Life insurance is an essential purchase, in fact, it’s one of the most vital purchases that you’ll ever make for yourself and your loved ones. But there are dozens of different policy options and companies to choose from, it can be a long and difficult process choosing between them. One of the common options for some households is to purchase a funeral insurance plan. There is a lot of confusion about these types of plans, but they are one of the best options for your family.These plans have several advantages over a traditional life insurance policy, but how are you supposed to know if they are right for you?
There are many reasons why people purchase life insurance coverage such as guaranteed issue life insurance or even burial insurance for seniors. For some, it is to pay off large debts such as a home mortgage or business expenses for partners. Others own a policy in the event that their income is lost, and so survivors can go on financially without having to drastically alter their lifestyle. Many others still use this coverage for the payment of the substantial estate tax bill that could be due on some people’s estates – which, in some cases, could be in excess of 50 percent. Continue reading to learn more about other types of insurance such as with Gerber Life Insurance.
Regardless of any of the other reasons, most people will have what are referred to as “final expenses” when we die. These are the costs of having a funeral, such as the actual service itself, along with all of the other ancillary costs such as the casket, headstone, grave plot, transportation, flowers, and other related expenses. In most areas of the country today, these expenses can run more than $10,000 – and, as with most other types of goods and services, they continue to rise each year.
The bill from the funeral home is often due at the time of service – but many families simply do not have this type of cash on hand to immediately pay the tab. Unfortunately, the bill is often paid using credit, or by dipping into savings or other assets like retirement funds that were earmarked for other uses. This, in turn, can put a dent in financial resources for loved ones in the future.
There is a better way, however, to pay for this expense. You can do so by purchasing funeral insurance. This type of coverage, often also referred to as burial coverage, is typically inexpensive and easy to qualify for. It can provide your loved ones with cash on hand to pay for funeral services and other items, without the need to use savings or put the bill on high-interest credit cards. This can be an ideal solution in an already stressful time.
What is Funeral Insurance and How Does It Work?
In its most basic sense, funeral insurance actually works in a similar fashion to most other types of life insurance in that a person pays a premium to an insurance company in exchange for the payment of a death benefit to a named beneficiary in the case of the insured’s death while the policy is in force. There are, however, a few things that make funeral insurance a bit different than the average life insurance plan.
In most cases, this type of coverage is provided to individuals who are in the older age ranges – usually between age 50 and 85. In some instances, an applicant can be over age 85 and still qualify for funeral insurance coverage. Every insurance company is different, which means they will all have different age limits on their funeral insurance policies. You’ll need to check with different burial policies to see if you fall within the age requirements.
Typically, funeral insurance will be a permanent type of life insurance coverage rather than term. This means that, as long as the policy’s premium is paid, the coverage will remain in force for the remainder of the insured’s life. (Term life insurance policies are only in force for a certain, set period of time such as 10, 15, 20, 25, or 30 years and then they will automatically expire, leaving the insured to have to re-qualify for coverage if they want to remain insured at their then-current age and health condition). For anyone that is looking to get coverage, and not have to worry about losing coverage in the future, these policies are a great option.
By remaining in force, the death benefit and the premium amount will also usually remain the same. This can be very advantageous for a policyholder – especially those who may be living on a fixed income.
Because funeral insurance is permanent in nature, it means that in addition to death benefit protection, these policies also have a cash value component. Within the cash value portion of the policy, funds are allowed to grow on a tax deferred basis – meaning that no taxes are due on the growth of these funds until they are withdrawn.
Due to the tax deferred nature, the cash can essentially build and compound exponentially over time. Therefore, if the policyholder needs cash for any reason, he or she could either withdraw or borrow from the cash in the policy.
If, however, a policyholder does remove cash from the policy – regardless of whether it is through a withdrawal or a loan – any unpaid balance will be charged against the death benefit proceeds. Therefore, it is important to repay these funds if the policy beneficiary is counting on these funds to pay your final expenses.
The Advantages of Purchasing This Type of Policy
There are many advantages of purchasing funeral insurance. First, there is usually no medical exam required to purchase funeral insurance. This means that there is no need to submit a blood and urine sample like there is with most regular life insurance policy applications.
Those who have various health issues can often qualify for coverage through a no medical exam life insurance policy – even if they have been turned down for traditionally underwritten life insurance protection in the past.
With no medical exam, there is also no time-consuming underwriting to wait for when the policy is being issued. This means that coverage can be issued much more quickly – often within days as versus weeks, or longer, with traditional life insurance policies. For those who need coverage fast, this could be the answer.
In addition, in most cases, the premium amount that you pay for funeral insurance will not increase over time. This means that you won’t need to worry about paying more for your coverage in the future – even if you have a health condition that worsens. This is a significant advantage over some life insurance plans that will eventually become more expensive the older that you get. In some cases, a traditional life insurance policy will become too expensive to afford, but with a burial insurance plan, you won’t have to worry about that.
Another obvious advantage is that these policies are going to be less expensive than a traditional life insurance policy. These policies are much smaller than a life insurance policy, which means that the premiums are going to be less expensive. If you’re at a point of your life where you no longer need a full life insurance policy, these plans are a great way to get coverage without paying the expensive premiums.
What the Insurance Company Needs to Know When You Apply
Although there are very few questions on the application for coverage when applying for funeral insurance, there are still some details about the applicant that the life insurance company needs to know before they will approve an applicant for coverage.
Typically, when obtaining policy information or seeking quotes for funeral insurance coverage, the information that will usually be needed includes the following:
- Amount of coverage being applied for
- Applicant’s height and weight
- Date of birth
- State of residence / zip code
The insurance company will also need to know if the applicant is currently residing in a hospice, hospital, or nursing home facility.
How Much Coverage Do I Need?
One of the most important things to consider when purchasing these plans is how much coverage you are going to buy. One of the worst things that you can do is not buy enough life insurance and your family being left with thousands of dollars of debt. There are several different factors that you’ll need to account for to ensure that you’re getting enough coverage for your loved ones.
The first is any debts other than funeral costs that your family would be responsible for. Would you leave them with any loans, bills, or other debts? If so, make sure that your funeral insurance policy is large enough to pay off all of these expenses without leaving your family any financial complications.
You’ll also need to think about what kind of gift you want to leave to your family members. Most people want to leave their loved ones with a heritage, but Uncle Sam can quickly drain any money that you want to leave to your family. Having a funeral insurance policy is a great way to ensure that they get the gifts that you want to leave them.
These are only a few of the factors that you need to consider when calculating your life insurance needs. Our agents can walk you through the process of deciding how much coverage you need to buy. Not accounting for everything could leave your family with leftover expenses or bills that they don’t have the money to pay for, which can be just as bad as not having coverage at all.
Additional Considerations When Purchasing a Policy
When applying for funeral insurance, one of the big questions you will need to consider is who your named beneficiary (or beneficiaries) will be. This is important, as this will likely be the person or persons who will be making key decisions regarding your final arrangements.
In most states, at the time of a person’s passing, “lineage” dictates who has the right of a deceased person’s disposition. If an individual has no legal descendants who can handle this task, and then in most cases, the township and / or county will take care of this. Typically, this will consist of either a direct burial or a cremation, as chosen by the particular government that is handling the case of the individual.
This situation can be avoided, however, by choosing someone that you know and trust who can carry out your final arrangements. In this case, it is important to ensure that you have chosen an administrator who can also have access to your final expense life insurance funds. Often, by naming this administrator as the beneficiary on your funeral insurance policy, the process can go much more smoothly.
Having a good idea of the cost of a funeral in your area can also help to keep the task less stressful for loved ones. While the national average runs near $10,000, it can differ based on the area of the country in which you live, as well as the specific items that are chosen as part of the funeral procedure.
You may also wish to consider any potential final medical expenses that may be incurred when determining the funeral insurance policy’s death benefit amount. Once you have done so, you will be much better able to move forward with the purchase of a policy that will best fit your specific needs.
While most people do not like to discuss it, having your final arrangements pre-planned – including having the funding in place – can give you and those you love a great deal of peace of mind for when the time comes. It can also allow your survivors to avoid a potentially negative financial situation going forward. Every year there are families that are left having to make difficult decisions of planning the funeral, which can leave them with thoughts of regret and left wondering if they made the right decisions about your final resting place. Instead of adding this burden to your family, plan ahead of time and make the decisions yourself. This will give you and your loved one’s peace of mind.
Nobody wants to think about his or her own death, but it’s one of the most important things that you can do for yourself and your family. You will need to talk to your family and have the difficult conversations with your loved ones. Make sure that you have everything lined out, otherwise your loved ones would be the task of paying for the final expense as well as planning the funeral.
How and Where to Purchase a Funeral Insurance Policy
Most people purchase insurance on the basis of “if” something were to happen. When it comes to funeral insurance, it is just a question of when. The high – and rising – cost of funerals today has made it nearly impossible for loved ones to pay out of pocket, so having a way to access cash can be an ideal way to have this cost taken care of.
Because you never know what’s going to happen tomorrow, it’s better to buy funeral insurance soon rather than later. You can’t predict the future, which means you should buy the protection that your family deserves as soon as possible. Don’t wait any longer.
Knowing that you have a way to pay this expense up front can alleviate a great deal of stress for both you and those whom you care about. There is no need to sell off precious assets, dip into savings, or rack up credit card debt when you have a funding plan in place with a good, solid funeral insurance policy.
When seeking funeral insurance, it is always a good idea to first compare several plans and burial insurance quotes prior to making your purchase. Each company is different, and all of them have different systems for calculating insurance premiums, which means that it’s vital that you compare dozens of companies before you pick one. Because there are dozens and dozens of companies, you could spend weeks calling companies getting the lowest quotes, or you can let us do the work for you. This way, you will be able to determine what exactly is available to you in terms of policies and prices.
There are hundreds of different insurance companies across the United States, if you wanted to find the most affordable funeral insurance, you could spend days calling different agents and getting quotes from all of them. Instead, you can let our agents do all of that work for you.
If you are ready to begin comparing, we can help. We work with many of the best funeral insurance carriers in the marketplace today, and we can help you to obtain all of the important information that you need for making an informed decision. You can get all of the pertinent details directly from your computer quickly, easily, and conveniently, and without the need to meet in person with a life insurance agent. When you’re ready to begin the policy and quote comparison process, all you need to do is fill out the form on this page.
Should you have any additional questions regarding how to obtain funeral insurance policy quotes or comparisons, or even just about funeral insurance in general, our experts are here to assist you. We can walk you through the process of obtaining a side-by-side comparison of the benefits you are looking for so that you have all of the necessary details. For any questions or concerns at all, please feel free to contact us directly by calling, toll-free, 888-389-8676.
One thing that you should know is that burial insurance plans aren’t right for everyone. They are a specific policy that works well for people with no debts and nobody that relies on your paycheck. If you don’t fall under one of these categories, there is a good chance that you still need to have a traditional life insurance with higher coverage.
We understand that buying any life insurance or burial insurance can be a big decision. That is why we want to ensure that you have all of the pertinent details that you require as you move forward. Not having the right policy for you and your family can have dire consequences. They could be left with thousands of dollars of debt, or you could be paying way too much for coverage. Let us help you find the perfect policy at an affordable price. Give us a call today – we are here to help.