You want to secure your funeral or end-life expenses before time via an insurance plan, but confused between burial and death insurance? Well! Do not panic. Burial insurance and death insurance are the two names of the same policy.
This insurance policy also comes with some other names like final insurance, funeral insurance, or cremation insurance. It will be responsible for your end-life expenses like funeral costs, cremation costs, medical bills, or any other debts you left after your demise. In this blog post, we will explore what a burial or death insurance policy is, how it works, and what to do when you already have a life insurance plan. Let’s get started!
What is a burial or death insurance plan?
Burial or death insurance is a type of whole-life insurance plan that is designed to cover your funeral, burial, or any other end-of-life expenses. Due to the high cost of funerals in the USA, it would be helpful to have a burial insurance plan to relieve these costs and put your loved one in relief after your passing. Typically, this insurance plan has three types: simplified issue, guaranteed issue, and pre-need insurance policy.
How does a burial insurance policy work?
As mentioned above, burial insurance covers the cost of your funeral and cremation expenses after your death. However, the death benefit can also be used to pay off debts like medical bills, credit card bills, or mortgage loans. While talking about pre-need funeral insurance, it covers funeral expenses just like burial insurance but the cost is usually paid to a funeral home directly instead of any family member or insurer.
Additionally, if the cost of premiums is too expensive to afford, you can check the coverage designed for low cost while the death benefit is enough to cover your final expenses. Meanwhile, your beneficiaries can use the death benefit freely for any other stressful obligations like estate settlement costs or any other.
How much does burial or death insurance cost you?
Burial or death insurance is considered one of the most reasonable types of life insurance available. It is affordable for even older people due to its lower coverage amount. In terms of its cost, the rates start from just $53 a month with coverage amounts from $5,000 to $35,000 with eFinancial. However, premiums can be paid monthly, semi-annually, or annually.
What does a death insurance plan cover?
Generally, death insurance covers the costs of expenses in the event of your death. But there are no restrictions on how the death benefit will be used. The beneficiaries can use the policy’s payout for:
- Funeral arrangements like viewing and service
- Cremation costs
- Burial costs along with interment
- Legal costs
- Medical bills
- Outstanding debts
But if there is a lower coverage amount that may not be enough for your beneficiaries as all of it will be spent for your end-of-life expenses. It’s better to go for plans that have high coverage as planning will make your final arrangements less stressful for you and your family.
What are the available types of burial insurance?
Several types of burial insurance to consider are:
1- Simplified Issue
In this type, the insurance company will check your health condition with a series of medical history questions. However, a medical exam is not necessary but certain factors like smoking, hazardous hobbies, or pre-existing conditions may result in policy denial.
2- Guaranteed Issue
While getting this policy, you neither have to answer any medical questions nor undergo a medical exam. But it can be very risky to the insurer, your cost will be significantly higher. In addition, guaranteed issues also come with the provision of modified benefits like the full death benefit will not be available until the plan has been in effect for a certain time frame usually for 24 to 36 months. Meanwhile, if you die due to natural causes before this waiting period, the beneficiary will get a limited portion of the death benefit because full benefits are only paid in case of accidental death.
3- Pre-need Insurance
It is an agreement with your funeral service provider that includes some particular products and services you choose via the funeral service. In that case, the policy’s death benefit will go directly to them instead of the beneficiaries you have selected.
Also Read: No Exam Burial and Final Expense Life Insurance
Is it possible to buy burial insurance while having another insurance policy?
Surprisingly, yes! Here are some of the considerations that might go into adding up a burial insurance plan. If you lie in any of them, you should add up a burial insurance policy:
When you are single
Getting a burial insurance plan will help you to not burden your surviving family members with funeral costs. If you get whole life or term life insurance you can also provide some financial support to your aged parents or siblings.
When you have a young family
Burial insurance’s payout is enough to cover your funeral and burial expenses while whole life insurance will give your loved ones the resources they need to maintain their daily life expenses. Life insurance can easily replace some or all of your income, pay off debts, and educational expenses, and cover final expenses.
When you have an established family
Having a life insurance policy can be an integral part of your overall retirement investment. Burial insurance as an additional policy will be helpful as it ensures that your loved ones will be financially stable and will not be burdened with debt after your death.
When you are retired or getting retired
Adding burial insurance with a life insurance policy will make things easy for you. After your untimely demise, your family will cover funeral costs and other unexpected final expenses with death insurance. Whole life insurance will be surety of their secured future and in this way, you can preserve the retirement after working so hard for ages.
Conclusion
That’s all about burial or death insurance plans. We hope more of your queries get resolved from this blog, however, if you still have any you can contact a professional advisor who guides you best according to your situation and circumstances.