Burial and Funeral Insurance

Burial And Funeral InsuranceBurial and funeral insurance is also known as final expense insurance, which kind of explains just what it is. Burial insurance is used to cover the costs of the funeral, burial, or cremation of a person.  Funeral and burial expenses can exceed $6,000 pretty easily and without the proper planning it can be a bill that is left to your loved ones to deal with while they are mourning their loss. Burial insurance is the best way to prepare for this. The money is there even after you have passed, allowing for you to pay for these expenses while allowing your loved ones to be able to mourn without this added stress.

Now burial insurance policies are often bundled as part of a whole live insurance policy. For those who may not know there are several different types of whole-life insurance, one of which is the burial insurance. Whole life insurance plans can last a lifetime and burial insurance is a type of whole life insurance that generally have face amounts up to $30,000, which is designated to take care of funeral expenses.

Burial insurance is a good option if what you are looking for in a whole life insurance is funds to pay for funeral expenses primarily.  Burial insurance does not require a medical exam to receive benefits. Burial insurance is offered for people starting at the age of 45 and the death benefit is immediate.

With immediate benefit, you will have the full amount of the policy immediately after being approved. With a modified or graded policy, the face amount is not available until a certain amount of time has passed. Generally carriers will offer a modified plan where the full amount will be there after three years, while others may offer benefits in as little as two. If a death occurs during the modified period, all carriers will return premiums paid and some will include interest.

If you have very ill health and cannot qualify for an immediate or modified plan, some insurance companies will offer a small face amount graded whole life or guaranteed issued life insurance plan. Guaranteed issue policies generally feature a max face amount of $10,000. They come with a waiting period of 36 months or so, before the full face amount is in force. In general no medical questions are asked, but some will not accept people who have a terminal illness.

If you are getting up there in age and want to ensure that your family and loved ones do not have the financial burden of having to pay for the burial expenses, then a burial whole life insurance policy may be what you need. If you are shopping for a policy you may consider talking to your local independent insurance agent, who will be able to walk you through various offerings, helping you find a policy that works for you.

The main purpose of burial insurance is to cover the cost of the funeral as well as pay off any specific obligations or debts. Thinking ahead to one’s death is not something that many people like to do, but thinking about one’s death and leaving their loved ones to pick up the high cost of a funeral is a worse thought. That is what funeral insurance is for, it protects your family’s future by covering the cost of the funeral, eliminating the financial surprise that can occur.

Funeral insurance is generally associated with a permanent type of insurance policy like a whole life insurance policy. The average person pays between $30 and $40 each month, but there is no standard type of funeral insurance. Funeral insurance describes any insurance policy that provides final expenses. The amount of the funeral insurance coverage all dependents on how much you want the final expenses to cost. There are a few different types of traditional whole life insurance polices or agreements that only cover funeral expenses.

On type is life insurance with family member beneficiaries. Many people who have traditional lie insurance just purchase enough to cover the cost of the funeral expenses. But if you do not have life insurance you can purchase life insurance with the intention of using the proceeds to cover funeral expense. You can name a family member as your beneficiary and discuss your funeral plan with them.

Another option is to list the funeral director as the beneficiary. A funeral home may include a small whole life policy with a contract for funeral services, with the requirement that the director is a beneficiary on a policy. This allows you to pay for part of all your funeral expenses using the life insurance policy that you pay for and the death benefit goes to the funeral home directly, not your family.

Lastly there is the pre-need contract with the funeral home option. This often covers the cost of a burial plot, grave marker, casket and flowers for the funeral. Some polices may not specify what the death benefit can be used for. The money can be used as needed; there are no defined limits.

Depending on the type of policy, you can either have one lump-sum payment or can continue paying monthly payment. There are single premium payment options that provide coverage once the lump sum is paid. There is graded death benefit option, which means the coverage amount increases over time. You chose a five-year payment policy. The death benefit is 30 percent of the face amount in the first year, 70 in the second and 100 percent thereafter.

If you are considering funeral insurance you need to determine whether your life insurance policy or other savings may be used for funeral expenses. Your local independent insurance agent will know the state-specific laws that exist, so it is important to discuss funeral insurance coverage with them.

More information on term life insurance >

Other Enhanced Insurance articles related to Funeral Insurance:

Funeral and Burial Coverage

Life Insurance and Funeral Potatoes

Final Expense Insurance

Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.

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