If you’re getting up in years, you may need to think about your funeral. Not only will you want your family to conduct a ceremony you approve of, you should also think about the costs involved in taking care of your body and your estate. A funeral, burial, and other end-of-life costs can easily run into the thousands of dollars, and that’s not a burden most people want to place on their loved ones. That’s why many people choose to get burial insurance, a kind of policy that can cover these expenses.
Burial insurance, also known as funeral insurance and final expense insurance, comes with a low premium cost compared to other forms of life insurance. This is because policies usually only cover up to around $25,000, and benefactors can only apply the money towards funeral expenses and other end-of-life costs like memorials and will executions. You can classify most burial insurance policies as one of two types: simplified issue and guaranteed issue.
Unlike many forms of life insurance, a simplified-issue burial insurance policy doesn’t require a medical exam. However, you will need to answer a few health-related questions and the insurance issuer may reject your application depending on how you answer. The big question is whether you currently suffer from a terminal illness that could end your life within the next few years. Simplified-issue policies offer better premium rates because your odds of living for a few more years are higher.
Guaranteed-issue policies are even easier to get than simplified-issue burial insurance. The guarantee in the name is the fact that anyone can qualify no matter what condition they’re in. You don’t even have to answer any medical questions. However, in exchange the premiums are higher than simplified-issue policies.
The Grading Period
Something else to remember about burial insurance is the graded death benefits. What this means is that if you die soon after you sign up for burial insurance coverage, your benefactor will only get up to a percentage of your policy’s value. For instance, if you pass on six months after you take out $10,000 of burial insurance, your family might only get $2,500. However, most policies end the grading period after two to three years.
Depending on the insurance company and the policy, burial insurance can cover different expenses. These include:
- The casket
- The headstone or plaque
- The burial plot or vault
- A funeral home or church service
- Embalming and burial clothing
- Renting a hearse and arranging a burial procession
- Flowers, catering, and other wake or memorial expenses
- Retaining a lawyer to record, read, and execute a will
Even if your family is financially sound, they might not have enough money sitting around to cover a proper funeral. Burial insurance helps you avoid becoming a burden on your family and lets the burial process run smoothly so your family doesn’t become overwhelmed by stress and money troubles. All residents age 65 and up should consider getting burial insurance coverage and at least consider making funeral plans for the future.