There are several common questions when it comes to burial insurance. Many people are wondering what it exactly it is and whether or not it is something that they will need. They also want to know how much it will cost. Here are some answers to these very common questions about burial insurance.
How Burial Insurance Works
Most insurance companies will offer a life insurance policy that is for final expenses or the burial process. These are not large policies, but they will cover things like the funeral, coffin, and gravestone so that your heirs don’t need to worry about these costs. You may also want to ensure that you are “taken care of” after death, and your memorials are nice. These policies are often available to those who are between the ages of 50 to 85. There are some companies that will offer this type of policy to people who are over the age of 85.
A burial insurance policy is a permanent policy and not a term life policy. This means that the policy does not have a specific amount of time for the coverage. As long as the premiums are paid the policy does not expire. Additionally, this type of policy will typically have a cash value component. This is where tax deferred savings will be built over time. The funds can then be borrowed against or withdrawn if the holder chooses to do so. However, it is important to know that any unpaid loans will go against the death benefit.
Funeral Insurance Benefit Levels
There are 2 types of benefit levels available for a funeral insurance plan. A level benefit means that the full amount of the policy is in force the day that the application gets approved. A graded benefit level means that there will typically be a 2 year waiting period before the full amount of the policy will be in force. Should the insured pass away; the carriers will return the premiums that have been paid along with a certain amount of interest. The amount of interest that is paid will depend on the insurance company, but typically it is around 10%.
Graded policies are typically used for those who have severe health issues. These are guaranteed issue plans, which means that no matter what you will be approved. If you are someone with a serious health impairment this is the type of plan that you will need to consider.
When you are applying for a burial insurance plan, typically you will not need to have a medical examination. This means that you do not have to submit a urine or blood sample. This can be good news for someone who has some health issues.
An applicant will be asked several questions on the application for the final expense policy. The company will want to know the age of the applicant, as well as the height, weight, gender, alcohol usage, tobacco usage, income, occupation, and lifestyle and any dangerous hobbies.
Since there is no medical examination required, an applicant will typically be approved rather quickly. Once insured you will have the choice on how you want to make your premium payment for the policy. The most common option is to make a monthly payment. Buyers may also choose to make a single lump sum payment. This means that the policy will be paid in full and no further payments are necessary.
Finding Affordable Burial Insurance Policies
When you are looking for final expense insurance it is important to compare quotes and policies from several insurance companies. This is because the premium charged for these policies will vary a great deal depending on the insurance company that is used.
Not every burial insurance policy is the same. There are a few things that you should look for when you are comparing the different policies that are available. Some of the questions that you should ask include:
- What is the initial premium for the policy and will that change over time?
- Is there a waiting period before the full amount is available?
- How difficult is the qualification process?
- What is the maximum coverage amount?
When it comes to life insurance policies, the younger that you are, the lower the cost is going to be. If you begin the process during your early 50s the cost for this type of policy can be quite low. Since you do not need to go through a medical examination, those who may have some type of adverse health condition will typically be able to qualify for coverage. This means that a family of a loved one will be able to get the financial protection that they need at an affordable rate, even if they have not been able to get another type of life insurance policy.
Once a person has obtained a final expense life insurance policy, the premium is typically locked in for the entire time of the policy. This means that the costs will stay the same and will not go up with time. This is an advantage for those who are on a budget or are living on a very fixed income.