Why You Should Buy Burial Insurance
Average American funeral and burial costs now exceed $11,500, according to the National Funeral Directors Association.
A surprise bill of this amount would devastate most American families. It can therefore be a very wise decision to purchase burial insurance (also known as funeral insurance or final expense insurance) to ease the financial burden on your loved ones and give you the peace of mind that your family will be taken care of when you're no longer around to do so yourself
What Is Burial Insurance?
Burial insurance is a type of life insurance that is specifically designed to cover the costs of your funeral and burial. The death benefit from a policy can be used to pay for any expenses related to your death, including the cost of a casket, funeral home services, and even flowers.
Is Burial Insurance The Same As Life Insurance?
Yes! Burial insurance is just an informal name for a small whole life insurance policy. Just as with all life insurance, burial insurance is designed to pay for expenses that will become more burdensome for your loved ones after your passing.
What makes burial insurance distinct is the size of the policy. Burial policies are typically between $2,000 and $40,000, and are sized to meet the end-of-life expenses that Americans face, says Rikin Shah, Co-Founder & CEO of GetSure.org, a final expense life insurance marketplace.
What Does Burial Insurance Cover?
Burial insurance payouts can be used for anything, but the typical use of funds is for the cost of your funeral and burial. This can include the cost of a casket, a funeral service, and a burial plot, among many other expenses.
What Is The Difference Between Whole Life Insurance And Term Life Insurance?
Whole life insurance provides coverage for your entire life, while term life insurance only provides coverage for a specific period of time. Term life insurance is typically less expensive than whole life insurance, but it does not build up cash value and will expire at the end of the term.
Term life insurance is like paying rent for a property while whole life insurance is similar to paying off your mortgage. You may pay less for rent, but at least with a mortgage, a large portion of your premium is going towards building wealth.
Who Buys Burial Insurance?
Burial insurance is often purchased by people who want to ensure that their loved ones are not left with the burden of paying for their funeral and burial expenses. It can also be a good option for people who do not have life insurance or who have only a small life insurance policy
What Types of Burial Insurance Plans Are Available?
What plan types are available? There are two broad categories to choose from:
Simplified issue: In these plans, insurers judge your health based on a set of medical questions. A medical exam is not required, which most buyers find highly appealing. Factors that can result in a denied application include pre-existing conditions, such as complications from diabetes and a recent cancer diagnosis, among others.
Guaranteed issue: With these plans, you don't even need to answer medical questions, much less take an exam. However, because of the risk that this brings to the insurer, these policies are considerably more expensive. Most of these policies also have what is called a "waiting period" — meaning, the full death benefit isn't available for payout until two to three years after the policy has been issued. If you pass away due to natural causes before the end of this waiting period, your beneficiaries would receive a refund of their premiums instead of a full payout. (However, full benefits are typically paid in the event of accidental death.)
How Much Coverage Do I Need?
The amount of coverage you need will depend on your personal circumstances and the costs of your funeral and burial. Be sure to get an estimate of these costs before you purchase a policy.
You may also want to consider whether you want your policy to cover additional costs, such as end-of-life medicals and other unpaid debt you may be liable to leave behind.
How Much Does Burial Insurance Cost?
Burial insurance premiums vary depending on a number of factors, including your age, health, and the amount of coverage you want. However, burial insurance is typically very affordable, and most people can find a policy that fits their budget.
In terms of cost, final expense life insurance rates start at roughly $15 a month with coverage ranging from $5,000 to $40,000. Premiums can be paid monthly or annually. Most companies require that premiums be paid via bank draft, but there are carriers (such as Liberty Bankers Life, Prosperity Life, and others) that allow policyholders to pay with Direct Express debit cards.
If you are considering buying burial insurance, be sure to compare policies from different insurers to find the one that best meets your needs. And make sure to read the fine print so that you understand what is covered and what is not.
How Do I Buy Burial Insurance?
You can purchase burial insurance from an independent life insurance agent or directly from an insurance company. The most important thing to note is that, by law, life insurance prices must be the same, no matter where you buy your policy.
Therefore, most people choose to work with an independent life insurance agency, like GetSure, as they will show you prices from a variety of burial insurance carriers (whereas an insurance carrier will show you only their own prices).
When shopping for burial insurance, be sure to compare the death benefit (the amount of money the policy will pay out upon your death), the premium (the cost of the policy), and the terms and conditions of the policy.
You can also purchase burial insurance through a funeral home or crematory. However, these policies are typically more expensive than those purchased directly from an insurer
Burial insurance is a smart investment that can provide peace of mind in difficult times. It is important to understand your needs and compare policies before buying burial insurance. And be sure to read the fine print so that you know what is covered by your policy.