What Is Burial Insurance? [2021 Guide For Seniors]

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    What Is Burial Insurance?

    Have you ever considered how much your funeral might cost?

    The answer might surprise you.  Once you add up the costs of the burial plot, casket, headstone, memorial service, funeral home rental, and other final expenses, the average funeral in the U.S. costs over $10,000.

    Funeral costs can be a massive financial burden to loved ones during a time when they are already grieving your loss.

    If a traditional burial is important to you, there is an affordable insurance policy, called burial insurance, that can serve as a solution.   These policies pay your loved one a lump sum payment upon your death to cover funeral expenses and burial costs as well as any other end-of-life expenses you may have.

    Let’s get into more details.

    Burial Insurance 101

    Burial insurance gets its name from how people use the policy’s death benefit payment.  

    That is, to cover funeral and burial costs as well as other final expenses (also referred to as “end-of-life expenses”).

    Don’t let anyone confuse you. Burial insurance is the exact same thing as:

    • Final expense insurance
    • Funeral insurance

    And because these policies all fall under the “life insurance” umbrella, they are often also referred to as burial life insurance, final expense life insurance, and funeral life insurance, respectively.  We’ll do using these interchangeably throughout the article.

    Burial Insurance = Life Insurance

    This is one of the most common questions about burial insurance.

    Life insurance is an agreement to make a payout (“death benefits”) to your beneficiary when you (the “insured”) die. 

    A whole life insurance policy is simply a life insurance policy that lasts your “whole” life (as long as you keep making your monthly premium payments!).

    Note that this differs from a term life insurance policy, which is valid for a pre-set length of time (called the “term”).  The most common “terms” are 10, 15, 20, and 30 years. 

    Burial Insurance Coverage

    Just because the policy is a “burial” insurance policy, this does not mean that your use of the funds is restricted.

    While people typically use the funds for funeral costs and other final expenses, your beneficiary can use the death benefit payout for any purpose.

    This could include paying medical bills, any financial obligations or outstanding debts you have, or even time off from work for you loved ones while they they grieve your loss.

    Why Purchase Burial Insurance?

    …Anyone who does not want their family to be stuck with a large bill for funeral costs!

    While it’s tempting to avoid the topic, if you’re 50 or over, it’s wise to seriously consider what your families’ financial needs would be if you passed away tomorrow.

    An average funeral these days can cost anywhere from $5,000 to $15,000, depending on location.  If you or your family does not have this much money to spend at the drop of a hat, it may be a wise decision to purchase final expense insurance.

    Family mourning in cemetery during burial
    Many people consider a traditional burial to be a more dignified option than cremation.

    This financial motive above is the largest and most tangible motivation for funeral insurance policy sales.

    However, people often have a deeper, more personal motivation when purchasing funeral insurance.  This is their desire to avoid cremation, whether for personal reasons, family reasons, or religious reasons.

    Cremation is still a relative novelty within American culture.  Many Americans are reluctant to give up the traditional, more “dignified” option (burial), where they may be put to rest next to family members and where their loved ones have a dedicated spot to “visit” and grieve.

    Burial Insurance Policies Build Cash Value

    Yes, some burial insurance policies do build cash value over time.

    This means that, while you’re paying for coverage every month or year, your life insurance company is setting aside a portion of your payments in a savings account.  You can borrow against these funds or withdraw them at any time you like.

    How To Purchase Burial Insurance

    To purchase burial insurance, you need to contact either the life insurance company you are interested in or an independent life insurance agent who can compare multiple policies for you.

    This can be done through a phone call or online consultation with an agent depending on what you’re looking for and what type of coverage is being offered (basic vs full).

    The process should take around fifteen minutes from start to finish if it’s your first time purchasing this kind of policy (and even less if not!). 

    Buying Burial Insurance Online Is Easy
    Burial insurance can be a "lifesaver" for your family and legacy, and it takes <10 mins to apply

    Major Burial Insurance Compaies

    Remember that burial insurance is just life insurance, so any major life insurance company likely sells burial insurance.  Some of the most well-known burial insurance companies are:

    • Globe Life
    • Colonial Penn
    • Mutual of Omaha
    • Gerber Life
    • AAA
    • AARP

    While you can buy from the insurance company directly, you’ll be better off using an independent insurance agent.  These agents will be able to help you compare your monthly premiums across dozens of insurance companies.

    Burial Insurance Costs

    The cost of burial insurance coverage primarily depends on your age.  Since most of these policies are guaranteed acceptance, age is the life insurance companies’ primary way of gauging your risk.

    Monthly premiums can range anywhere from $10 per month to $80 per month, depending on the size of the policy’s death benefit payout, and again, your age.

    Medical Exam NOT Required

    A key concern for many people is whether they will have to take a medical exam.

    The good news with burial insurance is that these policies are almost always “simplified issue” or “guaranteed issue” life insurance policies, neither of which require a medical exam.

    With “guaranteed issue”, this means that, as long as you meet the (age-based) eligibility criteria, you cannot be denied.

    For “simplified issue,” you will have to answer a few health questions, but again, you will not be required to take a medical exam.

    Conclusion: Is Burial Insurance Worth It?

    Here is how I would look at the decision:

    • Will you have enough in savings to cover the cost of an average burial and funeral (at least $7,000) now through the end of your life?

    If yes, you don’t need burial insurance.  If no, consider the following two questions:

    • How important is a traditional burial to you?
    • Is the alternative (cremation, most likely) acceptable to you, according to your personal preferences and religious beliefs?

    Consider A Guaranteed Issue Policy

    You should also consider how good your health is.  If you are in relatively good health, it will likely be cheaper for you to go for a traditional whole life policy (with full underwriting), as opposed to a burial insurance policy.

    If you have serious health conditions (or if you’re in your 80s), a burial life insurance policy will likely be more attractive to you, given that approval is guaranteed without a medical exam.

    In any case, please give yourself enough time to really consider this important and emotional decision.  And if you have any questions, don’t hesitate to reach out to us at hello [at] getsure.org.

    Warm Regards,
    The GetSure Team

    Rikin Shah

    Rikin Shah

    Rikin is the Founder & Head of Content at GetSure. He is a licensed life, accident & health insurance agent, with over 10 years of experience in the financial services industry. He holds a B.S. in Applied Mathematics from Columbia University and an MBA from The Stanford Graduate School of Business.

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