Burial policies for seniors are also called burial insurance, funeral insurance, and final expense insurance. Paying for funeral expenses is the primary reason why most seniors purchase these policies. Burial policies for seniors refer to small whole life insurance policies that cover the cost of burial and funeral expenses.
According to the National Funeral Directors Association, the average cost of a funeral was $8,508 in 2017, and it has the potential to reach $10,000.
Paying for a funeral a tremendous amount of money that could cause significant stress to the loved one left behind.
Burial insurance for seniors is the solution so that the surviving family doesn’t have to handle the financial aspect of the funeral. Funeral insurance can help protect the loved ones from unexpected cost and debts associated with the funeral and burial.
If you’re looking for burial insurance or funeral insurance for seniors, this article is for you. We will try to answer many of the common questions regarding burial policies for seniors as well as provide information that will be important for anyone trying to buy this type of coverage.
WHAT IS BURIAL INSURANCE?
You may see burial insurance referred to as funeral insurance, final expense insurance, or even burial policies for seniors. All these names for burial insurance refer to a whole life insurance policy that has been designed for seniors or older people and families to cover the final expenses.
Final expenses are various costs that arise after a family member dies.
Burial insurance is very easy to purchase. Insurance companies generally offer this kind of policy to people age 50 to 80 or even 85. There are only a few health questions asked during applications.
Some guaranteed acceptance policies won’t even ask any health questions.
The death benefits are relatively modest compared with traditional life insurance policies to keep the premiums affordable for many seniors or their families. You can usually select a death benefit from $2,000 to $25,000 although some insurers will offer higher face value.
Funeral insurance offers beneficiaries a cash benefit that they can decide how to use after the insured dies.
The beneficiary can use the cash to pay for medical bills, debts, funeral costs, and final expenses. If there’s some left over, folks can use it in any way they see fit. In this way, the burial policy can fund final expenses as well as leave a small legacy to children, grandchildren, or a surviving spouse.
WHAT DO YOU NEED TO CONSIDER BEFORE BUYING BURIAL INSURANCE
By this time we already know why burial insurance is essential. Before you go ahead and start searching the internet for the best burial policies and companies, sit down and take some time to consider what you need from your policy.
First, you need to think about how much coverage you need.
To determine how much coverage you need, you have to decide whether you want to be buried or cremated. Your decision will significantly affect your policy because of the difference in cost between the two.
Other costs you need to consider would be the location of the burial, funeral service, memorial service, casket, vault, flowers, markers, arrangement for the wake and others. From these expenses, you can see why funerals are expensive, and why having funeral insurance is essential.
Talking about death can be awkward, but you should sit with family members to discuss your options. Once you get all the details sorted you and your family will have a better understating of what sort of coverage you need.
BURIAL POLICIES FOR SENIORS
Simplified Issue Life Insurance – Level Benefit Plans
The underwriting process has been simplified compared to full life insurance where you are required to have a medical exam.
Instead, you are asked to answer few health questions to get an overview of your health condition.
You may be asked:
- Are you currently in a nursing home?
- Have you been diagnosed with a terminal illness?
- Do you suffer from Alzheimer’s or dementia?
In general health issues such as high cholesterol or any other minor health problems are fine.
The objective of asking health questions is to determine if you’re a high-risk life insurance client, like those with cancer or heart disease.
Simplified Issue whole life insurance is a true burial insurance policy that you can buy from age 45 to 80.
The monthly premium is leveled which means it will not change through the life of the policy.
Also, there is no waiting period.
This policy provides full death benefits when the policy is issued. If the insured dies after the policy was approved, 100% of the death benefit will be given to the beneficiary.
Guaranteed Issue Life insurance – Graded Benefit Plans
There is no medical exam, or any health questions ask with this policy. It has guaranteed approval which is best for people with severe health conditions. There is a waiting period before the death benefit that typically occurs after 24 months.
If you die before the waiting period, your beneficiary would not receive the full death benefit but would receive all premiums paid plus 10%. In graded benefit policy the benefits are provided in steps.
What features are available for burial policy waiting periods & payouts?
- No waiting period – This is the preferred option for all funeral funding and burial plans, as it gives you immediate coverage with 100% payout of the funds from day one.
- Partial waiting period – These plans give you immediate partial coverage. The first 12 months of coverage will be 30 to 40% of the face amount, the following 13 to 24 months will be 60 to 70% of the face amount, and after 24 months you will have 100% coverage.
- Two-year waiting period (or Modified waiting period) – The best plans offer immediate coverage if accidental death occurs, a return of premiums, 8 to 10% interest on these premiums if a death occurs in the first 24 months and a guaranteed payout of funds after 24 months.
All insurance companies have different eligibility and waiting period criteria. Here is one example of insurance companies waiting period:
BEST FEATURES OF BURIAL POLICIES FOR SENIORS
- Instant approval – There is fast approval for final expense insurance for seniors. The longest time you will ever wait for the application to be approved is just a few business days, but most insurance companies offer instant approval.
- Lenient underwriting – Seniors with pre-existing conditions may still qualify for guaranteed acceptance policy. There are relaxed underwriting requirements and only a few health questions are asked of the applicants. There are even no health questions asked to qualify for guaranteed issue life insurance.
- No medical exam – All funeral insurance companies will not require you to undergo a medical exam. The application process is simplified. That means you only need to answer health question and don’t even ask for it.
- No health questions – Some burial insurance policies for seniors do not ask health questions. Guaranteed acceptance policies are best for people with severe health conditions.
- The coverage is permanent – Burial policies for seniors are whole life policies that are locked in for the duration of the policy. You are covered for life, and the coverage cannot decrease, it does not expire at any age. The premiums are leveled and do not increase.
- It has a cash value component – Burial insurance policies for seniors are a whole life which has a cash value that grows over time. The cash value can be used to pay for premiums it acts as a safety net to ensure the policy never lapse from nonpayment.
- Fast payout – There is a quicker claims payout with burial insurance for seniors. The claim will be paid within a week once the proper paperwork is received.
- Small value options – Burial policies for seniors are offered in small face value. You can buy as little as $1,000, so you can buy as much or as little as you need.
- Portability – The payout for funeral insurance for seniors is in cash upon the death of the insured. The beneficiary will receive the full face amount of the policy, and they can use it as a final expense.
- Many insurance company options – There are many carriers offering burial policies for seniors. More and more insurance companies are offering insurance because more than 10,000 people are turning 65 each day. All of those are competing for your business which drives the prices of premium down.
WHAT DOES A BURIAL INSURANCE POLICY COVER?
Burial policies for seniors provide cash when an insured person’s life ends. The cash benefit is paid upon death depending on the terms of the policy when it was purchased.
Seniors buy a funeral insurance policy to cover the cost of a funeral service, memorial service, gravesite or cremation facility. The most important feature of these policies is that there is no rule on how the money can be spent.
The policy beneficiary is typically the person who will be responsible to carry out the final plans.
Some things need to be covered by the burial insurance policy these include:
- Loss of income
- Travel allowance and accommodation for loved ones from other places
- Food for the house funeral guest
CHOOSING THE RIGHT COVERAGE AMOUNT
Selecting the amount of coverage for funeral insurance for seniors can be best done after assessing the current prices on the market for everything that will be needed for the funeral.
You should also consider the other cost that may be incurred such as medical bills, any outstanding debts and you must give room for unexpected expenses.
If your main objective is to simply pay for the final expenses such as funeral service, cremation or burial, and memorial service, then you need to visit your nearest funeral home to get an idea how much money you will need.
Here are some average costs from the National Funeral Directors’ Association:
- Full-service Funeral – Vault, and Burial – $8,500
- Full-service Funeral and Cremation – $6,000
- Direct Cremation and Urn – $2,000
- Memorial Service (Varies)
WHAT SERVICES ARE INCLUDED FOR A STANDARD BURIAL COVERAGE POLICY?
Generally, the items covered by a standard burial policy for seniors are the following:
- Service Fees
- Facilities cost
- Funeral staff fees
- Embalming costs or Cremation costs
- Casket or urn
- Burial plot
- Digging and filling of the grave
- Funeral hearse
TYPES OF BURIAL INSURANCE COVERAGE
A prepaid funeral can be paid in advance without the funeral details being completed. Family members may fulfill the details for arrangements later on.
If you know exactly what you want at your funeral, you can have it all arranged and paid for. The funeral service manager provides the details of the cost. The cost which is planned in advance remains the same, it is not affected by inflation even if the funeral is years away.
Burial Insurance provides peace of mind to the family knowing the final expenses is paid for.
You will have peace of mind knowing your family members won’t have to worry about finding money to pay for your final expenses when you die.
Since you’ll already have the arrangement in place, your family doesn’t have to guess about your last wishes.
Some drawbacks with pre-paid coverage include the issue with flexibility with this type of policy. Some options can’t be transferable, and refunds may not be available.
A pre-paid funeral plan is also tied to a particular funeral parlor; you can’t pay the final expense on the way you want.
A pre-need burial policy allows all details to be confirmed in the future. Instead of making the funeral plans now, the policyholder can make the decisions with their family later on.
This plan gives you the extra time to make up your mind about the funeral arrangements. Payment for this type of funeral coverage is made at the time of death. It can be paid for in cash by family members through other means.
The downside to this funeral coverage is the lack of payment at the time when the policy begins. Instead of getting the payments right away, payments must be paid at the time of death. It means the cost will be higher from the start of the policy to the date of the funeral.
With regular burial insurance, the final expenses will be covered at the time of death.
COST OF BURIAL POLICIES FOR SENIORS
Burial policies for seniors pay for final expenses.
A senior in their 60s to 85 will be able to get coverage in most cases.
The overall cost of your burial insurance plan will depend on the following:
- What type of policy you choose either simplified issue or guaranteed acceptance.
- The face amount you have chosen
- The insurance provider
- Tobacco use
- Health condition
What kind of burial policies should I avoid?
TV AND MAGAZINE ADVERTISEMENTS – Most burial policies or final expense policies you see advertised on television or in magazines are sold as “the no-brainer way” to shop for this protection.
In reality, most of these policies rely on you having NO BRAIN to purchase them.
Just about everyone is eligible for immediate coverage and better pricing allowed by these heavily advertised policies that cost an arm and leg.
To make a long story short, it is better to shop for burial policies for seniors with a specialist in burial insurance, like FuneralFunds.com, than to sign up with a company that spends ba-zillions of dollars each month advertising on television and in magazines.
Increasing Price Policies
Those TV and magazine final expense policies may increase in price every five years or have a two-year waiting period before your benefits kick in! What in tarnation!?!
These policies aren’t all they’re cracked up to be, and you often end up at the short end of the stick by purchasing burial insurance this way.
These tricky television magazine snake oil salesmen lure you in with an attractive rate, only to have the cost of your insurance increase every five years until you cannot afford the premiums, then you must cancel your policy.
What happens after you cancel the policy? You’ll die and will have wasted all that money because you bought a policy that increases in price as you get older. These policies just don’t cut the mustard for most folks!
Avoid policies that increase in price every year or end at a certain age. You don’t want your family to get hung out to dry when they need this coverage the most.
Why choose Funeral Funds for my burial policy?
Most life insurance agents are fine, respectable people.
There are, however, the classic “snake oil” life insurance agents, who will sell you the easiest and most expensive policy possible.
The guaranteed issue folks claim you don’t even need to talk to an agent (but you will need to wait 2 years for your coverage to begin…even if you’re healthy). Answering a few health questions will often get you immediate coverage and MUCH BETTER RATES.
Avoid these people at all costs!
For the rest of the life insurance agents, who are fine respectable people, they are most often generalists.
They deal with all kinds of life insurance policies.
They are Jack of all trades and Masters of none.
They are nice people, but they are not the logical choice if you want the best pricing and a burial insurance policy with no waiting period.
We work with 20+ final expense companies, so we can get you qualified for the best price plan with the intent of getting folks like you immediate coverage when possible.
We have to admit that, for the average burial insurance final expense insurance shopper, all the companies and options will often leave you more confused than a woodpecker in a concrete forest.
How can Funeral Funds help me?
The reality is that inexperienced and less knowledgeable insurance agents will cost you loads of money by selling you overpriced burial and final expense policies.
Getting affordable burial policies for seniors doesn’t have to cost an arm and a leg.
Our job at Funeral Funds is to be the most knowledgeable burial insurance experts available. By doing so, we can knock it out of the park and get you the most accurate quote and affordable rates.
Once we know more about your age and health history, we can accurately give you burial insurance quotes from the final expense companies that are the best fit for you.
It is always in your best interest to work with an independent brokerage, such as Funeral Funds.
With access to all the best final expense insurance companies, we will help you understand your best options, given your current age, health, and financial situation.