Most senior citizens who are looking for a burial insurance policy prioritize affordability. And understandably so, since most of them are either retired or out of work. When selecting an affordable burial policy, there are a few things you need to keep in mind. This article explains five such things every burial insurance buyer should know.
There are Different Types of Burial Policies
When you’re in the market for a burial insurance policy, you’ll realize that there are different options available. Companies are known to market their products differently, even when they serve the same purpose. So you’ll have final expense insurance, senior life insurance, pre-need insurance, prepaid funeral insurance, etc. Generally speaking, all of them do the same thing, which is to cover your funeral cost. But there’s a subtle difference.
In the case of burial insurance, you select a beneficiary who will receive the amount after your death. Often, this will be a family member who will carry out the funeral rites.
But in the case of pre-need insurance, the beneficiary is the funeral service provider. So the money goes to them after you die instead of your family members. They will use the funds to cover everything from transportation costs to casketing. One benefit of pre-need insurance is that it will protect against price inflation. So you’ll be unaffected if the price increases in the future.
Premiums Depend on Various Factors
If you’re looking for an affordable burial policy, then you must be concerned about the premiums. Burial insurance policies are known to be cheaper than life insurance policies. But the cost depends on various factors.
First is the coverage you want. The national median cost of a funeral in 2019 was about $7,640, excluding vault. If you include vault, the cost goes up to $9,135. Therefore, the higher your funeral cost will be the higher premium you’re expected to pay.
Other than that, the cost depends on your age, gender, and current health. If you’re suffering from a chronic disease, then the carrier may charge you higher.
Finally, the agent you’re working with may also play a decisive role in cost. So, factor in these things when calculating cost.
Simplified or Guaranteed Burial Policy
The burial policy cost will also depend on if you’re purchasing a simplified or a guaranteed policy. In the case of the former, the agent will underwrite your health based on the information you’ve provided. He will ask you to fill out a questionnaire that inquires about your current and past health. Based on the answers, he will offer you a higher or a lower quote.
But in the case of a guaranteed burial policy, you’re not required to answer any questions regarding your health. All applicants are accepted, but always at a higher premium rate.
You Can Get Denied at Times
Burial insurance policies are known to be easy-going and flexible. While that’s true, there are few eligibility requirements you must meet. One of them is the age factor. Some carriers will not include people over the age of 85, while others will offer coverage to people in their late 90s. If you’re a smoker, then you might get rejected. Similarly, people with disabilities or on government benefits may also face rejection, but this varies from carrier to carrier.
No Conditions on the Usage of Money
Finally, you should know that the beneficiary can use the money for anything besides the funeral cost. So you may want to include the cost of your mortgage or car loan into your burial insurance package. But, choose burial insurance and not a pre-need insurance policy.
Most final expense insurances are affordable for an average consumer.
You can further decrease the cost by discussing with an insurance agent. They are in a better position to offer you an affordable burial insurance policy.