What Is Funeral Insurance for Seniors?
Funeral insurance is not something that many people generally think about until they are faced with the consequences. It’s essential to make sure your family and friends don’t have to worry about funeral costs and pending medical bills.
Luckily, there are different types of coverage available for seniors.
Read on to find out what burial insurance for seniors is, how it works, and why you should look into getting it today.
What Is Funeral Insurance
Funeral expense insurance, also called final expense insurance, is a type of life insurance that pays out a set amount of money to help cover the costs of a funeral.
It can cover funeral expenses, medical bills incurred by the deceased before their death, and final household costs like paying off any outstanding mortgage on the home.
Funeral insurance may also cover other expenses such as cremation or burial services.
Final Expense Insurance Policy for Seniors
Often, the burial expense covers people aged 50 and over. But it’s best to ask an insurance agent about the specifics of your policy. There are burial insurance policies that cover as young as age 30.
You may want to apply for funeral insurance before you retire. It would be best if you did this earlier because there’s no telling when the time will come, and with so much uncertainty about life after work.
When you’re young, the cost of a plan is low, and there are few limits on how long they last. But as you age, your health changes. That means that eventually, one will no longer be affordable or suitable for us.
By then, it may have already begun costing more. An excellent way to solve this problem would be to get covered early with a final expense.
Who Sells Funeral Insurance?
You can get it through an independent insurance agent, like us. We shop for the most affordable plan for you.
Some state laws license funeral homes to sell burial insurance. That means, if you go to a funeral home to plan your loved one’s service, they may offer you a policy right then and there.
But even if the funeral home doesn’t sell policies, it can recommend an insurance agent who does. You could also contact an insurance company directly or through an agent.
However, if someone in your family has passed away recently and you are still feeling the pain of loss, this may be too much for you to handle.
If that’s the case, go ahead and speak to the funeral director. They should be able to tell you about any policies that may still be available for your loved one.
Why Get Burial Insurance?
One of the nicest things we can do is protect those left behind from having to pay a considerable amount, especially after losing their spouse or parents due to unexpected medical costs.
Funeral insurance gives peace of mind in knowing that our loved ones won’t have to bear the burden of our final expenses. It also lessens the financial impact on them during a difficult time.
Burial insurance is a perfect option for those with pre-existing conditions.
You don’t need to be insured or have good credit to get this policy because it doesn’t depend on your health records. But it requires that you take out an additional rider called “burial.”
This can be a good policy for people with pre-existing conditions and can’t qualify for the traditional life insurance policy.
It can be tough enough to plan for our funeral but knowing our loved ones are taken care of makes things a little easier.
Now is the perfect time to look into funeral insurance for seniors, so head on to our website today to know the best burial insurance companies.
What Is a Death Benefit?
A death benefit is one-time financial assistance that an insurance policy provides to the beneficiary of the insured person.
The amount may vary, depending on whether it’s included in your life or funeral benefits package and sometimes depends on how long you have held your coverage.
You can also request additional death benefit amounts if needed for other expenses, like a public memorial service.
Generally, the beneficiary will receive the death benefit within two weeks of your loved one’s death.
What Does Standard Final Expense Insurance for Seniors Cover?
Funeral insurance for seniors typically covers expenses like:
- The funeral service
- Cremation or burial
- The cost of a casket or burial vault
- Funeral home charges
- A plot in a cemetery
Some policies may also cover transporting the deceased to their final resting place.
Your beneficiaries may also use the funds to cover:
- Pending medical bills
- The cost of a newspaper obituary
- Credit card debt
- Legal services
- Other loans
Is There an Age Limit?
There is no age limit for having funeral insurance in your life and death benefits package.
You can start coverage at any point during your senior years, though we recommend you speak with a licensed insurance agent about your options.
The main thing to remember is that you will need someone to come forward as the beneficiary of your policy if anything happens to you, whether it’s a spouse or other family member.
Funeral Insurance Costs & Premiums
Final expense insurance is relatively cheap compared to other life insurance types. Whereas you need to spend $50,000 on other insurance policies, a burial insurance policy will only cost you (often) between $5,000 and $10,000.
Premiums are usually small and paid weekly. The policy owner may collect the premium at home or work, which can easily track how much you pay each month for the coverage it offers.
For example, if someone pays $3 per week in premiums, they’ll get up to $6,000 worth of protection from this plan because there’s also a death benefit.
Men’s premium rates are higher than women’s because young men are more likely to die than young women.
The premium rates for married people are higher than those who aren’t, as this policy may cover their spouse and children in case of an unexpected death.
The cost varies depending on how much space and time you want to be included in the contract price.
Pros & Cons of Funeral Insurance Policies
Like other life insurance policies, burial insurance has both advantages and disadvantages.
- One of the main pros is that it can help your loved ones save money by covering funeral costs. This way, they won’t have to worry about paying for these expenses on their own right away or planning a fundraiser to cover them.
- Another advantage of final expense insurance is that it’s easier to qualify than traditional life insurance policies. This is because the main goal of this policy is to cover funeral costs, not to leave your loved ones with a large sum of money.
- A burial insurance policy is cheaper than other life insurance types. For example, you might need to spend at least $50,000 on a traditional life insurance policy, but you can get a burial insurance policy for between $5000 and $10,000.
- No medical exam is required to sign up for this type of insurance, making it a good option if you have any major health problems.
- Few questions are asked about your medical history, as these policies are meant to provide coverage in case of an unexpected death.
But there are still some cons associated with this type of policy.
- A funeral insurance policy may not be as flexible as you would like it to be. For example, the beneficiary may not choose their own funeral home or decide on the type of service they want.
- Since these policies are meant to cover funeral costs, you may not receive as much money as you would like if you pass away.
- The policy also doesn’t pay out until after your death, so you won’t be able to use the money while you’re alive.
- Another drawback of this type of policy is that it doesn’t pay out until after your death, which means there’s no protection during your lifetime.
Types of Burial Insurance Plans
There are two main types of burial insurance plans:
- Simplified issue policy
- Guaranteed issue policy
Simplified issue policies provide life insurance coverage without the hassle of a medical exam, but you’ll need to fill out some health questionnaires.
While most questions can disqualify applicants outright if they don’t meet specific criteria, such as using a wheelchair or living with chronic illnesses like cancer and diabetes – there are “knockout” ones that will deny your application on sight.
A guaranteed life insurance policy requires no health questionnaires or medical exams. You may only be required to answer a few basic questions. However, the trade-off is that you’ll likely have to pay a higher premium due to the increased risk for the insurer.
In most cases, though, it might be a bit tricky to find an insurer that offers guaranteed life insurance policies.
Which type of policy is best for you will depend on your age and health condition. Generally speaking, if you’re in good health, a simplified policy might be a better option, as you will likely get a lower premium.
If you aren’t in the best of health, or if you’re worried about your health, then a simplified issue policy might be the better option.
Some insurance companies would add another type of burial insurance plan; preneed insurance. This type of insurance allows policyholders to pay for their funeral arrangements in advance, locking in today’s prices.
There are pros and cons to preneed insurance plans.
On the one hand, you’re guaranteed that your wishes will be carried out. And on the other hand, if you decide you no longer want or need the coverage, it can be difficult to get your money back.
Ultimately, the best type of burial insurance for you will depend on your specific needs and situation. Do plenty of research before making a decision, and if you have any questions, don’t hesitate to ask an expert.
Pre-Need Funeral Insurance vs. Final Expense Insurance
Pre-need funeral insurance is a policy where the insured person pays for their funeral arrangements in advance. The policy’s beneficiary then receives money from the insurance company to help cover the funeral costs.
On the other hand, final expense insurance does not require paying for your funeral in advance. If you die and have a final expense insurance policy, the insurance company will pay for your funeral arrangements.
Pre-need funeral services are a great way to ensure that you have everything taken care of before passing. You can decide on all elements, including the type and amount for final expenses like flowers or transportation fees.
Another difference between pre-need funeral insurance and final expense insurance is that pre-need funeral insurance covers the cost of a specific funeral home’s services. In contrast, final expense insurance pays for any funeral service.
Pre-need funeral policies are also more expensive than final expense policies.
The pre-need funds are given to the funeral home, whereas the final expense insurance payout goes to the beneficiary.
One thing to consider is that if you have a pre-need funeral policy, the funeral home may not allow any other services or products from another company.
The best way to make sure your family knows what you want is to have a conversation with them about your wishes and then put them in writing.
This way, if something happens to you and your family can’t make the funeral arrangements, they know what you want.
Guaranteed Policy- Burial Insurance With No Medical Exam and No Waiting Period
Most life insurance providers offer plans that pay the full death benefit amount as soon as your first premium payment is made and you’re approved.
Suppose, for whatever reason, it was misrepresented or there’s not adequate coverage in place when an unexpected event happens to take one’s life.
Your beneficiaries will be financially compensated by this kind of policy so long as nothing else changes with regard to your application or status after the purchase date.
Your insurance coverage depends on the information you provide during your application. It’s essential to answer these questions honestly because the insurer may cancel your policy if there are intentional discrepancies.
Many companies provide immediate gratification through policies with no waiting period before receiving benefits, including paying premiums upfront.
Types of Funeral Insurance Premiums
There are four types of final expense insurance premiums:
- Stepped premiums
- Leveled premiums
- Capped premiums
- Payout guarantee premiums
Stepped premiums are calculated each year you renew your policy using the death benefits, age, and sex.
At first, it’s cheaper, but over time, as you get older, these rates will go up with higher premiums every subsequent contract renewal period until death.
For example, when somebody renews annually, they’ll often pay $500-$600 per month during their 20’s.
Then, they step up at 50 years old, where monthly premiums are raised around 100-150% depending on whether one person is benefitting from death benefit or multiple people sharing this expense with them.
Leveled premiums are set rates that never change. Regardless of your age, sex, or health condition, the premium you agree to when taking out the policy will be what you pay for the rest of your life.
A good example is when an individual buys a policy at $30/month and it remains that same amount, regardless of any rate hikes the insurance company may put into place.
Capped premiums work very similarly to leveled premiums policies but with one exception – the total premium paid will never exceed a certain limit.
The premiums are great if you keep your coverage without paying monthly fees forever. Once you’ve reached the set age or monetary limit, it’ll no longer cost anything extra.
For example, you may have a $15,000-lifetime payout limit and once you hit that number your coverage is terminated. These premiums work well for people who want coverage but don’t have much money.
Payout Guaranteed Premiums
With payout guarantee premiums, your beneficiary will receive a higher total between what you paid in premiums or what was originally insured.
There are cases where you pay more than what is covered in your policy.
Or, death comes earlier than expected where the insurer pays out at your original coverage amount.
For example, if you paid $12,000 in premiums and your policy is for $50,000, the beneficiary would receive $50,000 – which is the highest figure between the two.
Also, if you pay a total of $15,000 in premiums and the funeral cost is less than that amount at death, the beneficiary will receive the full payout.
If it’s more costly to put on a burial or cremation service, they’ll be paid whatever is necessary for them to cover those costs.
No matter which type of funeral insurance premium you choose to have, it’s important that you fully understand how each works before signing up.
How to Choose the Best Funeral Insurance Plan
When you’re choosing the best funeral insurance plan, there are several things to keep in mind. You want your family to feel that their loved one’s life wasn’t forgotten and that they were properly cared for after death.
There’s a lot of grieving involved with losing someone close, and this can be made easier by having an appropriate burial service and memorial planned out ahead of time.
Here are tips on how to choose the right burial insurance policy for you:
- Consider your needs and budget. Funeral insurance policies can be expensive, so you’ll want to ensure that the policy you choose fits your needs and your budget. You can find several policies on the market, so it’s essential to compare them all ahead of time. Here are tips on how to choose the right burial insurance policy for you:
- Look for a plan with low premiums and high coverage limits. This will ensure that you’re getting the most bang for your buck and that your loved ones won’t have to worry about finances when you die.
- When choosing burial insurance, you’ll need to consider what type of policy is best for your needs. Look at coverage options and types of plans available. There are a few different burial insurance policies, including final expense policies, whole life policies, and universal life policies.
- Each type of policy has its own set of benefits and drawbacks, so you’ll need to decide which one is best for you. Consider how much coverage you’ll need and whether or not the plan offers riders extra coverage.
- Check the company’s rating and financial stability. When choosing a burial insurance policy, it’s essential to ensure that the company you choose is financially stable and has a good reputation. You can check a company’s rating on sites like A.M. Best or Standard & Poor’s.
- Get quotes from multiple companies. It’s always a good idea to get quotes from various companies before choosing a burial insurance policy. This way, you can compare rates and benefits and choose the best policy for your needs.
Are There Burial Insurance Plans for the Entire Family?
You can’t get a burial insurance plan for your whole family. The policies are based on age and gender. And this makes it difficult for companies to bundle individuals together into one plan.
If your spouse or any other family member wants a final expense policy, they’ll have to apply it separately.
This may be bad news for people who want to ensure their loved ones are taken care of after they die. But it’s good news for those who need coverage and doesn’t want to pay more than necessary.
It’s also an advantage because you use the chance to compare different plans before you buy.
Convert a Life Insurance Policy into a Burial Policy
Many people believe that they can convert a life insurance policy to a funeral insurance policy. But it isn’t possible to convert a life insurance policy into a burial one.
You can protect your loved ones by making sure they know any final wishes you have in advance. This will ensure that the life insurance policy is valid and covers all funeral expenses, no matter how complicated or extravagant it may seem at first glance.
That said, you can purchase life insurance and state that you want it to cover your funeral costs. The policy can cover your final expenses at a fraction of the actual cost.
What Is Cremation Insurance?
Cremation insurance is a type of policy that pays out a certain amount of money to help cover the costs of cremating a loved one. This type of policy is becoming more and more popular as the cremation process becomes more common.
Many people choose to cremate their loved ones because it is cheaper than a traditional burial. But even though cremation is often less expensive, the cost of the cremation itself can still be quite high. That’s where cremation insurance comes in.
Cremation insurance policies usually pay out a certain amount of money (usually $1000 or more) to help cover the costs of cremating a loved one. This can be helpful for families who are already dealing with a lot of stress and grief.
It’s important to note that cremation insurance is not the same as funeral insurance. Although cremation insurance can help cover some of the costs of a funeral, it won’t be able to cover everything.
How to Plan for a Funeral
One of the hardest things to do is to plan for a funeral. It’s not something you should try to do alone, so you should include family members in the process.
Use these tips when planning for a funeral:
1. Choose Between Burial and Cremation
The first step is to decide whether you want to be buried or cremated. There are pros and cons to both, so you can choose whichever one seems like the best option for your family.
Both of these options will require a funeral service afterward.
If viewing is important to you, then burial may be better because it allows people to see you in your coffin before they leave the cemetery. Cremation limits this because the ashes are usually scattered or buried in an urn.
However, cremation is becoming more popular, with many people abandoning the idea of a traditional funeral to have the ashes in an urn displayed at home.
According to the National Funeral Directors Association, or NFDA, more than 50% of people who died in 2020 were cremated. By 2040, more than 80% of people who die will be cremated.
2. Choose a Funeral Home
After you’ve decided on the type of funeral, it’s time to choose a funeral home. This can be difficult because there are so many to choose from. You’ll want to find one that is reputable and has experience with the type of service you’re looking for.
The NFDA has a searchable database of funeral homes. You can also ask friends and family for recommendations.
3. Plan the Service
Once you’ve chosen the funeral home, it’s time to plan the service. This will include choosing a casket or urn, deciding on music, and picking out readings and other tributes.
4. Choose Who Will Lead The Funeral Service
The next step is to choose who will lead your funeral service. You can either do this yourself or leave it up to your family members and friends who want to help you during this difficult time.
If they agree, let them decide what songs should be played at the funeral, what readings to use, and who will give the eulogy.
If you’re choosing someone yourself, make sure they are comfortable with this role. They may not be able to handle it emotionally or have enough time to prepare.
5. Plan Out the Details
The final step is to plan out all of the details. This includes the date and time of the service, what type of food will be served afterward, and how you want people to remember your loved one.
You can create a funeral program or an online tribute to share photos and memories with friends and family.
Making these decisions may seem overwhelming, but it’s essential to do what feels best for you and your family. Having a funeral is one way to say goodbye and start healing.
Share Your Final Wishes With Your Family
One of the most important things during your last days is to share your final wishes with your family.
You may write a letter or create an online tribute that people can access after you’re gone so they know exactly what’s going on and how to proceed if something happens before arrangements have been made.
This will help them feel more in control during the funeral planning process.
Although it can be difficult to plan for a funeral, you don’t have to do it alone. Reach out to friends and family who want to help and use these tips to make the process a little bit easier.
What Are the Alternatives to Burial Insurance?
There are many other ways to cover your funeral costs.
Term Life Insurance
Your family could also receive a death benefit from your term life insurance policy.
Life Insurance Settlement
If you have a life insurance policy with a cash value, you could sell the policy to a third party for its cash value.
Guaranteed Issue Whole Life Insurance
You could buy a whole life insurance policy that does not require you to answer any health questions.
Allocate Money for Your Funeral in Your Will
You could also include money for your funeral in your will.
You could purchase a pre-need insurance policy, which will pay for your funeral costs when you die.
Cemetery Arrangements on Behalf of Others
Your family could also plan the funeral and then pay for it later with money they receive from Social Security or Veterans benefits, which are not considered taxable income in some cases.
Best Funeral Insurance Companies for Seniors
There are many funeral insurance providers. That makes it difficult to decide which company is right for a particular situation.
Some of the best burial insurance companies include:
1. Mutual of Omaha
Policy: Guaranteed Whole Life Insurance
Eligible age : 45 – 85 (50 – 75 in NY)
Coverage: $2,000 – $25,000 (At least $5,000 in WA).
States available: All states except Montana
Policy: Immediate Solution Life Insurance
Eligible age: 15 days old – 85
Coverage: $1,000 – $50,000
States available: All states
3. Foresters Financial
Policy: PlanRight Whole Life Insurance
Eligible age: 50 to 85
Coverage: $5,000 to $35,000
States available: All states
FAQs About Funeral Insurance
Here are some frequently asked questions about final expense insurance:
What does burial insurance cover?
Burial insurance covers the costs of your funeral, including the burial or cremation.
Can I buy a policy for someone else?
Yes, you can buy a policy for someone else as long as they are eligible for coverage.
Do I have to be in good health to get a policy?
No, most policies do not require a medical exam.
Can I get coverage if I’m already pregnant?
Yes, most policies do not have any restrictions for pregnant women.
Is there a waiting period before my policy goes into effect?
No, your policy will go into effect as soon as approved, and you have made your first premium payment.
The Bottom Line
A funeral can cost a lot of money, and if you do not have the funds to pay for it yourself, you might want to consider buying some type of insurance that will help protect your loved ones from having to pay the cost of your funeral.
Many people don’t think about this ahead of time, and it can be a big relief to know that you have taken care of things for them when they are gone.
There are a few different types of funeral insurance policies available, and you should shop around to find the best one for you.
Some burial policies will pay out a certain amount of money when you die, while others will cover the cost of your funeral upfront.
Make sure to read the fine print carefully, and ask your insurance agent any questions you might have. This way, you’ll know what type of policy is best for you according to your needs.
You can check out some reputable funeral insurance companies like AARP if you want an unbiased opinion on the different policies that are available in the market