Death is a bitter truth of life, and being prepared for it is a responsible act. In today’s world, everyone is concerned about the financial security of their loved ones. One of the easy ways to ensure financial support for your family during difficult times is by purchasing burial insurance.
Burial insurance is a type of life insurance designed to cover the costs of end-of-life expenses after the death of a policyholder. Such expenses may include funerals and burials. Moreover, in this blog post, we will discuss in detail what burial insurance is and how it works. Please read the article to get the most out of it.
What is Burial Insurance?Burial, funeral, or final expense insurance is whole life insurance. It is typically designed to cover your funeral, burial, and other end-of-life expenses. Having a burial insurance policy can assist in relieving the costs your family has to face on your death. This policy is usually more minor in coverage than traditional life insurance and easy to qualify for. It has lower face values and comes with a simplified underwriting procedure. This makes them more accessible to individuals of all ages and those with some health issues.
How does burial insurance work?When buying burial insurance, you must choose the coverage amount and decide who will be the Beneficiary on your death. When you pass away, the designated Beneficiary has to contact the insurer to state the claiming process as soon as possible. However, the Beneficiary must provide identification, a claims form, and a certified copy of the death certificate. Below is a step-by-step guide on how burial insurance work:
1- Policy ApplicationFirst, you have to apply for the policy with the help of an insurance provider. This process generally involves answering some health questions, but it’s not that complicated required for standard life insurance. However, some policies may not require a medical test, making it more convenient for those with health concerns.
2- Select a Coverage AmountWhile applying for burial insurance, you must choose a coverage amount representing your death benefit. This amount can range from a few thousand dollars to about $25,000 based on the insurance provider and your specific requirements.
3- Premium PaymentsLike any other insurance policy, burial insurance needs regular premium payments from you. You can pay the premiums monthly, quarterly, semi-annually, or annually, according to your preference. Furthermore, the amount you will pay depends on factors like age, health condition, coverage amount, etc.
4- Selecting BeneficiaryYou have to designate a beneficiary or maybe a beneficiary who will get the death benefit on your demise. This can be a family member, friend, or anyone you want to choose. But it’s essential to update your beneficiary designation, specifically when your circumstances change.
5- Claim ProcedureWhen you die, your beneficiaries must file a claim with the insurer to get the death benefit. It is a relatively simple process in which the Beneficiary has to provide a death certificate and any other documentation needed.
6- Use of the Death BenefitOnce the claim gets approved, the beneficiaries will pay the death benefit. They can use this money to cover funeral and burial expenses, medical bills, or any other financial obligations they have to pay.
What does the burial insurance policy cover?A burial insurance policy is typically designed to cover the costs of expenses your family has to face in case of your sudden death. But there are no limitations on how the death benefit can be used. The beneficiaries designated have to use your payout for:
- Funeral arrangements like viewing and service
- Burial costs
- Cremation costs
- Medical bills
- Legal costs
- Outstanding costs
What are the available types of burial insurance?There are three types of burial insurance and these are:
- Simplified Issue