Understanding Burial Insurance Plans


There is a lot of confusion surrounding burial insurance plans. These policies could be a crucial tool for you and your family, but you need to understand these plans and all of the advantages that they bring.

Every year countless families across America lose a loved one unexpectedly. While there are going through the emotional pain of their loss, they find themselves struggling to pay for a funeral.

There are dozens of burial expenses that many people forget to account for, and they can quickly add up to an expensive bill. Costs like flowers, casket costs, and much more can put a toll on your loved ones after your passing. One simple way to offset these costs is by purchasing a burial insurance policy.

What is Burial Insurance?

First things first, let’s explain what burial insurance is. These plans, sometimes called final expense insurance, are exactly what they sound like – plans bought specifically to pay off your funeral costs or other final expenses that you leave behind.

These policies are sold by thousands of insurance companies across the nation and are designed to protect your family from expensive funerals or other related costs. The average funeral costs $10,000, which can be a heavy bill for a grieving family to pay for, especially when the death is unexpected.

Burial insurance plans are whole life policies, which means that as long as you pay the premiums on the policy, you won’t lose coverage. This is a significant advantage over term policies that will eventually expire.

There are two types of final expense policies, level benefit, and graded benefit. With a level benefit policy, as soon as you start paying for the policy, it’s effective, and you would receive the full payout from the plan.

With a graded benefit policy, there is a 2-year waiting period implemented on the plan, which means that if you were to pass away within the first two years after you buy the policy, your family isn’t going to get the payout from the plan. If anything tragic happened to you within the first 24 months, your family would receive a return on any premiums that you paid, but not the policy amount. Most insurance companies will refund the premiums and add additional interest, generally around 10%. The graded benefit plans are reserved for applicants with any severe health problems.

One thing you should be aware of is the age limitations on these plans. While they can vary depending on the carrier, most insurance companies will not sell a policy to anyone under the age of 50. Likewise, the majority of carriers stop selling burials plans once you reach the age of 85.

Applying for Coverage

Purchasing one of these plans is simple, especially if you go with a graded benefit policy, because these plans are guaranteed issue coverage options. This means that you can’t be turned down for the coverage. You’ll pay more for these plans, but you can’t put a price tag on the peace of mind knowing that you family won’t suffer financially from you passing away.

When you apply, a medical exam isn’t going to be required, which makes the approval process much quicker than a traditional insurance policy. That means that you also won’t have to worry about any pre-existing conditions causing you to be declined for coverage.

When you apply for these plans, the insurance company is going to ask you several questions that are going to impact your premium rates. With your application, the company will need to know your age, height, weight, gender, income, how much alcohol you drink, if you use tobacco, and if you have any dangerous hobbies. All of the questions are simple and shouldn’t require any previous research before you apply for the policy.

After you apply, you can get insurance coverage quickly. In some cases, you can be approved for your policies in a matter of days.

The Advantages of Burial Policies

There are several advantages to a burial insurance policy that make it a great option for many people looking for protection. The first is that isn’t an affordable alternative. The older that you get, the more expensive life insurance becomes. Because burial insurance plans are much smaller, that means the premiums are lower as well. If you want to get the cheapest protection for your family to pay off small expenses like funeral costs, these final expense insurance policies are a great way to do that.

As we mentioned, these plans are a great way to get coverage quickly. With a life insurance policy, you could wait weeks or even months to be accepted for your policy, but with a burial insurance plan, you can get the projection in a fraction of the time. If you don’t want to wait, these are a good option for you.

Another significant advantage is how simple they are to apply for coverage. With a traditional insurance policy, there is a medical exam, health questionnaire, and several different types to choose from. If you’re looking for the easiest policy to apply for, the burial insurance plans are a great way to get it.

The Disadvantages of Burial Insurance

While there are plenty of pros to final expense insurance, there are several cons as well.  The first and most obvious is the lower maximum payouts from the plans. With most plans, you can only get up to $30,000 of coverage. For covering funeral costs, these plans can be perfect, but you won’t be able to get much more out of the payout. If you’re looking for protection to pay off mortgages or student loans, these policies won’t be enough.

Another disadvantage is that these plans are only available until your 85, the coverage will go past that, but you won’t be able to apply if you’re already past that age. This is a significant disadvantage because that’s the point that the plans would be the most beneficial.

One important pitfall of these plans that you should be aware of is that you could actually end up paying more than the benefit from the plan itself. Because the are permanent plans, you’ll have coverage for as long as you pay the premiums if you purchase one of these policies in your early 50s, and you live for another 40 years, you could have saved money by putting money into a savings accounts.

Getting the Most Affordable Funeral Insurance

It’s important that you get the most affordable burial insurance policy possible, and there are a few ways that you can do that. The first way is to stop waiting. If you want to get protection, you should do it now. Your age is an important part in determining how much you’ll pay for your policy, the older that you are, the more you’re going to pay.

Another way that you can lower your premiums on the plan is by cutting any tobacco usage. Smokers or anyone that uses chewing tobacco is going to pay much more for coverage than someone who doesn’t. If you want to keep more money in your pocket, the best way to do that is by quitting any tobacco usage.

If you want to ensure that you’re getting the cheapest burial insurance policy, you’ll want to work with an independent agent, like ours at Burialinsurance360.com. Unlike traditional insurance agents, independent agents represent dozens of companies, instead of only working with one. Our agents can bring all of the lowest quotes directly to you. They will save you both time and money.

Every insurance company has different rating systems and different premium rates for their burial insurance plans, which means that you could receive drastically different prices for the same amount of coverage. That’s why it’s important for you to get quotes from multiple insurance companies before you choose one, our agents can do all of the work for you.

Is a Plan Right for Me?

After reading all of the advantage and disadvantages, you still might be wondering if one of the policies are a good choice for you. There are several questions that you can ask yourself to help you decide.

The most important question you should ask is, “how much debt or final expenses will I leave my loved ones?” as we mentioned, these policies are an excellent tool for giving your family money to pay for all of your funeral expenses and final costs, but these policies might not be enough. Before you buy a plan, make sure that it will give your family the resources they need to pay off your debts. Not having enough burial insurance coverage could be as bad as not having any coverage at all.

Another question you can ask yourself is, “can I be approved for a traditional life insurance policy?” in some cases, going with a term life insurance plan is a great way to get more coverage at a comparable rate, but there are a lot of applicants that can’t be approved for a life insurance plan because of health or a pre-existing condition. If you can’t be approved for a term life insurance, or your health would cause your premiums to go through the roof, these plans can be a great alternative that could save you money.

Burial Insurance – Bottom Line

Final expense insurance is a great way to ensure that your family will have the resources they need to get through the difficult time without being put under financial strain. Unlike life insurance, you won’t have to go through the medical underwriting, and you won’t have to wait months to have peace of mind knowing your family will be taken care of.

You never know what life is going to throw at you tomorrow. There is no way to predict the future, and while you may hope nothing tragic is going to happen to you, it’s important that you plan for the worst.

If you have any questions or want to purchase a burial insurance policy, please contact us today. We can help connect you with the perfect policy to fit your needs and ensure that your family will have the resources they need.

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