Main Advantages of a Burial Insurance Policy

We should start our discussion by looking at the three best reasons to purchase funeral insurance:

1. The life insurance coverage will never be terminated, it is permanent.
2. Your final expense insurance premiums will never change.
3. Your life insurance policy has liquidity. In other words, it builds up a cash value over time.

Let us look at each one of these points individually.

Your Funeral Insurance Coverage Is Permanent

One of the key advantages to a final expense life insurance policy is that your coverage is there when you really need it. Many life insurance plans have provisions that allow the insurance companies to terminate your coverage. With a final expense policy, you and your family can rest assured that you WILL be covered when the day comes.

Final Expense Premiums Do Not Change

Unlike traditional life insurance (or no physical term life insurance), final expense insurance premiums do not change over time. The amount that you agree to the day you sign up for your policy is the same amount you will pay for the rest of your life. This helps to eliminate any uncertainty with respect to your monthly insurance obligations.

Your Burial Life Insurance Has Cash Value

This means that your family does not necessarily have to use all the funds for costs related to your burial. Burial life insurance not only protects your family from the costs related to your passing, but it can even help a family member that is in a troublesome financial situation.

What Is The Average Burial Expense?

While burial expenses can range anywhere from about $100 to $10,000, the average burial will cost around $8,000. As you can see, this is quite a large sum of money to be required to come up with when you are grieving the loss of a loved one. This is what makes funeral insurance so important.

Do You Need a Medical Exam To Get Preneed Insurance?

Final expense policies are classified as “simplified issue”. This means that all that is required is a short application form. NO MEDICAL EXAM is required!

What Are Common Funeral Expenses?

Some common expenses related to burial include (but are not limited to):

• Casket
• Headstone
• Minister
• Hearse
• Funeral Service
• Visitation/Viewing
• Cemetery plot

What Are Some Other Costs Related to Final Expenses?

There are some other costs related to final expenses that are sometimes overlooked:

• Doctor Bills
• Legal costs are the time of death such as taxes or probate
• Debts
• Mortgage, credit cards, and car payments

What Is the Best Final Expense Insurance Policy Provider?

Global Life is known as the leading provider for quality coverage and affordable rates. AARP burial insurance is another very popular option.

Burial Insurance Frequently Asked Questions

1. What steps do I need to take to apply for final expense insurance?

The application process is very easy. All that you need to do is fill out a short form. This form is not used to screen you, but rather to help you choose the policy that best fits your needs.

2. Can my burial policy ever be canceled?

No. The only way your policy would ever been canceled is if you commit fraud or your fail to pay your premium on time.

3. Are my family members required to spend the insurance money on my burial costs only?

No. Whoever receives your insurance policy funds will be able to choose how he/she wants to use the said funds. There are no restrictions.

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.