How will your bills and funeral expenses be paid?
Funerals are one of the most expensive purchases many people will ever make. A traditional funeral, including a casket and vault, costs about $6000, and extras like flowers and obituary notices can add thousands of dollars to the average funeral cost. Many funerals run well over $10,000. To make matters even worse, its estimated that millions of Americans have no life insurance to pay for the average funeral. Unfortunately, many people wait until they are either too old or not healthy enough to purchase traditional life insurance. The term insurance advertisements touting $500,000 of life insurance for a dollar a day don’t apply to the 75 year old with some pre-existing health problems.
Burial insurance is the answer
If your family could not afford to pay for your funeral without sacrificing their retirement or other savings, a burial insurance policy may be the answer. Burial insurance policies are typically simplified issue whole life policies at are available with death benefit amounts from $2,000 to $50,000. Whole life insurance is permanent insurance that can build a cash value over time. Features of a burial insurance policy include:
- No medical exams – just a few simple questions
- Virtually guaranteed qualification
- Coverage cannot be canceled because of age or health
- Rates never increase
- Lifetime benefit
- Generally income tax-free death benefit
Getting a policy
Most companies will allow you to buy a burial insurance policy between the ages of 40 and 85. The rates are surprisingly affordable and you can apply for lower dollar amounts to fit most any budget. Some companies will allow an insurance agent to take your application over the phone, while others will require a signed application. I would recommend an insurance broker that represents more than one company so you can be be assured of getting the best rate. You can generally start the process online by providing a little information. After you find a company that offers burial insurance, an agent will follow up with you to make sure you qualify and to quote you some rates.
The proceeds from burial insurance can be used for any purpose, not just paying for a funeral. Another benefit of coverage is the ability to pay for any outstanding medical or hospital bills, or just leaving an inheritance. If your concerned about your own funeral costs or if you have a parent or loved one that needs to have a plan, purchasing burial insurance is a wise choice. None of us want to be a burden on our families and for a few dollars per month, we can have the peace of mind that we have a plan in place.
