burial insurance

Also called funeral insurance, burial insurance refers to a life insurance policy that’s dedicated to covering your burial, funeral, and other such expenses. Provided the funeral costs, owning a burial insurance policy helps you relieve almost any price your family members might face. What can be more thoughtful than reducing their stress?

This insurance does not ask for any medical examination. However, the applicants might be enquired about their age, history of smoking, and other serious conditions. You get guaranteed acceptance of certain policies. While others might need a two-year period of premium payments. Let’s learn more about this cash policy in this article.

How Do Burial Insurances Work? 

How Do Burial Insurances Work

On applying for funeral insurance, one might select the coverage amount they want. Further, they might add a life insurance beneficiary. The burial insurance does not need any life insurance medical test, although the application might ask some significant health questions. The pricing strategy depends mainly on gender as well as age. 

Suppose the burial insurer passes away. Then, the beneficiary can file a claim with the same firm as life insurance. Generally, they are asked to submit a death certificate copy. It usually has any of the given types of whole life insurance:

Simplified Life Insurance IssuesGuaranteed Life Insurance Issues
The application procedure generally have no medical exam, instead a few health-related questions. No health-related questions asked, and there is no need for any medical examination. 
If you answer “yes” to any of them, you might get disqualified. There is no way you can be turned down here. 

The only con of these applications is that such policy usually consists of a graded death advantage. This means if you die within the first three years of purchasing the policy, only a premium refund will be provided to the beneficiaries. Only accidental deaths are fully covered from the commencement of the policy.

Read More: The Types Of Business Insurance Needed For Every Business

Types Of A Burial Insurance? 

Types Of A Burial Insurance

When it comes to discussing the types of funeral insurance, we are usually talking about these three:

1. Simplified Life Insurance Issue

For starters, you might apply for a “simplified issue life insurance” where you might be asked about your medical health. However, there is no need for a medical exam. The firm generally gathers extra information related to you via third-party sources. This can be anything from your prescribed drug usage to your driving records. 

With simplified life insurance issues, you can easily discover whether or not you are approved for the application. A benefit of this burial insurance policy is that the cost is comparatively low than other forms. A simplified issue policy might also provide greater death benefits since they have the benefit of graded death. 

2. Guaranteed Life Insurance Issue

When you buy this particular insurance policy for your burial, nobody will ask you health-related questions. Purchasing guaranteed issue life insurance is a beneficial way to cover your expenses; there are some disadvantages: 

  • Out of all life insurance, it might be the most expensive.
  • The maximum coverage amount is not too much compared to others. It only consists of coverage of less than $25,000. 
  • It provided graded death benefits. 
  • You have to be 50 years or more in order to opt for this funeral insurance. 

3. Pre-Need Insurance

This burial insurance is available from the burial home where you are willing to carry out these services. You might contract with the funeral house for your desired services. Further, the funeral provider may sell pre-need insurance policies to you. 

They might also be a licensed funeral insurance agent. After you pass away, the payout of the policy shifts straightforwardly to the funeral house. Thus, the home is responsible for financing all the arrangements you have selected. 

Pros And Cons Of Funeral Insurance

Pros And Cons Of Funeral Insurance

Burial insurance might just be an alternative if you want life insurance just to cover your funeral expenses. Although it has certain benefits, there are certain drawbacks, too. Here I have jotted down the necessary factors that will help you make an informed decision. 

Benefits:

  1. As stated earlier, funeral insurance does not ask you for a health exam. 
  2. There might be a few relevant health-related questions. 
  3. In policies like the “guaranteed issue life insurance,” nobody can restrict you from your rights. 

Cons:

  1. If you have no health exam, there’s no way you will receive a discounted rate. Practically, when you have good health. 
  2. With no to little health information, the policy cost might exceed too much.
  3. The policy is most likely to own a graded death advantage which usually pays out simply the refund. Also, that is applicable if you pass away within the first two or three years of purchasing it. 

Read Also: What Is A Hold Harmless Agreement? – Let’s Take A Look

The final part of our article focuses on the questions about burial insurance usually asked by readers. So if you are dealing with any such questions, read more and get their answers: 

Q1. Do I Have To Use My Life Insurance Payout To Cover The Funeral?

Ans: As a beneficiary, you do not have to utilize your life insurance payout to cover your funeral expenses. This is why I keep stressing the fact that you should select a reliable life insurance beneficiary. Make sure they not only respect your instructions on using the life insurance payout correctly but also respects it.

Q2. What Is Meant By A Death Benefit?  

Ans: A death benefit refers to the amount of money your life insurance firm pays to your beneficiaries after you pass away.

Q3. Is There A Need For Burial Insurance If You Are A Young Adult?

Ans: In case you are a young and healthy adult, you are not going to die very soon. Not at least naturally. Hence, the cost of paying for burial insurance might not be worth it. The insurance is particularly best for people aged between 50-85 years who have little time left.

Summing It Up

For people having ill-health or cannot pay for an extensive life insurance policy, funeral insurance might be an optimum way. Not only does it protect your family members from the unpredicted funeral expenses, but it also gives them a sense of relief. 

So if you are thinking of buying a burial insurance policy, don’t forget to consider the aforementioned factors. They are your true mentors when you get stuck on what to do after you die. 

Well, that was all about it! Let me know your take on this by commenting below the article. Happy reading!

Read Also:

Leave a Reply

Your email address will not be published. Required fields are marked *