Questions You May Have Before Buying a Burial Insurance Policy

The world has experienced a tragedy due to the pandemic. A lot of lives have been lost and a lot of people’s finances. In such circumstances, you would want to avoid the topic of a loved one’s death and all things related to it.

However, it is inevitable, and as the pandemic has happened, can occur when least expected. The expenses associated with the funeral that follows are also not easy to handle for many, which is where burial insurance comes in.

What You Might Want To Know Before Buying

 Look up articles by Gary P. Cubeta from insurance for final expense to get an idea about final expense insurance if you are new to it. And it’s prudent; there are many aspects to burial insurance that one must know.

Read on to explore this financial asset in greater detail, and have those questions answered. They could lead you to a burial insurance policy that covers all your needs.

What Constitutes Burial Insurance Exactly?

 As mentioned previously, burial insurance, also called funeral insurance, is specially made to cover final expenses. It is a kind of whole life insurance, which means the coverage lasts the insured’s entire lifetime. This feature is in stark contrast to term insurance policies that expire after their coverage deadline.

The total insured amount is smaller than other insurance types, usually in thousands to tens of thousands. The premiums paid are also correspondingly lower.

Won’t My Regular Insurance Policy Suffice?

 Your typical insurance policy and burial one have different objectives. The former helps with the hefty expenses occurring during life, such as a mortgage, education, supplementary income, etc. It’s directed at families with children to raise.

Funeral insurance, on the other hand, focuses on final expenses. Anything else is a bonus, and that depends on the insurance company and choice of product.

Other types of insurance policies rarely cover funeral expenses. They might make it an option, but that will push up premium prices.

When Should You Purchase It?

 Burial insurance targets the senior citizen market. Most, if not all such plans, have age-related eligibility from around 50 years. Gender also decides the age.

The exact age to purchase it is a personal decision and depends on your needs and circumstances. Starting at a relatively early age will entail lower premiums, but you could very well be wasting money. Buying it too late could leave you with a high premium cost, or worse, ineligible.

Take stock of your present situation and see what suits it best.

What Are The Alternatives?

Funeral homes offer pre-need plans, which behave like burial insurance. However, the payout from them goes directly to the funeral home instead of a beneficiary. You get to arrange your funeral the way you like, and the amount will get calculated on that cost. That amount will be locked in. You should read the caveats, however, as there will be many.

Some other ways to pay for a funeral are:

  • Payable on Death Account: you put away some money and name who can access it after your death.
  • Funeral Trusts: Similar to POD, but you nominate a trustee who can access the funds.
  • Trusts: the trust owns the life insurance policy, and a trustee claims the money after your death, which will get distributed according to your stated wishes.
  • Savings account
  • Social Security: pays $277 to the nominee.
  • Federal and State Assistance Programs
  • Personal loans
  • Veterans Assistance

What Are Its Salient Features?

  • It is Whole life, meaning it won’t expire after a term.
  • You can choose to have it pay the funeral home directly or a beneficiary.
  • Some policies give direct cash to beneficiaries, which they can use as per their need.
  • The coverage is in the $5000 to $25,000 range usually.
  • No medical tests are required. Instead, you’ll have to answer a medical questionnaire, and eligibility to apply will depend on your answers and that policy’s criteria.
  • There’s usually a 2-year waiting period before the policy comes into effect. If you die within it, the beneficiary will receive a portion or no money at all, depending on the policy. That graded payout amount is higher the closer the death is to that deadline.

Which Medical Conditions Would Disqualify Me? 

  • Chronic conditions that require hospitalization.
  • ALS, Alzheimer’s, Parkinson’s, etc.
  • Non-functioning limbs/permanent disability.
  • Substance abuse-related conditions.
  • AIDS, Auto-immune diseases, and the like.

Check with your agent to know about those terms and conditions.

Final expense insurance can come to the rescue at one of your family’s most difficult times. With careful planning and investing, you can rest assured that you will rest in peace.

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