Burial Insurance

Burial insurance policies are so individualized that there is almost nothing that you cannot include. The only way you can be limited is if you have a policy that is capped at a specific dollar amount. The largest player in the burial insurance market, Forethought Life Insurance Co., refuses to cover more than $25,000 worth of funeral expenses.

Below is a checklist of things you need to consider before you purchase burial insurance:

• You need to research your own state laws on preneed insurance.
• Before deciding on a burial insurance policy, make sure to discuss all of your options with your lawyer and your family to make sure that it lines up with your estate planning and will.
• Find out what percentage of the total plan value that you will actually received in benefits.
• Make sure to verify the license of everyone that you work with before signing a policy.
• Take advantage of “free look” laws that your state may have that allows you to review your policy before you are locked in.
• Make sure you get a written price list of available goods and services, as required by the Federal Trade Commission.
• Make sure you have a friend or family member with you to help you look through the paperwork.
• Never accept any documents that have been fully filled out and signed while you are not present.
• Just in case you move, make sure that your funeral arrangements can
  be moved to any funeral home.
• Ask if your particular state requires that you be able to cash out your burial benefits at any time.
• Your grave site should already be located by section, row, and plot number.
• The policy should specifically state the type of outer burial container that you have purchases. It will either be a grave liner or a vault. Also, as what it is made out of.
• The policy should also clearly state what kind of marker you purchased including size, material, and style. If you can, get a sketch,
• Find out what recourse you have if the cemetery runs out of cash and then defaults on your policy.
• Ask about what happens if your cemetery runs out of burial plots.
• Make sure you get at least one statement a year that details the status of you account.
• Find out what happens if you cancel your burial insurance. You maybe be reimbursed for products and services, but still be stuck with the burial plot.

Now that you have this information, use it to make sure you get the policy that is best for you.

It’s no secret that funeral costs are going up. According to the American Association of Retired Persons (AARP), funeral and burial expenses are actually one of the biggest purchases for Americas over the age of 65. In fact, the average cost of a funeral today can be anywhere from about $4,500-$5,500. One-third of that cost is just to cover the coffin! If you decide to have an in-ground burial then you can expect to pay another $2,400.

Since burial costs are still rising, even a $10,000 burial insurance policy purchased today may not pay the entire funeral bill when the time comes. In order to pay the price you may have to use funds from your major life insurance policy. Dean Lambert, the director of marketing for Homesteaders Life Co, says that this trend is becoming more frequent. “When that lump sum goes to the family, they will spend it on whatever they have to. They shouldn’t have to spend it all on the funeral, but that might be the case. If they are grieving, they may not make the most informed choices, perhaps spending more than they should”.

If you take a step back and look at the industry as a whole you will see why the preneed industry is not feeling the effects of the recession. Americans are getting older, the baby boomers are nearing the end of their lives and therefore there is a great demand for funeral related products and services. If you couple this with the fact that prices continue to increase for these goods and services, you can see how easy the industry has it. President of the Life Insurers Council, Bruce Dalzell, says, “More senior citizens have the money today for these expenses, and they are independent. They don’t want to leave this burden on their loved ones”.

An individual’s preferences play a huge role when determining coverage options. Burial insurance is very personal; there is no “one size fits all” option. Instead, you pick and choose the goods and services that you see fit. This leaves the choice up to you and not an insurance agent or funeral director. They are taken out of the decision making process and are just there to write up a policy that covers the things that you want.

Some of the common products and services available for purchase are:

• Grave marker
• Flowers
• The plot
• A casket or urn
• Embalming (not required by law unless there is a public viewing)
• Cremation
• Hearse and other burial vehicles
• Burial vault or grave liner
• Digging and filling the grave
  
  

In the next article in the series we will discuss a checklist that you need to go through before buying burial insurance.

Have you ever thought about what your funeral might be like? What sort of service would there be? Have you thought about the type of coffin that you would prefer?

While these questions may seem a bit morbid they are certainly not unreasonable. There are actually many reasons to preplan and even prepay your final arrangements before you absolutely need to. There is even a product called preened insurance, also known as burial and funeral insurance (which is basically low cost term life insurance) that is intended for the aforementioned purpose.

Burial insurance deviates from other kinds of insurance because it is a matter of “when” instead of a matter of “what if”. With this insurance, you can plan out all your final details and then pay for it in advance.

Kevin Gough of Conning & Co., an insurance research firm, says, “People aren’t buying this for the financial benefit, but rather to lock in and prearrange their funeral their way”. He later mentions, “Whether it’s a velvet-lined casket or a particular type of service, it guarantees they’ll have the funeral they want.”

When looking at burial insurance from its most fundamental level, it seems as though it is a no-brainer purchase. However, a string of funeral insurance scams across the nation (affecting thousands of policy holders) gives a loud warning that you must do your homework when buying burial insurance, maybe even more homework than when trying to decide on other types of insurance. There has been much controversy over elderly people allegedly being tricked into paying more in premiums than they will actually receive in claims (sounds like “Social Security”). In fact, states including Florida have tried to pass legislation that would ban this practice.

Funeral prearrangement is not a new concept. According to the National Funeral Directors Association (NFDA), more and more people over the last 30 years have decided to look into preplanning. Recent industry wide events have put the focus on prefunding of these ceremonies.

In the past, funerals were normally paid for via trusts (a set amount of money that is set aside to cover final expenses). Trusts are no hard to make, but you have to think about the tax liabilities if you are considering moving out of state. Alternatively, some people set up something called “final life expense” insurance. These are designed to have small coverage limits, around $10,000, and are specifically for covering burial costs.

In the next article in this series we will start off talking about rising funeral costs.

The topic of death is often one that is hard to think about. However, it is important that you plan ahead in order to save your family the financial burden of your passing. Below are the 8 most common questions about burial insurance.

1. Will my burial expenses really be covered by term insurance?

Unfortunately, most burial expenses will not be covered by term insurance. The problem with term policies is that they only cover you for a particular amount time (normally 5 to 15 years). Most people live longer than their term policy and therefore have no benefit once they pass on. Alternatively, burial insurance policies cover you for your entire life.

2. What about “Guaranteed Issue” (aka. “Non-Medical”) life insurance? Is it a good option?

Whenever you hear the phrase “no medical questions” or “guaranteed acceptance”…keep your guard up since its usually a scam. Some life insurance sites say this is the best option, but this is simply contrary to the facts. There is a “deductible” (or waiting period) of 2-3 years before your full benefits start, while full coverage plans offer “immediate” coverage. Unless you are the pinnacle of health…I would not advise you go this route.

3. Who is allowed to receive the death benefits of my policy?

Generally, you can choose a relative, spouse, someone with a vested interest in you (like a business partner), a charity, or even a close friend.

4. What if I get sick after I’m covered. Can companies cancel my policy?

A change in your health will not cancel your policy (unlike health insurance). However, you must take note of when your premiums are due in order to keep your coverage.

5. Can the benefits that are paid on my burial insurance policy be used for things other than burial expenses?

Yes. The person (or charity) that receives the benefits has the sole discretion on how the funds are to be used. They are generally used only for burial expenses, but they can be used for anything if desired.

6. Is a “Guaranteed Issue” (or “Non-Medical”) plan the only type of burial insurance that is offered?

There is a large selection of products available for your burial needs. Most of them do not have those pesky waiting periods, like guaranteed issue does. The most burial insurance polices have immediate, first day coverage with very few medical questions. Also, most do not require a medical exam.

7. Why is burial insurance more money than term insurance?

This is because of the fact that a burial plan covers you for your whole life. It can also not be canceled if you simply pay your premiums. Term plans cover you for only a certain amount of time. Once that period ends you have absolutely no coverage, they will not pay any benefits after the term has ended. Most individuals live longer than their term policies. You cannot outlive your burial insurance policy. This is why exclusive life insurance leads are so popular, it is by far the better choice.

8. Are you allowed to purchase a life insurance policy on a parent that already has life insurance?

Yes, usually this is fine.

If you are looking for burial insurance for someone in your family that has a critical illness, then you may want to look at critical illness cover insurance instead.

If you want to learn some important facts about burial insurance, then you will want to read this article. Specifically we’ll discuss the affordable nature of burial insurance, pre-need funeral plans, and the astounding cost of the modern funeral. After reading this article, you’ll be better equipped to choose a suitable burial insurance plan.

Burial insurance, just like the best car insurance and household insurance, is an attractive option because you are able to make affordable monthly payments. If you have ever done any research you would know that funerals are extremely expensive for the family that is left behind. In addition to the normal burial expenses, many family members have to travel on little notice, causing further increase in expenses. However there is an alternative to burial insurance.

Often some funeral homes sell something called pre-need funeral plans. These plans are not a perfect solution because they most likely will not cover all of the funeral cost. There are the cost of credit card settlements, family travel expenses, and the cost of transporting the deceased body to its final resting place. All of these things quickly add up and can amount to gigantic sums of money very quickly, leaving your family to pick up the tab.

Final funeral expenses are seldom recognized for the total outlay of cash that they will one day incur, which average around $8,000. Additional expenses that a person may have to cover are things like outstanding debts, credit cards, and/or a mortgage on their home. Most people are extremely sensitive about the thought of leaving their heirs with unpaid debts. The best plan is to purchase a burial insurance policy that covers these above mentioned expenses as well as the normal funeral expenses. This will ensure that your loved ones are fully protected.

As one can see, burial insurance should be something important to consider for the sake of ones family. In this article we discussed the affordability of burial insurance, pre-need funeral plans, and the astounding cost of the modern funerals. Now that you have this important information in your tool belt its time to get yourself a burial insurance plan and maybe look at life insurance no exam to get life insurance with no exam.