It is important for you to understand the importance of burial insurance so that you can leave your family with peace of mind knowing they will not suffer financially after you pass on. Burial insurance guards against financial hardships by providing cash for all cost associated with the funeral and burial.
Without burial insurance, most families will have a hard time coming up with burial and funeral funds quickly. Burial insurance can save families from having to withdraw from their savings or sell assets to come up with the necessary funds to bury a loved one.
Burial insurance is all the more critical today since more and more people are entering into their elderly years and approaching retirement with insufficient funds. The need for burial insurance is more crucial now than ever. If you’re wondering if burial insurance is right for you, we will help shed light. The goal of this article is to shed some light on the significant benefits of burial insurance and why we need some.
WHAT IS BURIAL INSURANCE?
Burial insurance also called funeral insurance, or final expense insurance.
Burial insurance is a whole life insurance policy designed to cover the cost of funeral service, burial, and other outstanding bills.
Burial insurance is a permanent plan that is designed to last a lifetime. It is NOT a term life insurance policy or a policy that EXPIRES at age 80. Be careful because some insurance companies like AARP and Globe Life will try to sell you term life insurance plans but they market it as burial insurance.
Once you pass away, the burial insurance company will mail a tax-free check directly to your beneficiary. There are no restrictions on how the death benefit payout money can be used. If there is anything left over after the final expenses have been paid, the money will stay with your family to use however they see fit.
Benefits of Burial Insurance:
- It never expires due to age. They last a lifetime.
- Monthly premiums are fixed. They can never increase for any reason
- The death benefit is level. It is guaranteed never to decrease
- No medical exam required as part of the application
- Small face value options
WHO CAN APPLY FOR BURIAL INSURANCE POLICY?
Anyone who is 0-89 can apply for burial insurance. Few factors determine burial insurance eligibility such as:
- Age: Some plans are not available to all ages.
- State of Residence: Some burial insurance plans are not approved in every state.
- Health: You must qualify based on health, however, some plans have no questions at all.
The most common age of availability is 50-85. Your options will vary depending on your health, your state of residence, and if you are younger than 50 or older than 85
WHO NEEDS BURIAL INSURANCE?
People in these situations need burial insurance:
- Those who have no life insurance coverage.
- Those whose savings are not enough to cover the cost of a funeral.
- Those whose family and friends do not have the financial capacity to cover the cost of funeral and burial expense.
- Those who have outstanding debt.
- Those who don’t want to burden his family when they pass away.
- Those who want a separate insurance policy to cover his final expenses.
- Those who are paying off medical bills or debts
- Those who have cash but would prefer it not to be used for final expenses.
- Those who want to leave a charitable donation to an organization or person important to them.
BURIAL INSURANCE IS UNIQUE IN THREE DIFFERENT WAYS:
#1 – Relaxed underwriting
One of the unique characteristics of burial insurance is the relaxed underwriting. Most of the health conditions accepted by burial insurance would get auto declined for any traditional life insurance policies.
Relaxed underwriting enables most seniors with high-risk conditions to easily qualify for a policy.
#2 – No Health questions policies
Even though burial insurance has relaxed underwriting, some health conditions are so risky they are classified as uninsurable. For these high-risk health conditions, there is a guaranteed issue policy with no exam and no health questions.
Applicants are guaranteed acceptance regardless of medical conditions!
#3 – Low face value options
Some burial insurance companies will let you purchase as little as $1,000 in coverage; no other type of life insurance will let you buy such a small amount of protection.
Most companies offer face value options from $2,000-$25,000. Some carriers go lower, and some go higher, but you have the freedom to buy what you need.
DIFFERENT TYPES OF BURIAL INSURANCE
You can either apply for a non-medical burial insurance plan that has a brief medical and prescription records check, or you can apply for a burial insurance plan that asks no health questions.
A policy with no health questions is called guaranteed acceptance life insurance. Non-medical exam burial insurance policies fall into three different plans. Which one you can qualify for depends on your health.
Every insurance carrier will ask different health questions, after that they will electronically analyze your prescription history to verify your health status.
Here are the three plans for underwritten burial insurance:
You’ll qualify for level benefit plan if you say “no” to all the health questions asked.
You are covered immediately upon approval and first payment, and your beneficiary will receive the full death benefit if you pass away. There will be no waiting period if you are approved for this plan.
A level death benefit is the best possible rating you can receive. You will be able to access the insurer’s lowest possible rate. Some insurance companies use the word “preferred” instead of level to describe their best rating.
A graded plan is a medium option where the insurer views your health profile as riskier.
You would get this plan if you said yes to some of the health questions. You will be charged anywhere from 15-40% more for your policy. Graded plans provide partial coverage during the first two years of the policy. The life insurance benefit will pay out a reduced basis for the first two years.
For example: If you have a $10,000 death benefit, many companies will pay out 30% of the 10,000 if you die in the first year, 70% in the second year and 100% after two years. Different insurance companies have different payout schedules; it is important to read the fine print to understand your policy details before making any purchase.
A modified plan is the highest risk plan, and the company charges 15-50% more on your premiums. They will offer this plan if you answer yes to the health issues in the “modified” section. Events like stroke, heart attacks, or cancer within the last year will put you in modified benefit.
There is a two-year waiting period. If you pass away during this time, the insurance company will not pay out the full benefit of your policy. Instead, they will return 110% of your money. Modified plans return premiums plus 10% interest during the first two years. However, if you die from an accident, they would pay out the full death benefit.
Guaranteed Acceptance Burial Insurance
Even though burial insurance has a lenient underwriting, some medical conditions are so risky they are considered uninsurable for coverage in the first two years. Guaranteed acceptance is the only option. If there is no such plan available, people with these health conditions will not get coverage at all.
These are plans have no medical exam and no health questions. Your approval is guaranteed if you satisfy the age requirement.
Guaranteed acceptance has a two-year waiting period. If you die during the first two years, the insurer will only refund the premiums paid plus 7-10% interest. Since the insurance carrier is taking more risk, they charge more to compensate for the increased risk.
A Guaranteed acceptance policy is your only option if you have any of the following health issues:
- Alzheimer’s or Dementia
- Currently in a hospital or nursing facility
- HIV or AIDS
- Hospice Care
- Terminal Illness
- Recommended to have an organ transplant
WHAT ARE THE COMMON BURIAL INSURANCE UNDERWRITING QUESTIONS?
These are the most common questions asked when applying for burial insurance:
- Are you currently confined to a bed, assisted living facility or nursing home?
- Are you dependent on a wheelchair?
- Are you terminally ill?
- Are you using oxygen to assist your breathing?
- Have you been treated for heart attack or stroke in the last 12-24 months?
- Do you have any an aneurysm that has not yet been repaired?
- Do you have cardiomyopathy or congestive heart failure?
- Are you currently receiving dialysis treatment?
- Have you been diagnosed with kidney disease?
- Do you have liver disease?
- Are you diabetic? Are you Insulin-dependent or on an oral medication?
- Have you been treated for any type of cancer in the last 12-24 months?
- Do you have AIDS or HIV?
- Have you ever been diagnosed with dementia or Alzheimer’s disease?
- Have you been convicted of a felony?
WHAT IS THE COST OF BURIAL INSURANCE?
Generally, the younger you are the less burial insurance will cost. Different factors such as determine the cost of burial insurance
- Face Amount
- Health history
- State of residence
- Tobacco usage
The average monthly premium for a $10,000 burial insurance is about $50 per month. The amount might be higher or lower depending on the different factors.
If you want to get a custom quote, fill out our instant BURIAL INSURANCE QUOTE form on this page
WHY IS BURIAL INSURANCE IMPORTANT?
- Burial insurance is more affordable than a pre-paid funeral arrangement. You will only need to make a low monthly payment for lifetime insurance coverage.
- Most people will qualify for coverage because there are no medical exams required for approval. You will only need to answer a few health questions.
- Burial insurance allows you to select a beneficiary. You can choose your partner or a relative as your beneficiary to ensure your funeral wishes are carried out and funds are properly distributed.
- Burial insurance has a fixed premium which is guaranteed to never increase due to health or advancing years. The death benefit is level and guaranteed never to decrease as long as premiums are paid on time.
- Burial insurance covers all cost related to your funeral and burial or cremation. Your plan will help your family pay for the coffin, memorial service, headstone, and even all of the small details like the flowers.
- While burial insurance policy is designed to help pay for the final expenses, any leftover money from the payout can also be used to help take care of any debts such as car loan and credit card debt that you may leave behind.
- Burial insurance is portable. You can use the insurance payout at any location. It is not fixed to a particular funeral home. It is particularly useful if you’ve moved to a new location and you’ve changed your mind on final disposition and funeral preferences.
- You have full control and ownership of your policy. The funeral home is not the beneficiary of the policy. If you find a funeral home that cost less than the originally planned, your beneficiary will get the difference. The remaining death benefit would remain with your family to use as they please.
- You can borrow against the tax-deferred cash value of your burial insurance. It means that aside from preparing for your family’s financial future, you also have an available line of credit in case of emergency.
- Burial insurance is flexible. Its flexibility extends to your choice of funeral service providers. You can allocate funds without being tied to a particular funeral home. Burial insurance leaves your options open, and this is a great benefit given the length of time that will pass between choosing a provider and using the policy.
INTANGIBLE BENEFITS OF BURIAL INSURANCE
The reasons for choosing burial insurance are not purely financial. Time, energy and peace of mind and other things can play a big part to say that the plan is right for you.
Ease the financial burden for grieving loved ones. Planning and paying for a funeral is a final expression of love for the family. When you choose to invest in burial insurance, you are ensuring that your family will face grief without the extra burden of paying for the funeral.
Buying burial insurance will allow yourself to think over what you really want. Financial decisions surrounding the eventuality of your death are never easy. Purchasing burial insurance in advance gives you the time to find the options that suit your needs by planning ahead.
Be at peace knowing your funeral will represent your personality. When you buy burial insurance, you can plan ahead to make your ceremony reflect who you really are. You can discuss your wishes with your beneficiary so that your service will be what you really wanted.
Give your family immediate funds dedicated to covering your final expenses. Burial insurance doesn’t go to probate, and your family will have the funds to pay for your funeral. Burial insurance makes money immediately available so your loved one won’t have to pay out of their pocket.
WHAT YOU SHOULD KNOW ABOUT PREPAID FUNERAL PLANS OFFERED BY FUNERAL HOMES
- You can plan your funeral service in advance, leaving no doubt to your family about what you really wanted.
- Paying up front without using a payment plan is possible.
- Prepaid funeral plans are contracts with a specific funeral home. You are limited to the geographical boundaries of that particular company’s service area.
- If your plans change or you moved away from the area where you bought your prepaid plan, you may not be covered.
- Many expenses may not be covered in the prepaid plan. You’ll need to review your prepaid contract before agreeing to them carefully. You might even need to hire a lawyer to help you.
- Due to market fluctuations, the goods and services you select for your prepaid plan may not be fixed, so it’s important to be clear on whether prices are guaranteed – if they aren’t, your family will be responsible for paying the difference.
- Your family may be responsible for paying taxes on income or interest that accrues on the invested funds.
- It’s common for funeral homes to mishandle or mismanage the money you pay them for your prepaid plan. Be sure to trust an established company before purchasing a prepaid plan.
- You are not forced to buy a funeral package that includes goods or services you do not need. You are not forced to buy everything through your prepaid provider. Embalming, coffin and memorial service can be purchased separately if you find a better price through another vendor.
- You have several rights and disclosures according to the Federal Trade Commission’s Funeral Rule. You should be aware that some aspects of prepaid funeral contracts fall within the jurisdiction of the state, and the rule may not apply to these parts. Your protection varies from state to state.
- The Funeral Rule mandates that a funeral home must provide you with written explanations of services that are required by law.
- The Federal Trade Commission recommends you approach prepaid funeral purchases that way you would treat any other large purchase – by shopping around and comparing prices between at least two funeral homes.
HOW TO APPLY FOR BURIAL INSURANCE?
Step 1: Look for an Independent Life Insurance Agency
Look for an independent life insurance agency life Funeral Funds on the internet. Finding an independent agent is a crucial step in the application process. An Independent agency can navigate the various insurance carriers based on the underwriting requirement, and they can find the most affordable plan for you.
Step 2: Choose your burial insurance plan from A-rated Company
Burial insurance can be purchased from many different companies. Make sure the company is A-rated or better. A good financial rating indicates that the company is financially stable and has a history of paying beneficiaries on time.
Step 3: Answer the health questions and complete the phone interview
Fill out the burial application with your agent. Most burial insurance carriers require a compliance interview to ensure the agent covered all the required details and you have answered all questions.
The insurance company will then run a medical background check through the MIB and perform prescription medication check. This makes sure the answers to your health questions are the same as what is in your medical records.
The phone interview with the underwriter usually takes about 15 minutes, and you’ll have approval or decline after the call.
Step 4: Choose how to pay your premiums
Burial insurance can be paid in different ways:
- Direct Monthly Bill
- Direct Quarterly Bill
- Monthly EFT or direct withdrawal from your bank (this is the preferred method)
- Credit or Debit card
You are not required to pay your first premium the same day you sign up for the burial insurance. You can choose any day of the month. You are allowed to select the future date of your initial payments by up to 30 days.
Step 5: Receive the policy
Insurance companies are prompt in delivering burial insurance policies. One of the significant differences between traditional life insurance and burial insurance is that most burial insurance companies send policies directly to your home instead of requiring your agent to complete the delivery.
Step 6: Explain your end-of-life plans to your beneficiary
Communicating your plans to your assigned beneficiary is essential. Make sure your family knows about the policy and where it is located. Most burial insurance companies offer free final wishes and request booklets which allows you to outline the details of your end-of-life plan.
DIFFERENT WAYS TO COMPLETE AND SUBMIT YOUR BURIAL INSURANCE APPLICATION
The application process varies by company, but it will be in one of the following ways:
Voice Signature: You and your agent will complete a phone interview with the insurance company. The application is accomplished in minutes using your voice.
There’s no paperwork to sign. All voice signatures will give an immediate decision regarding your approval on that phone call.
Paper Application: Sometimes a paper application via snail mail is necessary. Your agent will completely fill out the application form.
Then the papers will be sent to your address. You sign the documents and send them back to the office. A decision will be reached in 1-4 business days.
Email Signature: Your agent will collect all your information to completely fill out the application. Then the insurance company will send you an email to sign the application with a click of a few buttons.
You can sign using your phone, tablet, laptop or PC. Once you sign the application, it goes to underwriting. Some insurance companies will give an immediate decision, and some may take 1-4 business days before reaching a decision.
HOW TO FIND THE BEST BURIAL INSURANCE POLICY
The best burial insurance policy for you is the one that is affordable that protects you as soon as possible.
The process of finding the best and most affordable policy is simple. You need the help of a highly experienced independent agent that has access to many insurance companies. They will shop and compare prices for you to determine the insurer that will offer you the best deal.
By using an independent agency like the Funeral Fund, you will be assured the best pricing and coverage for your age and health.
Call us at (888)862-9456 if you want to protect your family’s future by investing in a burial insurance policy. We will help you find the best plan that will meet your needs and budget.
Need burial insurance? Instead of wasting hours talking to different agents answering the same questions over and over again, let us do the work for you to find affordable burial insurance.
Fill out the instant QUOTE form on this page and we will give you the best rates available for final expense life insurance.
Funeral Funds is an independent insurance agency that can shop your application to many companies available. This way you can be sure that you are going to get the best carrier that favors your age and health.
We work with the top-rated life insurance companies in the United States, many of which offer immediate coverage with the lowest rates.
If you need help finding burial life insurance, please don’t hesitate to contact us at (888) 862-9456.