Speak with an experienced advisor! Although there can be any number of reasons why people purchase life insurance, one of the key purposes that those who are age 50 and over do so is to help with ensuring that the cost of their funeral and other final expenses will be taken care of, and will not force their loved ones into a financial hardship.
Today, the cost of a funeral service and other final expenses – which can typically include a burial plot, a headstone, flowers, transportation, and other ancillary costs – can, on average, be in the $10,000 range. So, having a burial insurance policy that is in place to cover such costs can be very beneficial.
What Is Burial Insurance?
Burial insurance is a type of life insurance coverage that is designed to cover an individual’s funeral and other related costs. That is why this type of insurance is often also referred to as either funeral insurance or final expense insurance.
In most cases, burial insurance will be a whole life insurance policy. Whole life is a type of life insurance policy that includes both a component for death benefit protection and a component for building up cash value.
The amount of the death benefit on a whole life insurance policy is typically a set amount that is guaranteed not to decrease over time. These types of policies will also usually have a fixed amount of premium throughout the entire lifetime of the policy, regardless of the insured’s increasing age and / or whether they contract an adverse health issue – as long as the premium continues to be paid.
The cash that builds up over time in the policy’s cash value component will be allowed to grow on a tax-deferred basis. This means that there is no tax due each year on this gain, unless or until the policyholder withdraws it.
Cash that is in a whole life insurance policy can be either withdrawn or borrowed by the policyholder for any reason, including the payoff of debt, the supplementing of retirement income, or even for other needs.
How Burial Insurance Can Differ From Regular Life Insurance
Although burial insurance is a form of life insurance protection that will pay out a death benefit in return for the payment of a premium, there are some ways in which burial insurance can differ from a regular life insurance policy.
First, the death benefit that is associated with a burial insurance policy will often be in the lower range. Typically, for instance, these policies will provide somewhere between $5,000 and $25,000 (or in some cases, more). This can differ from regular life insurance coverage, which can range up into the millions in terms of death benefit protection. This is because regular life insurance coverage will often be purchased for other specific needs, such as paying off a mortgage, the payment of a business loan, or to be used for paying ongoing living expenses of the survivors.
Also, many regular life insurance policies will require the applicant to answer a long list of medical and health related questions on the application for coverage. This is particularly the case if an individual who is applying for coverage may have certain health conditions.
In addition, it is often required that an applicant for regular life insurance go through a medical examination. During this exam, additional health related questions will usually be asked. The applicant will also be required to submit a blood and urine sample, which will be tested for certain risk factors by the insurance company.
Also, the life insurance underwriters may wish to review additional medical information, such as medical records from either a primary care physician, a medical specialist that the applicant sees – or both.
Once all of the information has been received – which could take weeks, or longer – the insurance underwriters will then need to review everything, and from there they will make a determination regarding the person’s approval for coverage, as well as the exact premium rate to be charged.
Conversely, when someone applies for a burial insurance policy, there is usually no medical examination that is required. Therefore, the applicant will not need to take the time to meet with a paramedical professional – and because of this, the application, and approval can move through the process much more quickly. In fact, in some cases, an applicant for burial insurance may even be approved within just a few days of applying – or sooner.
There are also burial insurance policies that will not require any health questions to be answered on the application at all. Therefore, even if someone has a health issue, they can be guaranteed for the coverage.
It is important to note, though, that because the applicants for burial insurance are oftentimes older, and may have more health issues, than those applying for regular life insurance, these policies can present more risk to the insurance company. Because of that, the insurer will need to somehow reduce its risk.
One way that an insurance company may reduce the risk that it has taken on a riskier applicant for burial insurance is to have graded death benefits. This means that if the insured dies within just a short period of time after purchasing the policy (such as two years), then only a certain percentage of the stated death benefit on the policy will be paid out to the beneficiary. If, however, the insured lives past that two-year mark, and then dies in the future, 100 percent of the policy’s death benefit will be paid.
How To Get The Best Premium Rates On A Burial Insurance Policy
In order to get the best premium rates on a burial insurance policy, it is suggested that you work with an independent insurance brokerage that has access to more than just one, single insurance company. That way, you will be much better able to compare the benefits, as well as the premium price, on multiple options.
If you are in the process of shopping for burial insurance, we can help. We work with many of the top life insurance carriers in the marketplace today, and we can provide you with all of the important details that you may require for making a well-informed purchasing decision. When you are ready to begin the process, just fill out the form on this page.
Should you still have any additional questions regarding how burial insurance differs from regular life insurance, please feel free to call us directly by phone, toll-free, by dialing 888-501-0530. Our experts are happy to assist you. So, contact us today – we’re here to help.
