Life insurance is typically purchased for a specific reason. In many cases, younger individuals will buy this coverage in order to ensure that loved ones will have ongoing income should the family breadwinner die unexpectedly. In other instances, this type of protection can be used for paying off large debts like a mortgage or credit card balances so that survivors will not be saddled with large financial bills. Still others may use life insurance as a type of financial tool for paying off estate tax, donating to charity, or passing on assets to loved ones.
In the case of burial insurance, though, these policies are typically obtained for the key purpose of paying off final expenses. Today, the cost of a funeral can be more than $10,000 – especially when adding in the additional items such as one’s headstone, burial plot, flowers, and obituary announcement.
In addition, a person may also have other associated expenses, too, such as uninsured final medical and / or hospice costs – of which the burial insurance policy proceeds could also help to pay off.
How Burial Insurance Works
Burial insurance – which can also be referred to as funeral insurance and / or final expense life insurance – is typically purchased by those who are in the age range of 50 to 80 years old. The face amount of these types of policies is usually in the range of between $5,000 and $50,000. However, in some cases, the particular insurance carrier may offer a policy for more.
A burial insurance policy can offer a convenient option for family members or loved ones to quickly pay off the high cost of a funeral and other final expenses. This is because oftentimes, survivors simply do not have the thousands of dollars that it costs readily available to pay.
Burial insurance works much like other types of life insurance in that, in return for the payment of a premium, a benefit is paid out upon the death of the insured. However, it is important to note that – depending on how long the insured has owned the policy – the full amount of the proceeds may not always be paid out to the named beneficiary.
This is because some burial insurance policies have what is referred to as graded death benefits. This means that, if the insured dies within just the first two or three years of owning the policy, the beneficiary may only receive back the amount that was paid in as premium (and possibly some additional interest as well).
Should the insured live past the first few years of policy ownership and pass away after that, the beneficiary would be able to receive the full amount of the death benefit – even on a plan that contains the graded death benefit option.
The reason that insurance companies may offer policies with graded death benefits is because of the additional risk that they take on with the insureds on burial insurance policies. Because those who purchase these types of policies are typically older – and may not be in the best of health – the life insurer knows that the risk of paying out a claim is much higher.
How to Obtain a Policy
Qualifying for a burial insurance policy is oftentimes easier than obtaining regular life insurance coverage. This is because many burial life insurance plans will not require that the applicant for coverage undergo a medical exam in order to become insured.
This means that, as long as the applicant completes the application for coverage and pays the premium, they will typically be accepted for the policy. It also means that because there are no medical underwriting constraints to contend with, the policy may be approved within just a short period of time – often within just days, as versus weeks or months with a comparable traditionally underwritten plan of coverage.
Additional Advantages of Burial Insurance for Seniors
In addition to being able to pay off final expenses, there are additional benefits to owning burial insurance for seniors, too. For example, because many of these types of policies are a permanent form of life insurance, they will contain not just death benefit protection, but also a cash value component.
This means that the policyholder will be able to build up a cash savings within the policy that is tax deferred. Because there is no tax charged on the gain within the account, the funds can essentially have growth compounded on top of growth, year after year. This can allow the cash to grow substantially over time.
The funds that are within the cash component of the burial insurance policy can be borrowed or withdrawn for any reason by the policyholder – including for the payoff of debt, the funding of a college education for a grandchild, and / or to help with supplementing of retirement income.
In addition, these funds do not have to be repaid to the account. It is, however, important for the policyholder to know that any amount of cash value that is not repaid will be charged against the death benefit proceeds that are paid out to the named beneficiary. This can make a difference – especially if the beneficiary will need a certain amount of money for paying off the insured’s final expenses.
Conversely, if the policy beneficiary receives funds from the burial insurance policy, it is not expressly required that these funds be used for paying the insured’s funeral expenses. While this is typically the case, if there are other, more pressing debts that must be paid, it is always an option to use the money for those needs. Because all situations are different, there is no one right or wrong way to use the proceeds of a burial insurance policy.
How Much Does Funeral Insurance for Seniors Cost?
The cost of burial insurance for seniors can vary. This will be dependent upon several different factors – including the policy holder’s age and gender, as well as the type of policy that is purchased and the insurance company that the plan is purchased through.
Overall, however, final expense insurance can be a good value for a senior who needs it. One of the primary ways of determining the best cost for a burial insurance policy is to work through a company that has access to multiple life insurers. That way, more than just one company’s prices can be checked.
When reviewing burial insurance plans, there will be a difference in premium cost between the policies that do and the policies that do not require a medical exam as a part of underwriting. Those with no medical exam requirements will typically charge more in premium. This is because the insurance company is taking on more risk.
How and Where to Find the Best Policies
There are many options today for finding the best burial insurance for seniors. These policies can help families and loved ones in paying for the high cost of a funeral and final related expenses. Without access to these funds, survivors could be put into immediate financial hardship.
If you are seeking a burial insurance policy, we can help. We work with many of the top life insurance carriers in the marketplace today – and we can assist you with obtaining all of the important information that you will require for making a more informed purchase decision.
We can walk you through all of the details such as whether the policy has standard or graded death benefits, as well as whether or not you will be required to undergo a medical examination for the purpose of underwriting approval. All of this can occur without you having to meet in person with a life insurance agent.
There are many variables to understand – and we can work with you in order to ensure that you understand all of them prior to making your final purchase decision regarding burial insurance. When you’re ready to begin, the next step is to fill out and submit the form on this page.
Should you find that you have any questions along the way regarding life insurance policies for seniors – or, even if you just simply have a question or a concern about life insurance in general – please feel free to contact us directly. Our experts will be happy to walk you through the quote generation process, as well as other information. We can be reached via phone, toll-free, by dialing 877-235-9299.
We understand that there are many items to consider as you go through the process of purchasing burial insurance. You want to be sure that you purchase the right amount of coverage from the right carrier – and you want to ensure that the insurer will be there when you need them. The good news is that you now have an ally on your side. We are here to assist you throughout the entire process. So, contact us today – we’re here to help.