A lot of folks only have a brief idea of what burial insurance is or what it covers. To put the coverage in easy to understand terms, it is a form of life insurance that pays a beneficiary a particular amount to cover funeral or burial expenses. The payout varies from plan to plan, and the sum can be for anywhere between $2,000 to $25,000. It is a great choice for persons that don't qualify for other types of insurance or that do not require a substantial death benefit.
Funerals and burials are quite expensive these days. According to the National Funeral Directors Association, the median cost of a funeral, viewing, vault, and burial was $8,508 in 2014. By 2016, that price had risen to $8,755. Cremation isn't much cheaper. The organization states that a direct cremation runs about $2,300. Meanwhile, with a viewing and ceremony, the price raises to $6,078. Most citizens don't just have that kind of cash lying around. Thus, family members are left taking out loans or pawning items to come up with the funds.
Nobody wants to put this financial burden on their loved ones. So, if you can afford it, consider getting burial insurance to handle the situation. The act will provide you with peace of mind and ensure that your family doesn't have to come up with thousands of dollars in a hurry.
The Way In Which Burial Insurance Works
Burial insurance contracts specify that the beneficiary may only use the money for burial costs. Therefore, if you are planning on leaving them some money behind to do whatever they please with, you might want to think about an alternative option. Burial insurance is an excellent fit for a lot of people though. Many individuals choose to buy their plan through an insurer via a pre-need contract. This allows them to pick out and arrange everything with the funeral home before their death.
Basically, the pre-need contract helps the person come up with an exact funeral cost. Then, they merely take out a policy that covers that price. There is no obligation to do things in this manner though. Interested parties are more than welcome to make a guesstimate of how much money they will need. Then, that money gets sent to the beneficiary after their passing to pay for everything. This route is often chosen by people with a strict budget to ensure that they can afford the monthly premium.
Differences Between No Waiting And Partial Waiting Policies
Obviously, the names pretty much give away what these types of burial insurances are all about. The no waiting plan goes into effect as soon as the policy is bought. It is a good choice because, after all, people don't know exactly when they are going to die. The event could occur as soon as the next day after purchasing the coverage.
With partial waiting burial insurance, beneficiaries do not gain access to the full death benefit all at once. It varies from company to company. For instance, they may only get 75-percent of the amount in the first year and not receive the other 25-percent until the year after. Partial waiting periods usually come to fruition when the policyholder doesn't answer specific questions about his or her health.
Are you interested in obtaining burial insurance? If so, give our office a call to discuss your options.