Over 30 million Americans have no burial insurance. Among those who died in 2015, over one-fifth received no financial help from their funeral homes. If you want a dignified final resting place for your loved ones, opt for proper burial insurance.
A burial insurance policy is an intelligent way to avoid the high costs of funerals (between $8,000 and $10,000) when you die. Burial policies help pay for the funeral costs, final expenses, burial, and headstone or cemetery fees without affecting your absolute income tax liability.
And the best part is even senior citizens aged more than 70 years can now get it. Yes, you have heard it right. Burial insurance for seniors over 70 isone of the highly demanded policies, says Gary P. Cubeta from Insurance for Final Expense.
The insurance policy is backed by a plethora of reasons that make it lucrative to opt for burial insurance. Learn how to make the most out of your burial insurance.
Average Cost of a Funeral
As per the National Funeral Directors Association, the average national expense of a funeral with a viewing and burial was $7,620 in 2019. The cost of a vault, which is usually required by a cemetery, is not included in the amount. When a vault is used, the average expense is $9,125.
A funeral without a burial casket and urn cost around $5,150 on average across the country. In some cases, a cremation coffin is needed, bringing the estimated average cost to $6,640, along with an urn.
How Does Burial Insurance Work?
Burial insurance is a kind of life insurance that provides the beneficiary with a cash payment upon his or her death after a terminal illness or injury. It also provides economic support to eligible family members. It’s a popular choice among those who wish to spread their medical costs over several years and want to end their dependence upon costly long-term health care.
Burial insurance protects the next of kin (the closest living relatives) against unplanned out-of-pocket funeral expenses for the six months following a deceased person’s funeral.
Medical Exam Needed or Not?
In most cases, burial and funeral insurance plans do not require a medical examination, and the paperwork can ask a few health questions — or none at all. The rates are determined mainly by age and gender. One of the more common types of whole life insurance is burial insurance:
Simplified Issue Life Insurance
There would be no medical test and just a few health queries on the form, but answering “yes” to all of them may disqualify you. Simplified issue forms, for example, often ask if you are residing in a nursing facility or if you have HIV.
Guaranteed Issue Policy
There is no need to undergo any medical examination. The premium is guaranteed never to increase as you get older or because you become unhealthier. And that’s why it’s considered one of the best burial insurance for seniors over 70.
Cost of Final Insurance
Since burial insurance policies need little or no health records, the expense of the premium is high. According to the study, a fit 50-year-old person will get $100,000 in term life insurance over 30 years for less than $1,000 in funeral insurance. For less than $10,000, a 50-year-old man with hypertension can receive the same term life insurance as a $10,000 funeral policy.
Factors That Determine the Cost
- Age
- Health
- Amount of coverage
Example
A $4,000 assured issue policy for a 65-year-old male, for example, would cost about $25-30 per month, while the same policy for a 65-year-old female may cost about $34 per month. Based on your medical records, an underwritten policy will most likely cost less. These are all estimates to provide you with a rough guess.
Death Benefits in Your Policy
Irrespective of whether natural causes or an injury causes the death, a Level Policy would compensate the entire face value of the policy if it happens. For accidents attributed to natural causes during the “restriction period” (typically 1 or 2 years), a Modified Policy offers a decreased death benefit. In most cases, regardless of where the death happens, an unnatural death within the restriction time would count for the maximum death benefit.
Summing Up
Burial insurance is covered by the standard American liability and personal injury policies. It protects the executor’s estate against any loss of assets arising out of a natural, accidental, or undetermined death of a member of the insured person’s family. In certain states, including California, Texas, and New York, death benefit coverage also may be provided by statutory death benefit insurance policies.
