchase a burial insurance policy, in most cases your coverage is available to pay out from day one.