The cost of an average funeral can cost an arm and leg if you do not have a burial insurance policy to cover it. Funerals are expensive, so you probably want to know how much does burial insurance cost. Understanding how much is needed to provide your loved one the funeral they deserve is vital to choosing the amount of burial insurance you need. Since you understand the importance of burial insurance to provide peace of mind when you pass away, it’s often just a matter of finding something that fits your budget.
The average cost of a funeral is increasing every year. The increasing cost can leave you short of money to pay for proper burial expenses if you don’t have insurance.
The median cost of a funeral with viewing and burial is estimated to be $8,755 according to the National Funeral Directors Association. This price range includes the metal casket, services of the funeral home, hearse, and vault.
With the average cost of funeral services rising each year, you can choose to pay for the kind of funeral service you want by purchasing affordable burial insurance. By having burial insurance coverage, you can make sure that at the time of your death your family members will be provided with enough money to pay for your final expenses.
In this article, you will learn about burial insurance and how much does a burial policy cost.
WHAT IS BURIAL INSURANCE?
Final expense insurance is a form of whole life insurance that provides funds for the cost of burial, funeral, and other end-of-life expenses.
The face amount of this coverage is often smaller with proceeds usually ranging between $5,000 and $50,000 per policy. Policyholders are allowed to make manageable monthly payments – which can be convenient for seniors who are living on a fixed income.
Some funeral expenses that burial insurance may cover include:
- Cost of embalming
- Cost of cremation
- Digging and filling of the grave
- Cost of the plot
- Service car
- Funeral director services
Burial insurance policies are whole life insurance, and this is how they work:
- It is permanent; it does not expire due to age
- The premium rate is fixed for life, and cannot increase
- The death benefit can’t decrease for any reason
- The policy is not cancelable as long as premiums are paid
- Builds cash value that you can borrow from
ADVANTAGES OF GUARANTEED COVERAGE BURIAL INSURANCE
Guaranteed acceptance – every applicant will be approved regardless of any medical condition. Burial insurance is particularly beneficial to people with:
- Alzheimer’s disease
- End-stage renal failure
- Organ transplants
- Terminal illness
- Chronic illness
- AIDS or HIV
No medical exam – guaranteed issue life insurance policies will never require you to undergo a medical exam or answer health-related questions as part of the application process.
Low face amount options – if you’re only interested in buying little coverage to take care of your final expense, burial insurance will allow you to do that. You can buy as low as $2,000 in coverage with some companies.
Cash paid directly to your beneficiary – once you pass away, the insurance company will pay out the total death benefit to your beneficiary. If there is some money left over after the funeral expenses your beneficiary can use it anyway they like.
DISADVANTAGES OF GUARANTEED COVERAGE BURIAL INSURANCE
Waiting period – all guaranteed issue policies come with a two-year waiting period. In case you die during the waiting period, the insurance company will refund all premiums paid plus interest.
Graded death benefit – the beneficiary is paid a percentage of the death benefit if the policyholder dies during the first two years of the policy. Example: for the first year 30% death benefit will be paid, 70% the second year, and 100% the third year.
WHAT IF MY HEALTH IS GOOD, OR EVEN KIND OF BAD?
Read our “what kind of policies to avoid” section near the end of this post. You should only purchase a guaranteed issue burial policy if you have major health problems. This is because all of these policies are more expensive and require a mandatory 2 year waiting period before your benefits are paid due to illness or terminal disease.
95% of the people we talk to will qualify for better pricing and plans by answering a few health questions. You don’t have to visit a doctor or nurse to get approved for these better plans. We will help you get qualified lickety-split!
WHY PURCHASE BURIAL INSURANCE
If you don’t like the idea of purchasing burial insurance before, there are good reasons why you should consider it now.
The rising cost of funerals: Funeral costs have dramatically increased over the past decade.
Not too long ago, the typical cost of a funeral was around $6,000. Today the average cost of final expenses has climbed to almost $9,000, and it is expected to continue to increase. For most families, the burden of having to pay $9,000 for funeral expenses can be too much. You can help eliminate much of the financial hardship of paying for funeral expenses by purchasing burial insurance before your death.
Affordability: Burial insurance is far less expensive compared with traditional life insurance policies. The face amounts are often smaller. This makes the monthly premiums more affordable and easy on your budget (particularly for retirees on a fixed income).
Fewer restrictions: Burial insurance is designed to cover final expenses; it is easier to obtain by more seniors above the age of 80. There is no medical exam with these policies. Even if you have medical problems, you can answer some health questions to get even better rates.
WHEN DO YOU NEED BURIAL INSURANCE?
Your burial insurance needs depend on your financial situation.
You specifically need burial insurance if:
- You have no life insurance coverage.
- Your savings don’t have enough to cover the cost of a funeral.
- You have outstanding debt.
- Your family and friends do not have the financial capacity to cover the cost of our burial and funeral expense
- You don’t want your family to be burdened when you pass away.
- You want a separate permanent insurance policy to cover your final expenses.
Burial insurance policy provides the necessary funds to ensure your family does not have to use their own money to pay off your funeral expenses. These insurance policies pay cash directly to your beneficiary to pay for your funeral services.
HOW MUCH DOES BURIAL INSURANCE COST?
Burial insurance policies can be purchased in the $5,000 to $25,000 range although some companies offer up to $50,000.
Your burial insurance cost can vary depending on the companies that offer the policy. Some factors that affect the price include:
Advertising: Some companies spend heavily on advertising their products on television, radio, newspapers and the internet. These policies are often Guaranteed Issue policies with a two-year wait and more expensive pricing. These companies are more likely to have a higher cost compared with a company that is not spending more money in advertisements.
Overhead: The cost of overhead affects the cost of products and services. Insurance companies that pay higher agent commissions will have higher premiums than companies that pay lower agent commissions.
The average cost of whole life insurance per month is approximately $25, and the most common face amount purchased is $10,000. Your specific premium rate might be higher or lower depending on your age, gender, health when you apply, tobacco use, and the face amount of the policy you choose.
How much does burial insurance cost for your current age? Every burial insurance company has a set amount of premium for each specific age.
Most companies will offer life insurance rate by age (example: age 60, then age 61 and so on).
However, some companies set the premium according to age bracket. Typically, each age bracket is in the increment of 5 years. For example, they have one price for people who are 55-60 years old, or age 65-70.
Most life insurance policies will have an annual premium rate difference of 8% to 10% for each year of age. Waiting a year to purchase a life insurance policy may mean a significant increase in monthly premiums. The reason for this increase each year is because each additional year is getting you closer to your life expectancy.
Being male or female also determines the cost of a burial insurance plan.
Look at the life insurance premium chart below, and you will see that life insurance is more expensive for men than for women. Men always pay more than women because on average women live longer than men. The average life expectancy of women is 83.5 years while men 79.5 years. Women live 5% longer than men.
Final expense life insurance rates are based on life expectancy, and since life expectancy is longer for women than it is for men, life insurance premiums are lower for women. Since men are expected to pass away several years sooner than women, men are considered a higher risk to life insurance companies than women and they will pay more premiums for the same age.
Health is another qualifying factor for the average price of life insurance.
The older you get, the more likely you will have some health problems. The more health issues you have, the more it will affect your rate. With term life insurance, it’s essential to get any health issues like high cholesterol and diabetes managed before applying for life insurance coverage to get a competitive rate. This is not the case with burial policies, as the underwriting is much more flexible than term life policies.
Your health will determine which risk classification you will be under.
Insurance companies usually use words like Preferred or Level to describe their best rating with term life insurance. People who are in perfect health qualify for this rating.
Graded or Level are used to describe ratings for burial policies. People who are in good health will qualify for level ratings. Modified are used to describe the more expensive ratings for people with significant health issues.
Burial insurance companies typically have one price for non-tobacco users and higher amount of premium for those tobacco users. Tobacco users pay more for life insurance because of the health risk of smoking and shortened life expectancy.
Life insurance companies like any other company are in business to make money. For this reason, they want to insure people who are going to pay their premiums for a long time. Since smoking increases your chances of dying from various diseases, you are considered a higher risk to insure than someone who does not smoke.
The increased risk of dying makes it more expensive for tobacco users to purchase life insurance.
Policy type and amount of Coverage
How much your final expense insurance cost will largely depend on the choice of policy and the amount of coverage.
The longer the term and the larger the death benefit, the higher the premiums will be. To keep premiums down, only get as much coverage you need.
Consider how much you need to pay for your burial and other final expenses to determine how much burial insurance you need.
Here is one example of level coverage offered by Mutual of Omaha:
Mutual of Omaha Male Non-Smoker Rates
|Mutual of Omaha||50||55||60||65||70||75||80||85|
Mutual of Omaha Female Non-Smoker Rates
|Mutual of Omaha||50||55||60||65||70||75||80||85|
HOW MUCH BURIAL INSURANCE DO I NEED
The amount of burial insurance we need depends upon our final wishes. You should ask yourselves these questions to help you determine how much burial insurance you need:
- Do you want to be buried or cremated?
- Do you want to be embalmed?
- What kind of casket do you want?
- What type of headstone do you want?
- How far is the funeral home to your house?
- How many death certificates will your family need to close your estate?
- Would you have a viewing? How many days?
- What type of funeral home facilities will your family need to use?
- What kind of service will you use for transportation?
- How much allowance will you allot for other final expenses?
Request a general price list from your funeral home to determine how much each service cost. With that information, it is easy to determine how much burial insurance you need.
HOW TO GET BURIAL INSURANCE
After determining how much burial insurance you need, the next step is to figure out how you can get burial insurance. There are three ways to get burial insurance:
Getting burial insurance quotes from different companies is extremely easy online. The internet will give you different quotes you can review. There are various quote comparison tools you can find online. These tools work the same way:
- Find a burial insurance comparison tool.
- Enter the required field such as your gender, birthday, resident state and face amount.
- Choose your health class
- Study the quotes provided to know your best option.
- Call an independent agent to confirm your options over the phone.
- Wait for approval from the burial insurance company directly over the phone.
THROUGH THE MAIL
One way of applying for burial insurance is by signing up through an application letter you receive through the mail. This is a simple way to get your burial insurance policy, BUT be cautious because burial insurance sold through the mail may not be the best policy for you and your family.
Mail order burial insurance typically doesn’t require a medical exam or health questions. They usually offer guaranteed issue life insurance policies which are capped at $10,000-$15,000. These policies are useful if you have severe and life-threatening pre-existing medical conditions. If you are in fair to good health, you will pay much more for these policies than if you were to answer a few health questions.
If you’re getting burial insurance through the mail, make sure that it corresponds with your health condition. If you are moderately healthy to healthy, you will get cheaper burial insurance by calling us and answering a few medical questions.
Use our online burial insurance comparison tool to see your best rates and eligibility.
THROUGH A BURIAL INSURANCE AGENT
The other way to get burial insurance is to meet with a burial insurance agent face-to-face. Licensed life insurance agents will be able to tell you your options and help you find the best plan that fits your needs.
We think the easier way to get affordable coverage is to do it online and over the phone like the way we do it at Funeral Funds.
Determining how much burial insurance you need can be challenging. You need to take the time to talk to an independent agent to determine how much you need for coverage. Consult one of our agents at Funeral Funds to help you. Ask any questions regarding insurance coverage to ensure you are getting the best burial insurance plan for your family.
Making sure your family has the money to cover for your final expenses is the best gift you can give them to show how much you care for their financial well-being. Burial insurance is easy to apply for, and you can easily be accepted. Call us at (888) 862-9456, and we will help you shop to get the best burial insurance for your needs.
What kind of burial policies and final expense 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 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 on affordable burial or final expense policy 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.