Thinking about your death or that of a loved one is not a favorable idea, let alone the expenses incurred from the event.
However, in the practical course of things, preplanning finances takes away the burden from the family members and allows mourning in peace. This is where the concept of burial life insurance comes in.
When you hear a term as straightforward as burial insurance, you may instinctively feel like repelling the subject.
We can use softer names, like final expense insurance if it helps, but allow us to explain why this form of life insurance is a critical aspect of your senior life.
What Exactly is Burial Life Insurance?
Essentially, burial life insurance is whole life insurance designated for elderly or ailing people and their family members.
The structure of the insurance is such that it provides for the funeral and its associated costs after the passing of the policyholder. It is a means of taking charge of all possible financial demands that may occur due to your death to ease your loved one’s worries.
Insurance companies readily offer and emphasize the need for burial insurance plans. Due to its niche-oriented approach, you can purchase it for smaller minimum coverages such as $5000 and escape the whooping premiums of whole life policies.
Who can opt for a Burial Life Insurance Plan?
Typically, burial insurance policies cater to people aged 50 or above. However, in exceptional medical cases, policies even cater to individuals as young as 30.
The policyholder designates a list of beneficiaries who will receive the death benefit to pay off the costs. The number of people on the list is at the discretion of the individual.
Thus, the insurance allows you to exercise control over the finances incurred after your death and serves as a means to tie all loose ends while you’re here.
Is a Burial Life Insurance Plan Worth it?
Naturally, this discussion leads us to one of the most pivotal questions. Is pre-deciding funeral plans worth the time, money, and mental strain? Let us start by highlighting the kind of expenditure your family members will have to face after your death.
Funeral and memorial services can be expensive. On average, at least $8000 is spent on an individual’s end-of-life ceremonies.
This list includes but is not limited to transporting the body from the funeral home to the cemetery, paying for a casket, renting a funeral plot, or even arranging refreshments for the guests.
Thus, the following list of advantages associated with burial insurance will be a welcome means of handling the crisis.
- It takes away any anxiety of covering funeral expenses on their own, taking a loan to do so, or arranging fundraisers from the family members. This allows your loved one’s space to grieve and ultimately move on instead of going circles in a consequent financial crisis.
- It focuses on a particular period of an individual’s life. Thus, it costs less than whole life insurance and is easier to qualify for.
- The insurance policy does not require a medical exam, making it a practical option for ailing individuals.
- The policies focus on compensation in the event of the policyholder’s death. Therefore, the medical questionnaire does not dwell deep into the matters, saving you the trouble of medical certificates and receipts.
What are the Drawbacks of the Insurance Plan?
To further explain the scope of final expense insurance, let us underline some prime drawbacks. This will help you be mindful of them while devising a plan and deducing whether the insurance procedure is your cup of tea.
- Since you’re locking up money for the financial needs after your death, refunds and cash-backs are very hard to execute. Additionally, you must not expect a significant reimbursement within your life. Unlike life insurances, it does not safeguard your financial assets while you’re alive.
- The policies are strictly focused on compensating funeral costs. Thus, they maintain clear transparency of premiums and benefit amounts. The beneficiaries must not expect abundant death benefits that extend beyond the cost of the memorial.
- Navigating flexibility with companies can be very challenging. The insurer may not offer you your preferred service or ideal funeral home location. Comparing options is helpful here, but you will often have to settle for compromises.
Types of Burial Life Insurance
Broadly, you get to choose between 2-3 kinds of burial insurance plans.
They have faint differences in terms of pricing, benefit source, amount, and extent of medical information required beforehand. Understanding the working of the major options will help you make an informed decision later.
Simplified Issue Insurance
The procedure for simplified issue insurance is often deemed appropriate for moderate-risk individuals. This policy offers life insurance coverage without requiring a separate medical exam.
As an alternative, the individual must answer a detailed medical questionnaire that details all existing chronic illnesses, disabilities, or other health problems.
Forgoing the exam cuts upon the waiting period and ensures immediate coverage. However, insurers tend to cash off a relatively higher premium for coverage amounts in such situations.
While you’ll be paying more than the cost of whole life insurance, the payout amount may result in anywhere between $5000 to $10,000.
Guaranteed Issue Insurance
Due to the vague medical assessment carried out in the simplified policy, the prospect of disqualification still lingers on.
For high-risk people or for those of you who would like to avoid health questions, guaranteed issue insurance is an ideal approach. As it works best for high-risk customers, insurers associate a higher premium and low death benefit with it.
Pre-need Issue Insurance
A third subsidiary form of insurance offered by some companies is a pre-need insurance plan. Under this policy, an individual may pay for their funeral in advance according to current market prices.
This burial insurance approach may only be an option if you, unfortunately, are aware of the date and time of the death.
From an economic aspect, the policy helps you lock in your funeral expenditure without the influence of inflation or rising costs. It also allows the funeral home to utilize the death benefit rather than the beneficiary.
What coverage will burial life insurance policies provide?
The burial Life insurance policy works as an alternative to life insurance policies for senior citizens. While there are no fixed rules regarding the usage of money, the sum is sufficient to cover the costs for all memorial services.
The type of insurance policy chosen and the terms of the plan will greatly affect the extent of coverage provided. Generally, the plans generously cover costs for funeral homes, memorial services, burial procedures, or cremation.
A more detailed and thought-out model may also look into sorting real estate matters or paying off debts.
When you’re establishing the conditions of your policy and mapping out the extent of coverage, here are a few pointers to keep in mind:
- Travel costs emerging from traveling to the place of funeral
- Food and residency for guests attending the funeral
- Reimbursement for missed work hours
- Hiring a probate lawyer for estate matters
- Paying off pending medical or domestic bills
- Clearing off credit card debt
- Cleaning out and distributing the deceased’s belongings
- Cost of publishing a newspaper obituary
Most burial policies oblige the companies to pay the sum after the death speedily. The beneficiary is only required to submit the death certificate to get the benefits released.
However, death certificates can take a while to come out. In that case, funeral homes accept insurance policy receipts as proof of payment.
Burial Life Insurance Coverage Costs
Burial life insurance policies present an opportunity for older or ailing individuals to reap life insurance policy benefits.
Since burial costs are only one aspect of life insurances, they come off as more practical investments. They can cost anywhere between $5000 to $10000.
Whatever amount you may be investing in your burial insurance policy is only worth it if the benefit payout is sufficient. To know whether that is the case, you need to have a clear idea of the benefits you intend to reap out of it.
Consider your end-of-life ceremony and determine your preferred memorial service. Then, try visiting several funeral homes and getting a quote from each to determine an average cost to be expected.
With this data in hand, we suggest you overestimate the final figure. This additional value will help cover the cost of any unannounced contributors, such as the flowers used for burial or even fuel cost for travel.
If you’re not opting for a prepaid plan, keep inflation and the rising funeral costs in mind as well.
The amount you pay after every designated period for your policy is called the period. Most efficient insurance plans offer monthly premiums.
The amount is typically paid off by the policyholder themselves unless they are physically or financially incapable of doing so. In that case, an adult child, preferably one of the beneficiaries, may take over.
Premium amount largely depends on the policy chosen, your age, gender, health, and lifestyle conditions. Let us illustrate this with an example.
Consider a 50-year old male deemed healthy by the insurance company under a simplified plan. With a $10,000 death benefit, he can expect to pay about $30 per month. With a guaranteed insurance plan, this would dramatically increase to at least $40.
As the client gets older, adopts health issues, or takes up smoking, the value subsequently increases. However, for a female customer of the same age, the premium would fall to $25.
This highlights the need for effective coordination between your requirements and budget when deciding on a burial insurance policy.
How to Choose the Best Burial Insurance Plan?
Determining what kind of a burial insurance plan would work best for you is a personal decision.
The first step towards it is a thorough understanding of the idea, its scope, and what insurance companies offer today. This in-depth study and other sources on our website would help you accomplish that.
Once you have a clear vision of the idea in mind, you must systematically choose one plan.
- Estimate your budget and devise your funeral needs:
Begin by analyzing what you will leave behind, how much more money is required, and your budget for the insurance. Naturally, you need a list of final expenses to get that data in hand.
Start with highlighting the major costs associated with the memorial services of your preferred end-of-life ceremony. Next, look deeper into the economic aspect to pinpoint secondary expenses such as pending bills or estate matters.
Once you have your needs and budget laid out, you can move towards finding a complimentary insurance plan.
- Find the Best Policy for Yourself:
When you begin looking for insurance plan options, you will have to narrow down the search according to the kind of policy you want. Mainly, you will have to choose between a simplified or guaranteed plan.
In any case, explore the coverage options and premium rates of many different proposals. Look for low premiums that will not skyrocket over the years with high coverage offerings.
Ensure that the plan requires minimum medical assessment to eliminate room for disqualification.
- Comparing Companies and Quotes:
Use sites like A.M. Best or Standard Poor to verify the company’s credibility and market position. You do not want to indulge in fraudulent matters with such a sensitive issue.
Get quotes for your unique situation from multiple companies. Then, get an all-inclusive quote from us at Simplified Brain Insurance to effectively compare and choose the very best.
Taking care of your final expenses so your loved ones can grieve is a very intimate gesture. Not everyone is bestowed with knowledge of such a privilege, and very few actually get to implement it.
If you believe this is a suitable course of action for you, we present the services at Simplified Burial Insurance to you. Get in touch with our expert insurance agents today and begin negotiations for an ideal policy for yourself or a loved one.