close

A Guide to Burial Insurance for Seniors

Burial insurance offers insurance that covers final expenses for seniors. It is not exactly the same as traditional life insurance. This possibly leads to some confusion over how burial insurance differs from life insurance policies, along with lack of understanding regarding the similarities between burial insurance and life insurance policies.

The Senior List presents this guide that explains burial insurance in detail, and explains the similarities and differences between burial insurance and other life insurance. This burial insurance guide informs seniors about making the best burial insurance decisions based on their individual needs.

What is Burial Insurance?

Burial insurance is a whole life policy that pays benefits to the named beneficiary in the event of the death of the insured as long as premiums are up-to-date. Sometimes referred to as ‘funeral insurance' or ‘final expense' insurance, this type of insurance shares both similarities and differences with other types of life insurance.

Some individuals take out life insurance policies with a face value of tens of thousands, up to millions of dollars in payable benefits upon the death of the insured individual. Burial insurance policies have considerably smaller maximum face values on policies offered by insurance companies that sell burial insurance.

A few providers offer burial insurance above $25,000, although most burial insurance policies come with a $10,000 to $25,000 maximum face value. The smaller amount of burial insurance policies is the reason that some companies and policyholders refer to these policies as insurance that pays final expenses or their funeral costs.

Seniors that do not want loved ones bearing the responsibility of paying for their final expenses potentially find burial insurance an option that covers their funeral costs and perhaps leaves a little left over for loved ones.

Seniors that choose a burial insurance policy over traditional life insurance typically do not worry about rising premiums. Term life insurance policies expire at the end of a designated term, leaving the insured with the obligation of paying increased premiums at every renewal, and as they enter into another age category.

Coverage does not decrease as you age. Coverage does not expire at the end of a designated term. Insurance companies do not cancel burial insurance policies if you pay premiums when due or by the end of a designated grace period.

Seniors that consider traditional life insurance as an option sometimes discover that purchasing life insurance is not as easy as they likely assumed when first considering the option. Some life insurance companies have health-related questions, or other pre-qualifications, such as requiring a medical exam, or asking applicants about their lifestyle.

Seniors that experienced medical issues in the past that do not affect them when applying for life insurance still have a risk of receiving a denial when life insurance companies consider past, along with present, medical history. Did you know that you are a potential risky applicant for some insurance companies by something as simple as traveling out of the country? Traveling to an exotic location potentially excludes you from life insurance approval in some cases.

Insurance companies offering burial insurance often skip the medical exam and asking about your travels. These are some reasons that some burial insurance policies have ‘guaranteed acceptance' or other features that likely appeal to seniors.

Some companies offering burial insurance provide another benefit that seniors possibly consider when making decisions about the insurance company that best provides for their policy needs. Burial insurance policies sometimes build cash value over time. If you needed cash for something unexpected or simply wanted extra money for travel, you potentially have the option of borrowing on the cash value of the policy. You pay the loan back with interest, so make sure you understand this before taking out the cash value loan.

How Much Burial Insurance Do I Need?

The ideal amount of burial insurance varies from one senior to another senior considering the purchase of a burial insurance policy. Companies often offer burial insurance policies starting with a $2,000 to $3,000 face value. This amount does not cover the cost of a funeral or burial today. The National Funeral Directors Association indicates that the average funeral costs for 2017 were well over $8,000.

Seniors that cannot afford a larger burial insurance policy have the option of purchasing a policy with a smaller face value and adding another policy later. If an insurance company provides burial insurance policies up to a maximum of $25,000, this means that policyholders likely have the option of purchasing one policy with a face value of $25,000 or the option of adding smaller policies that add up to the maximum allowed by the burial insurance company.

Seniors likely understand that like most other things, funeral costs rise over time. Consider whether you want to purchase a policy that only covers the basics such as funeral and burial costs. Perhaps you have special requests for your service that adds on to the costs, or perhaps you want to leave a little something for loved ones.

Where Do I Purchase a Burial Insurance Policy?

Look for insurance companies that offer burial insurance, an offering sometimes reserved specifically for seniors. Companies offering burial insurance apparently realize that some seniors did not plan, or could not afford to plan, for their final expenses earlier in life. Many seniors living on fixed incomes have the opportunity to purchase insurance that covers their funeral and burial costs.

Carefully consider the various burial insurance companies and their policy offerings. Some companies have very limited options for burial insurance, while other companies offer burial insurance starting at age 45 through age 80 or possibly beyond this age.

Understand the maximum face value of the policy. Make sure that you understand all requirements, including those that possibly affect your privacy. Does the company require that you enter your personal information online, or do they offer to send you information that you have the opportunity to review in the privacy of your own home?

Most burial insurance policies have various age groups and rates listed that possibly confuses some seniors. Remember that burial insurance premiums do not normally increase with age. The varying amounts are the costs of purchasing the policy today. An individual that purchases burial insurance today at age 60 typically pays a little less than another senior purchasing the same type of burial insurance who is 70 years of age. If you decide to add another policy later, remember that costs associated with adding another policy reflect your age at the time that you make the additional policy purchase.

Do your homework when considering the best burial insurance company and policy. If you are not confident about your ability to make the best decisions, or you do not understand something, ask a trusted loved one for assistance in choosing the ideal burial insurance.

Choose burial insurance that best meets the costs of your final expenses, and your desires for your final wishes. There are many options available for seniors seeking affordable burial insurance plans within their budget.