Life insurance can be an important component of most any overall financial plan. But, even if you already have a life insurance policy, you may or may not have earmarked a portion of that coverage for your funeral and other related final expenses.
Today, the cost of a funeral can, on average, run in the price range of between $7,000 to $10,000. This is an amount of money that many families just simply do not have readily available – especially in the case of the unexpected. This is why burial insurance can be an important addition to your financial planning.
What is Burial Insurance and How Does It Work?
Burial insurance is a type of life insurance coverage that is specifically geared for paying one’s funeral and other related costs. This type of coverage – often also referred to as final expense insurance or simply as funeral insurance – is typically sold to those who are between the ages of 50 and 85. Although, there are some insurance carriers that will offer burial insurance to people who are older than age 85.
In many cases, burial insurance is a type of permanent life insurance protection that is known as whole life. With a whole life insurance policy, the insured is covered by a death benefit. The amount of this death benefit cannot decrease, nor can the amount of the premium increase – even in the event that the insured contracts an adverse health condition in the future.
Whole life insurance policies also have a cash value component. The funds that are within this cash value portion of the policy are allowed to grow and compound on a tax-deferred basis, meaning that no tax will be due on the gain of the funds unless or until they are withdrawn.
This can allow the funds to truly compound exponentially over time. If, however, the policyholder chooses to do so, he or she can either borrow or withdraw the money that is in the cash value component of a burial insurance policy – and they can do so for any reason, such as paying off large debt obligations, supplementing their living expenses in retirement, or even for going on a cruise or taking a vacation.
Just like with other types of life insurance coverage, the death benefit proceeds that are received by the named beneficiary are not subject to income tax. Therefore, all of the funds that are received are available for use by the beneficiary for paying funeral costs and other related expenses. In some situations, an individual may even want to name a certain funeral home as the beneficiary of a burial insurance policy so that the funds can quickly be provided for the services that are being rendered. Doing so can also allow your loved ones to have one less thing to worry about at an already difficult time in their lives.
When seeking a burial insurance policy, there are some considerations to be aware of – such as how the death benefit will be paid out. For instance, in some cases, only a portion of the death benefit will be paid out if the insured dies within just one or two years of purchasing the policy. Therefore, it is important to ask the insurance provider whether the death benefits on the policy will be “graded.”
Typically, the amount of death benefit coverage that is purchased with a burial insurance policy is between $5,000 and $25,000. However, in some cases, an individual may want to add some additional coverage so as to take care of paying any other unexpected costs, such as uninsured medical expenses and / or hospice care.
There are some insurance carriers that may provide death benefits on burial insurance that are up in the range of $100,000 or more – and in some instances, coverage may even be closer to $500,000. By having a good idea of how much a funeral and other related costs are in your area, you can be better assured that you will be getting the right amount of protection for you and that you are providing peace of mind to those you love.
Will You Qualify for Burial Insurance?
Even if you have been turned down in the past for life insurance coverage, you may still be able to obtain a burial insurance policy. That is because many burial insurance policies will not require you to take a medical examination as a criterion for qualification.
With regular life insurance plans, it is likely that you have to fully complete an application for coverage that will ask you about your health as well as your health history. There is also usually a medical exam required. During this examination, you will meet with a paramedical professional. That person will ask you some additional questions about your medical situation. They will also require that you submit a blood and a urine sample.
With burial insurance, however, you will not usually be required to undergo a medical exam. In some cases, a burial insurance policy will not even ask you any medical or health related questions on the application for coverage. With a guarantee issue policy, an applicant will be approved for coverage – and that coverage will remain in force as long as the premium continues to be paid.
Who is a Good Candidate for Burial Insurance Coverage?
There can be many good candidates for burial insurance coverage. First, if you need a way to pay for your funeral and other final expenses – and you want to be sure that your loved ones will not have to dip into their savings or use other financial means for paying these costs – then a burial insurance policy may be a good thing to purchase.
For those who may not be able to qualify for a traditional, medically underwritten life insurance policy, burial insurance can also be a good option for you. This is because most burial insurance policies will not require a medical exam – and some can be purchased without even having to provide any health details on the application for coverage.
Because there are no medical exams to review with most burial insurance policies, these may also be a good option for someone who is in need of life insurance quickly. In many cases, burial insurance can be approved and issued within just a few days – and in some instances, this type of coverage may even be approved and issued within the same day that you apply.
Others may be good candidates for burial insurance as well. For instance, if you are highly fearful of needles and you do not want to go through with having a medical exam which involves providing a blood sample – then burial insurance can offer you a way to still obtain life insurance but without the need to meet with a paramedical professional.
Where to Get the Best Rates on Burial Insurance
There are many life insurance carriers that offer burial insurance coverage. However, to obtain the best rates on this type of coverage, you will want to compare policies and premium rates of several different insurance carriers before making your purchase decision.
Going about this by contacting each individual insurer one by one can be extremely time-consuming. A much better alternative is to work in conjunction with an independent life insurance brokerage or agency that has access to multiple insurance carriers all in one convenient place. By going this route, you will be much better able to compare coverage and cost directly – in an unbiased manner – and from there you can determine which plan will be the best for you.
If you are ready to move forward with the purchase of a burial insurance policy, we can help. That is because we work with many of the best life insurance providers in the industry today, and we can assist you with getting all of the pertinent details that you will require for making an informed buying decision. When you are ready to begin the process, then please just simply take a brief moment to fill out the quote form on this page.
Should you find that you still have any additional questions regarding burial insurance – or even if, you just have a general question about life insurance coverage – then please feel free to call us directly. Our experts can be reached via phone, toll-free, by dialing 888-389-8676. We can walk you through the burial insurance policy quote process, and we can help you with determining which plan and premium may be the best for you and for your budget.
We understand that the purchase of a burial insurance policy may be somewhat overwhelming. There are many factors to consider – and you want to be sure that you have the proper type and amount of coverage for your specific needs. Having an ally on your side to guide you can make this process much easier. So, contact us today – we are here to help.