What is Burial Insurance? Do I need a Plan? What does it cost?
These are very common questions in regards to burial insurance, also known as final expense plans. These plans are small life insurance policies that are designed specifically to handle the last expenses a person’s family must handle for them.
How it Works
Typically, insurers will offer burial, or final expense, life insurance to individuals who are between age 50 and age 85. There are some insurance companies, however, that will offer coverage to those who are over age 85.
Burial insurance policies are permanent life insurance rather than term life policies. This means that these policies do not have a specific time period – or term – of coverage, and, provided that premiums are paid, the policy will not expire. In addition, these policies will also include a cash value component where tax-deferred savings can be built up over time. These funds may be withdrawn or borrowed against if the policy holder opts to do so. However, it is important to note that an unpaid loan or withdrawal will go against the policy’s death benefit.
There are two benefit levels available with Funeral Insurance plans:
- Level Benefit – Means the full face amount of the policy will be in-force the day the application is approved.
- Graded Benefit – Generally there is a 24 month waiting period before the full face amount of the policy is in force. Should death occur to the insured, carriers will return premiums paid and add some interest to the money. Interest paid varies by carriers but 10% seems to be about the most common amount.
Graded Life plans are for those with severe health. They are Guaranteed Issue life insurance plans (age range is 40-80) with no health questions. You cannot be turned down for this plan. For someone with a serious health impairment this is the way to go. The premiums will be pretty high but for someone who cannot get approved for any other type of policy this will make sure your family is take care of.
In order to qualify for a Level benefit plan the applicant can have some minor impairments and/or health issue is controlled via medications etc. I know there are many types of impairments and this is why we should speak prior to running quotes.
It is very common that children, of parents, will begin the process of looking for a plan. Be aware that if you do want to apply to a plan you can be the owner of the policy as well as the beneficiary of the policy. Your parent(s) must sign the plan (Electronically or over the phone voice signature) and most carriers will call the proposed insured and do a quick interview to make sure they understand what they are applying for. This helps prevent fraud and protects your parents from someone taking a life insurance policy against them without their consent.
Age of issue, for most carriers, starts at 50. There are a few carriers that will issue plans at a younger age. Maximum age of issue is about 85. I do know of a carrier that will go a few years older. When you start looking at plans for someone in their 80?s. you can guess, that the plans start to get very expensive.
Applying for a Policy
When applying for final expense insurance, a medical exam is not typically required. This means that the applicant will not need to submit a blood and urine sample. This can be a relief for those who have a fear of needles, as well as for those who may have certain health related conditions.
Applicants will, however, be asked certain questions on the application for life insurance coverage. For example, the insurance company will want to know information regarding:
- Smoking habits / tobacco usage
- Alcohol usage
- Occupation and income
- Lifestyle / dangerous hobbies
Because there is no medical exam requirement, applicants can usually be approved quite quickly. Insureds will also usually have a choice in how they make their premium
payment on these insurance policies.
One premium payment option is the traditional monthly mode. Another option that funeral insurance buyers have for paying their premium is to simply pay one single lump sum. This way, the policy will immediately be paid up, with no further premium payments due. Others choose to save a little by getting funeral insurance plans that have annual or semi-annual premium payments. The insurance companies will drop your premiums based on the amount of lump sums you are willing to pay.
A graded payment option is also available. With this type of payment, the insured will be able to decide on how long he or she would like to pay their premium and then the insurance policy will provide an amount of coverage that will be equivalent to the amount of coverage that the premium will buy.
How to Locate Affordable Final Expense Insurance Coverage
When shopping for burial insurance, it is important to first compare policies and quotes from more than just one insurer. This is because the premium that is charged for this type of coverage can vary a great deal from one insurance company to another.
Not all final expense insurance policies are the same. There are several things that you should look for when comparing burial insurance plans. Just some of the questions that you need to ask include:
- What is the initial policy premium – and will that premium change over time?
- Will there be a waiting period before the full amount of life insurance is in-force?
- How hard is it to qualify for this particular policy?
- What is the maximum amount of coverage that can be purchased with this policy?
It is also important to check the financial strength rating of the underlying insurance company. Insurers are typically rated by industry ratings agencies such as A.M. Best, Standard & Poor’s, Moody’s, and Fitch. It is important that the insurance company you purchase your coverage through has a good rating, indicating that it will be there when you need it in the future.
We can help you in finding just the right burial insurance coverage for your specific coverage needs. We work with many of the top rated burial insurance companies in the marketplace today, and we can assist you in comparing policy features and premiums. By simply using the form on this page, you can obtain the information that you need to make an informed decision within seconds – right from your home computer.
The younger the age the lower the costs. If you start the process in your early 50?s the cost can be quite low while life insurance for seniors can be pretty steep. Since there is no medical exam required, those who have certain adverse health conditions can typically qualify for coverage. This means that families and loved ones can obtain the financial protection that they need pretty affordably, even if they have been turned down for other types of life insurance coverage.
Also, once an individual has obtained a burial insurance policy, their premium will usually be locked in for the life of the policy. Therefore, their costs will not go up – which can be a real advantage for those who are on a budget and / or are living on a fixed income.
You can make sure you are getting the best rates by working with an independent agent. At Burial Insurance Plans we work with all the top companies to make sure you are getting the best final expense rates. Since we do not work for any one company, we really work for you. Having this customer focused perspective is what makes us able to get you the policy you need at the best possible price.
If you have any additional questions regarding burial insurance, comparing life insurance quotes, or even about life insurance in general, please feel free to give us a call, toll-free, at 888-389-8676 and we will be happy to help. We want to ensure that you and your loved ones find the funeral insurance protection that you need in order to provide you with the peace of mind that you deserve.