The terms “funeral insurance” and “burial insurance” generally refer to small life insurance Opens a New Window. policies marketed to people who want to leave a little money behind for their families to cover final expenses.

Burial insurance is a whole life insurance with a relatively small face amount up to $25,000 or $50,000. It is designed to help pay for your funeral and burial expenses, and leave some money to loved ones, if you wish.

How much is a funeral?

The average funeral in the US costs over $11,000. This includes the service at the funeral home, burial, and the headstone installation. This doesn’t include other expenses such as an obituary, flowers, food for guests, etc.

If you have $11,000 or more in savings, then you don’t need burial insurance. If, however, you don’t have that money saved, and the people around you will go into debt because you don’t have that money (and you care about them), then you should buy a burial life insurance policy.

Which Type of Policies Are Burial Insurance for seniors?

You could really buy any type of life insurance to cover burial expense, such as term, whole or universal life. However, if you are looking for a death amount of $25,000 or less, aren’t in the best of health, and are between the ages of 50-89, there are three types of coverage you should be looking at:

Level Benefits

This is a whole life policy, which means this policy doesn’t have an expiration date, and it will last a lifetime. These types of policies are for people who are in decent health who can answer yes/no health questions.

They also have level benefits, which means that there is no waiting period in which the policy is in effect. Once the underwriter issues the policy, the insurance company will pay the benefits right away should the policyholder die.

Graded Benefits

There are a few different types of policies that offer graded benefits, which will vary from one insurance company to another.  The first type is called Graded Death Benefit, which will pay 40% of the death benefit amount for the first year, 75% after 2 years, and will only pay 100% of the benefit in year three. Keep in mind that you still need to answer some health questions, this isn’t a guaranteed issue.

The second type is Modified Death Benefit, which will pay 110% of the total premium paid for the first year, 220% of the paid premium for the second year, and only 100% of the total death benefit in year three and beyond.

Not all graded benefits are guaranteed issue. Some policies have graded benefits BUT still, require you to answer some yes/no health questions on the application.

Guaranteed Issue

Guaranteed issue life insurance policies are policies that guarantee your acceptance…with a CATCH. They all have 2-year clauses or an exclusion that says that if you die within 2 years, not accident-related, they will not pay the full death benefit amount.

In other words, if you bought a graded benefit plan with a $10,000 face amount and die after 6 months, all you get is your monthly premiums back, and 10% interest (depending on the insurance company).

With a guaranteed issue policy, you will not have any health questions to answer or an exam to take. Your approval depends on 3 things.

You must be:

  • Between the ages of 50-89.
  • A US citizen or legal resident.
  • Able to pay the premium.

What is the difference between Burial Insurance and pre-need coverage?

It is important, however, not to get burial insurance confused with pre-need coverage, as these two products are not the same thing. While pre-need funeral coverage is also designed to set aside funds for a person’s funeral before the need arises, these funds will go directly to the funeral home and will typically pay for the services that are provided by the funeral home, as well as the products that are purchased from there.

Where Can Burial Insurance for Seniors  Be Purchased

Today, there are a variety of places where burial insurance can be purchased. Under some state laws, a funeral home may be allowed to offer this type of insurance coverage. However, in most cases, it is sold via licensed life insurance entities such as agents and/or brokers.

While you can purchase a burial insurance policy via individual insurance carriers, this is often times not the best route to go for obtaining the very best premium price.

It is typically best to work with either a company or an agency that has access to more than just one final expense insurance carrier.

That way, you can compare all of the information that you need in just one convenient place, without the need to go from one insurance company to another. This can save you a great deal of time and frustration throughout the application process.

How to Obtain a Policy Quickly and Easily Today

When you’re ready to compare and find the best burial insurance policy for your family’s needs, we can help.

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