What Is The Difference Between Life Insurance And Burial Insurance?
Losing a loved one is a traumatic event that comes with significant expenses. The median cost of a funeral ranges between $5,000 and $10,000, making it important to ease the financial burden on the people you love. Here’s a breakdown of the difference between life insurance and burial insurance:
|Burial Insurance||Life Insurance|
|Coverage||Covers funeral and burial expenses, and sometimes medical bills||Covers funeral costs and can replace income, pay off debts, and help with college tuition|
|Benefit Amount||Usually offers a smaller benefit amount than traditional life insurance since its purpose is specific||Can vary based on policy and needs|
|Product Availability||Can be purchased as a stand-alone product or as a smaller life insurance policy to cover final expenses||Can be purchased as a comprehensive life insurance policy that also covers final expenses|
While burial insurance can prevent the passing of substantial debt to surviving family members, a more comprehensive life insurance policy can provide financial support to aging parents or siblings. Additionally, life insurance policies will pay a lump sum when you die to a beneficiary of your choice, which can be used to pay for your funeral or any other general financial needs of your survivors. The payment will be made soon after you die and won’t have to go through probate.
It’s important to note that some life insurance companies, such as New York Life, don’t sell stand-alone burial insurance as a product. However, a separate, smaller life insurance policy can be purchased to cover final expenses. Supplementing a life insurance policy with burial insurance can allow you to settle your affairs by covering funeral costs and unexpected final expenses like medical bills.
Ultimately, making sure your loved ones are protected financially after you’re gone is essential. A New York Life financial professional can help determine what’s right for you.