What is Burial Insurance?
Also called Funeral Insurance or Final Expense Insurance, Burial Insurance is a whole life insurance policy designed to pay for your end-of-life expenses. Whether it's funeral costs, unpaid medical bills, or unpaid nursing home bills, everybody leaves behind some expenses after passing. Burial Insurance provides your beneficiaries with a small death benefit to put towards these expenses. For many, funeral costs are the sole reason for purchasing a life insurance policy. Burial insurance is specifically designed for this purpose. Burial Insurance will most likely not offer as much value per dollar as a grand life insurance policy, but it will cover the base expenses after death.
Who needs it?
Burial insurance policies aren’t meant for younger people, such as those raising families, who would need life insurance to cover monumental expenses like mortgage, college tuition, and income replacement. This insurance is marketed towards seniors as something they should buy to protect their loved ones from large expenses after they pass. The target market for Burial Insurance tends to be people over the age of 50 who are on tight budgets and don’t have any life insurance or savings.
Burial Insurance vs Life Insurance
Life insurance and Burial insurance can seem very similar at first, yet they have distinct differences. To qualify for life insurance, you may have to take a medical exam which will determine what rate you qualify for. Once approved, you pay a periodic amount to your insurance company. After passing, the life insurance policy will help your beneficiaries cover your family’s living expenses.
Burial Insurance policies do not require a medical examination. To get approval, you simply need to fill out your medication history and answer a few questions. Once qualified, most insurance companies can issue your policy within just a few days. Once in force, burial insurance can pay your expenses quickly. Some policies can even pay benefits in as fast as 24 hours.
Cost
Burial insurance can be relatively affordable. It is purchased for small amounts, such as $5,000 or $10,000, while other whole life insurance policies may require substantially larger minimum coverage amounts of $50,000 to $100,000. The average cost of a burial insurance policy is approximately $50 per month.
Why do I need it?
Everyone will eventually need some way to cover their final expenses. As we stated previously burial insurance is easy to acquire and does not require a medical examination. Additionally, with burial insurance, your premium remains level and cannot be increased by the insurer. It also provides a tax-free death benefit and has coverage guaranteed for a lifetime.
The main reason people buy burial insurance is to cover funeral costs. The average cost of an average moderate funeral service is between $9,000 and $12,000. Burial insurance is an efficient way to avoid eventually burdening your loved ones with such a large expense.
Before making your final decision, be sure to conduct lots of research. Not all companies provide the same type of policy. Assess whether you’re looking to cover the basic funeral costs or would like to provide beneficiaries with extra money after your passing. Figuring out these details ahead of time can save your loved ones from extra aggravation. To learn more about your Burial Insurance options, contact I&E Insurance today.