Thread: What is a Burial Insurance Policy?

buying life insurance

A burial insurance policy is usually quite simple! It is actually a whole life insurance policy with a fairly small face value. That face value may range from a couple of thousand dollars to about twenty-five thousand dollars. That may seem like quite a bit of money, but in the overall picture of things like life insurance, it is considered fairly small. It has also been designed to be simple for older people to apply for, and after they apply for it, to get accepted.There are two things insurers know these days. One is that there is a booming market for baby boomer and senior products. The other is that funerals can be quite expensive. It is tough to calculate an average figure to pay for a burial, funeral, and other associated costs, but eight or ten thousand dollars would probably be close.It can be very hard for moderate income families to budget for this expense. It can be even tougher for seniors on fixed incomes to save for it. So that is why burial policies have become one way to plan for these expenses. A senior, or his or her family, can make monthly payments. When the insured person passes away, the cash benefit from the policy can be used to pay for expenses like burials, funerals, settling debts, etc.

Burial insurance is a basic issue life insurance policy with coverage to the age of 100. This product is very much like universal life insurance and is referred to as graded life, final expense insurance with easy issue permanent coverage. Coverage for this type of insurance continues as long as the premiums are paid and you do not cancel the policy. Burial insurance is usually used to pay for immediate medical expenses related to the funeral, any credit cards debts that may be present when the beneficiary dies or other costs associated with funeral expenses. All policies accumulate cash, although it is a small amount in comparison to what you pay in premiums.
Some of the features of burial insurance include:

• Easy to qualify for with usually a simple yes/no questioner.
• Policy has a small face value.
• Some policies can accumulate a cash value, however most do not.
• Premiums remain level for the life of the policy.
• Protection is provided to the age of 100 years old.

Typically burial insurance provides coverage between $5,000 and $50,000. These are funded by various types of insurance products such as universal life or whole life policies. There are no standard plans when it comes to burial insurance and it really gets down to what the person desires for benefits i.e. amount of coverage, premium amount, age and current health status. In essence, the sky is the limit and the limit is what you want to pay in premiums.
Some of the items that are covered with burial insurance are:

• The cost of the burial plot.
• Digging and filling in the grave site.
• The cost of the head stone.
• The casket or urn that the deceased will be placed in.
• The cost of cremation if desired by the beneficiary.
• Embalming of the deceased's body.
• Grave liner or burial vault.
• Hearse or other funeral vehicles.
• Flowers.

Another approach to burial insurance is a pre-payment of your funeral arrangements. This program allows you to select a funeral home, the services that you desire, casket or cremation, flowers, headstone and burial plot as well as other services and lock in the prices of these services by paying in advance. Some States are very strict when it comes to this type of insurance and contacting your States Department of Insurance will provide specific requirements that companies selling burial insurance must follow. Make sure you know what the laws are in the State that you reside in.

The Burial Insurance or Final Expense life insurance policy assures coverage for the rest of your life. Burial Insurance and Final Expense policy also gives you leave behind the freedom and flexibility to pay other expenses and debts that may be outstanding.