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What is the Difference Between Burial Insurance and Life Insurance
Life insurance is an important financial tool. Having this type of insurance coverage can help you to ensure that those whom you love and care about will have protection to go on, in case of the unexpected.
There are many people who feel that life insurance is only needed by those who are young, and who have someone – such as a spouse and / or young children – who are depending upon their income.
Yet, there are also many reasons why those who are older should also have an ample amount of life insurance coverage. One of the biggest reasons for this is because – regardless of what age you may be – you could put your family in the position of having to pay for final expenses.
What Are Final Expenses And How Much Are They?
Final expenses are those costs that have to do with a funeral and other related expenses. These may include the cost of a burial plot, a headstone, flowers, transportation, and the printing of information – which, when added together, can often be in the range of $10,000 (or more).
For those who do not have some insurance to pay for these costs, the responsibility will often fall to that individual’s family or friends. Yet, given the high cost of final expenses, many may not be able to just simply write out a check for these bills.
Unfortunately, what many families or other loved ones end up doing is either selling off assets, dipping into savings – or worse yet – going into credit card debt to pay the tab. This is where a good, solid burial insurance policy can be helpful.
What is Burial Insurance and How Do these Policies Work?
Burial insurance is a type of life insurance protection. These policies are usually provided to people who are age 50 to 85, and the coverage is purchased with the primary intention of paying for one’s funeral and other final expenses. Because of this, burial insurance will often also be referred to as final expense insurance and / or as funeral insurance coverage.
In many cases, the death benefit amount that is offered on burial insurance is somewhere between $5,000 and $25,000 – although there are some insurance carriers that will allow for a higher amount of benefit. This differs from regular life insurance coverage, which can – depending on the applicant’s needs and health history – be offered for up to millions of dollars in benefits.
Oftentimes, because the applicants for burial insurance are older – and therefore, are also more prone to adverse health conditions – these policies will trade off the lower amount of death benefit with the ability to qualify for coverage without taking a medical exam.
In many cases of traditionally underwritten life insurance coverage, an applicant will be required to meet with a paramedical professional, who will take from them a blood and urine sample. These samples will then be tested by the life insurance company for certain types of health conditions that could be considered as risky.
Also, there may be some types of burial insurance that is considered as guaranteed issue. In this case, the applicant for coverage will not only be able to skip the medical exam, but he or she will also not be required to answer health-related questions in order to qualify.
Due to the fact that there are few – if any – medical requirements on the application for burial insurance coverage, these policies can often be issued within just a short period of time. For instance, it may only take a few days – or less – as versus weeks, or even months, when you are applying for regular life insurance protection.
Types of Burial Insurance Available
In most instances, burial insurance is a type of permanent life insurance protection known as whole life. This means that there is both a death benefit, as well as a cash value component in the policy. Once approved, the insurance company typically cannot cancel the policy – unless the premium has not been paid.
In addition, the premium that is charged for many types of burial insurance coverage will be locked in and guaranteed not to increase – even as the insured ages, and / or regardless of whether they attain a serious health issue in the future.
How Much Does Burial Insurance Cost?
Similar to with other types of life insurance, there are several key factors in determining how much a burial insurance policy will cost. These will include both the type and the amount of coverage that you are seeking. It will also include your gender and your age.
When determining just how much burial insurance that you may need, it can help helpful to make phone calls to several different local funeral homes (or make calls to funeral homes in the area that you intend for your final interment). Just as with many other types of products and services, what you may find is that these costs can vary a great deal. Therefore, be sure to choose an amount that will most closely fit the services that you are looking for – and, it is important to also add in some “cushion” just in case these prices go up before they are needed.
In some cases, those who apply for burial insurance coverage will not just include the cost of a funeral and immediately related expenses in their plan. For some, they may also envision the possibility of having certain types of uninsured medical and / or hospice costs, as well, and so they will also allocate some additional coverage in the policy to pay for these.
When you are shopping for the best burial insurance coverage, it is also essential to ensure that you check the premium prices from several different insurance companies. This, too, is because the cost of burial insurance may differ from one insurance carrier to another – even for the very same type and amount of benefits.
In doing so, it could take a great deal of time if you go from one single insurance carrier to another. Therefore, it can be much more time effective if you simply work with an independent life insurance brokerage that has access to many different carriers, all in just one place.
Often, you will be able to determine the premium cost information that you need online – directly from your home computer – and without the need to even meet in person with a life insurance agent.
Who is a Good Candidate for Purchasing Burial Insurance Coverage?
Typically, burial insurance is purchased by those who are considered to be seniors. In most cases, burial insurance is offered to those who are between the ages of 50 and 85 – although there are some life insurance carriers that will provide this type of coverage to older applicants. This differs somewhat for other, regular life insurance, that is offered to applicants of all ages.
In fact, even if you currently have another life insurance policy in place, it is likely that this coverage is already earmarked for other potential financial needs. These could include helping to supplement your surviving spouse’s retirement income, paying off large debts such as your mortgage, or the payment of other financial obligations that you have.
But you may or may not have allocated for the additional cost of your final expenses. With that in mind, even if you already have some life insurance coverage in place, you could still be a good candidate for burial insurance.
Because there is often no medical exam required in order to purchase burial insurance, these policies may also be good for those who have various adverse health issues. This is because having no medical exam to contend with can often allow people to qualify for burial insurance coverage – even if they may have been turned down in the past for traditional life insurance protection.
In addition, there are also some individuals who have a substantial fear of needles. And, because of that, they have avoided applying for life insurance coverage due to the medical exam that is required. Here, too, you may be able to find that – depending on your age and the insurance company you apply with – that a burial insurance plan could offer the opportunity to obtain coverage, without the need to undergo a blood draw as a part of the underwriting and approval process.
Things to Consider When You are Seeking a Burial Insurance Policy
As with other life insurance, there will be several key factors to keep in mind when you are seeking a burial insurance policy. These will include the type and the amount of the coverage, as well as the premium price.
You will also want to check and see just exactly how the death benefit on the burial insurance policy will be paid out. This is because not all burial insurance plans will pay out in the same manner.
For instance, there are some that will pay out 100% of the policy’s stated death benefit, regardless of when the insured passes away. There are other burial insurance policies. However, that may require that the insured own the policy for at least two or three years before paying out 100% of the benefits.
In this case, should the insured die within just the first year or two of policy ownership, then the named policy beneficiary may only receive a certain percentage of the total death benefit amount – or, the beneficiary may alternatively receive back only the amount of the premiums that were paid in. For this reason, be sure that you know what type of burial insurance policy that you are purchasing.
Another big factor to consider with burial insurance is the actual insurance carrier that you are buying the coverage through. Today, there are many insurance companies that offer this type of coverage. However, not all of these insurance companies will be as reliable as the others.
For this reason, be sure to also check the ratings that have been given to the insurance carrier by the insurance company rating agencies such as A.M. Best, Standard & Poor’s, Moody’s, and Fitch. Insurance companies are rated, based upon their financial strength and stability, as well as their overall reputation for paying out claims to their policyholders. These insurer ratings are typically given by way of letter grade. It is important to note that going with a company that has been rated as an A or higher is typically best.
It can also be helpful to check the accreditation, the grade, and any complaint information about an insurance company via the Better Business Bureau (BBB). While not all life insurance carriers will be accredited, they may still have a letter grade. The BBB assigns these letter grades on a scale of A+ to F. You can also reference the website of the Better Business Bureau to view the number of complaints the insurance company has closed out over the past three year and one year periods. Likewise, the BBB will provide information regarding what such complaints were for.
How and Where You Can Get the Best Burial Insurance Quotes
When shopping for burial insurance, it is typically best to go through a company or an agency that has access to numerous different insurance carriers. That way, you can directly compare the plans. If you are currently seeking burial insurance, we can help. We work with many of the top life insurance companies. So, if you are ready to proceed, just simply fill out the form on this page.
Should you still have any additional questions regarding the different between burial insurance and regular life insurance – or even if, you just have a general question or concern – then please feel free to contact us. You can reach us toll-free at 888-389-8676.
We understand that it may seem challenging when trying to determine the best type of life insurance coverage for you needs. We can help you to ensure that you are making the best choice for your needs. So, contact us today – we’re here to help.
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