Burial Insurance – What is it and do I need it?
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 type of pre-need insurance that is permanent coverage, 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 These funds may be withdrawn or borrowed against if the policy holder opts to do so.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 a form Guaranteed Issue life insurance plans (age range is 40-80) because they require 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 elderly parents will begin the process of looking for a plan to offset any funeral cost. 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.
How Much Coverage Can I Get?
Most companies that offer funeral policies will only insure a person up to $50,000. There are a handful that will go up to $100,000 in face amount.
What if I need More than $50,000 of Coverage?
Since most companies will only go up to $50k in face value, it is hard for some people to obtain coverage that meets all their needs. In this case we can work with you on obtaining a guaranteed universal life insurance policy (GUL. These polices start at $50,000 and go up from there.
GUL policies are kind of like a hybrid between whole and term life insurance policies and control costs through this merged approach. These policies are ideal for those who will be carrying a large amount of debt or a person who’s estate is sizeable and may face some pretty steep taxes after their death.
Who Needs a Burial Insurance Policy?
Burial insurance plans are an excellent way to give your family the money that they need to pay for any funeral expenses that they would occur if something were to happen to you. These plans are an affordable type of coverage, but they are also a unique policy that isn’t the best option for every family. It’s important that you’re getting the best coverage to meet your needs, and some people should take advantage of these burial insurance companies.
The main demographic that should consider a burial insurance plan is older applicants. These burial insurance policies can be an excellent choice for older Americans that are wanting to get insurance coverage for their family. With burial insurance plans, there is a wide age range that allows people up into their 90s to apply and be accepted for coverage. Additionally, there is no medical exam required, which means that your health won’t prevent you from getting coverage.
Another group of people that can use these policies is anyone that is looking to save money on their life insurance rates. Because these policies are much smaller, the premiums are going to be much lower than a traditional life insurance policy that gives a significant amount of coverage. If you don’t want to pay for a million dollars of coverage, but don’t want to leave your family with funeral costs, a burial insurance plan is an excellent choice.
Another key demographic is applicants that don’t have any massive debts or family members that rely on their income. The primary goal of an insurance policy is to help pay off mortgage loans and replace your paycheck if something tragic were to happen to you. A burial insurance plan isn’t going to give nearly enough coverage to do either of those, but if you’re in a stage of life where you aren’t saddled with those debts, then you should consider getting a smaller burial insurance plan.
10 Best Burial Insurance Companies
To help you make the best decision without spending hours and hours researching and calling, we’ve compiled some of the best burial insurance companies on the market. Every applicant is going to have different preferences and needs, so there is no true “best” company, but these companies continue to rise to the top for thousands of applicants every year.
Transamerica is a highly rated company that has continued to provide excellent coverage to people all across the nation. They’ve been around for over 100 years and hold excellent ratings from all of the rating companies. They have several benefits that set them apart from the rest of the field. One of the most notable is that they offer larger burial insurance plans than most other companies on the market.
If you’re under the age of 55, then you can buy as much as $50,000 worth of insurance protection, which is double what most other companies offer. The maximum amount goes down every ten years after that. For example, a person that is above 65 can only buy a $45,000 burial insurance policy.
One of the nicest factors about Americo is that they have several different options that you can choose from when you’re shopping for burial insurance coverage. They have different plans that offer a variety of benefits.
They have whole life plans that anyone between the ages of 50 to 85 can purchase and they are level premium plans, which means that your policies are never going to increase, regardless of how long you hold the policy. You can purchase one of their whole life plans with coverage anywhere from $2,000 to $30,000.
Baltimore Life is not the most recognizable company on our list, but they have excellent insurance options that you should consider before buying the policy that’s best for you. They have a Silver Guard series of plans, and each of them is slightly different.
With their Silver Guard I whole life insurance plan, you’ll be required to pass a simple health questionnaire before your application is going to be accepted. If you are not able to pass the health survey, then they have Silver Guard II and III which don’t require the survey, but they have graded death benefit coverage, unless the death is by accident, in which case the coverage is 100% from the day that you purchase the plan.
Mutual of Omaha
More than likely you’ve heard of Mutual of Omaha, but you may not have known that Mutual of Omaha has excellent burial insurance plans. If you’re between the ages of 45 to 85, then you’re eligible for one of their policies, and you only have to pass a background check, which will include medical records and prescription drug database records. It’s rare that an applicant will have problems getting approved for coverage with Mutual of Omaha.
One of the benefits of buying your policy through Mutual of Omaha is the accelerated death benefit rider that comes attached with your policy. This allows you to get the payout from your policy early if you’re diagnosed with a terminal illness. It’s an excellent rider to have. You never know what’s going to happen, but that terminal illness can easily leave your family with a mountain of hospital bills. Learn more about this company by reading our Mutual of Omaha Company Review.
Sagicor has great life insurance options for anyone that’s looking to get a simplified issue universal plan. If you’re under the age of 65, then you’ll only have to answer a few simple health questions. If you’re over the age of 65, then you’ll have to go through a fully underwritten plan. They have a No Lapse Universal Life plan that will allow you to get $25,000 worth of coverage.
Unlike other companies, Sagicor has several different health classes that you could be placed in, which means that you can get much better premiums depending on your health. They have preferred, standard and rated all the way up to table 8.
United Home Life
One of the best advantages of United Home Life is that the eligible ages for simplified issue are much larger than other companies. With United Home, you’ll be eligible for simplified issue as long as you’re between the ages of 20 – 80 years old. Additionally, they offer much more coverage through their burial insurance plans that other companies. When you buy coverage through Untied Home, you can get up to $100,000 worth of protection.
American National Insurance Company
AMNICO is known for their no medical exam policies, and they have excellent ratings from both A.M. Best and Standard and Poor’s. If you’re looking for a company that has years of experience selling no exam plans and are financially stable, AMINO is a great option for you.
AMINCO has a Legacy Whole Life Insurance plan that is guaranteed issue for anyone between the ages of 50 to 80, which means that regardless of your health or any pre-existing conditions, you’ll be able to get burial insurance. It’s important to note that you will have a two year graded death benefit period. They also say that you’ll be able to get approved for coverage in as quickly as 5 minutes. Learn more about this company by reading our American National Insurance Company Review.
With Foresters, you will be required to answer a few health questions to get approved, but don’t worry, it’s very easy to pass their health survey. If you do, you’ll enjoy some of the best premiums available for a burial insurance plan. They tend to be one of the cheapest options to get insurance coverage.
Their PlanRight Whole Life will allow you to get life insurance up to $35,000 worth of protection if you’re under the age of 80. If you’re between the ages of 81 – 85, then you can only buy $15,000.
Gerber is a popular company, but most people don’t consider their no medical exam policies. Gerber isn’t the first company that will come to mind, but you could be missing out on an excellent option.
Gerber is one of the best options for anyone that has several pre-existing conditions or is in poor overall health. Anyone between the ages of 50 – 80 can qualify for up to $25,000 worth of insurance coverage. They are a whole life plan that will build cash value the longer that you have the policy.
It should be noted that Gerber’s whole life plan does have the two-year waiting period, which means that if you were to pass away within the first two years, your family wouldn’t get the insurance coverage unless you were to die from an accident. Learn more about this company by reading our Gerber Company Review.
Last, but not least, is Assurity. They continue to be one of the top insurance companies for both no medical exam plans and burial insurance plans. The premiums for the plan are never going to increase, and the value of the plan is never going to decrease. If you’re under the age of 65, then you can buy $50,000, and if you’re over 65, then you can buy $25,000.
Assurity is an excellent option for anyone that doesn’t have any major health complications but are in good health. They have some of the best rates available.
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.
There are also similar policies like a pre-paid funeral plan which can server the same purpose, but is not as flexible.
As a part of the application process you will have to select a beneficiary. This can be a family member or, if the death benefits are only going toward the funeral and burial, you can direct the funds to a specific funeral director of funeral home. Be aware that if the policy is not directed to a family member that it must be used solely for funeral expenses. For example, a cemetery plot, funeral service or burial space could be included, but paying off any outside bills on the estate will not be possible.
Finding the Best Policy for Your Needs
Identifying what needs to be covered in your policy is a hard decision for some people. While the standard burial policy is pretty simple, there are several things you will want to consider when deciding how much coverage you want.
Funerals have become more expensive over time. The average funeral will cost an American family $8,000 – $10,000, depending on what area you live in. Cremation services are less expensive, but will still cost between $2,000 – $4,000.
Final expense policies are a form of life insurance so the beneficiary is not required to spend this money only on just burial expense. If your intention is for it all to be spent on funeral services, then make sure to designate a beneficiary you trust, and make sure they understand your wishes.
Since the death benefit does not have to be spent specifically on funeral expenses, you may want to include some extra to pay off any debts you may have. This makes it much easier on your heir to settle your estate and also insures that any inheritance you leave goes to your loved ones instead of paying off any remaining debts.
Leaving a Legacy
If you do not have a lot of assets and want to leave something to your loved ones, then adding some extra coverage to your benefit amount can be an affordable way to do just that.
For example, if you are 60 years old and estimate that your final expenses will be around $15,000, but want to leave $10,000 each to your two childrent, you could purchase a $35,000 policy instead of a $15,000 policy. The extra cost to you would be about $80 extra per month in premiums, but the effect would be a nice inheritance for your kids.
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 and will 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.
|$15,000 Burial Policy||Monthly Premium|
|55 Year Old Male||$45.92|
|55 Year Old Female||$36.85|
|65 Year Old Male||$79.71|
|65 Year Old Female||$59.51|
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.
Why People Choose a Funeral Policy Over More Traditional Life Insurance
The biggest reason we see people going with a burial policy is that as we age we get priced out of the traditional life insurance policies. The other problem is that those who are not in the best of health will get priced out more quickly once they are over 50 years old.
A good example would be a person who has been purchasing their life insurance through their employer and is not in optimal health. When they retire, the employer-provided policy is no longer available to them, but they want to provide some coverage to protect their heirs. Because they are older and not in great health, they end up with very high premium amounts for a term or whole policy that goes through the underwriting process.
This puts the person in a bind. They cannot find affordable coverage, but want to make sure no one is financially inconvenienced by their passing. Burial insurance provides them with the coverage they need at a price they can afford.
Working with a Burial Insurance Professional
You can make sure you are getting the best rates by working with an independent life insurance 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.