Funeral expenses can be quite costly. While a small grant from Social Security can help, the best way to ensure your loved ones have money to carry out your wishes is through a burial policy.
Burial insurance has lenient underwriting and is often “simplified issue” so seniors who have pre-existing health issues may qualify. It is also a cheaper option than other types of life insurance.
1. Burial Insurance
Burial insurance, also known as final expense insurance, is a type of life insurance that can cover funeral expenses. It is typically offered to people ages 50 to 85, although some companies offer it to younger individuals. This type of coverage is typically cheaper than prepaid funeral plans or pre-need policies, but it may not have the same benefits.
Burial insurance typically has lenient underwriting, and seniors often can qualify without having to take a medical exam. This is unlike whole life insurance, which has a more rigorous underwriting process and usually requires a medical exam. It is a good idea to get multiple burial insurance quotes so that you can compare options and find the right plan for your needs. You can do this on your own or work with a licensed life insurance agent.
2. Term Life Insurance
Burial insurance, sometimes called final expense insurance, addresses both practical and emotional needs. It can be bought online or by telephone without needing to undergo a medical exam and may cover the funeral ceremony, merchandise costs, and burial or cremation.
These policies are usually less expensive than a standard life insurance policy and they often offer lower death benefits. They are available to adults ages 50 to 85 and some companies even provide coverage beyond this age.
Another option is a guaranteed issue policy, which doesn’t ask health questions or require a medical exam and is sold to seniors up to age 85. However, these policies typically have a two-year waiting period and only pay a small amount to your beneficiaries upon your death.
3. Final Expense Insurance
A final expense insurance policy is a type of life insurance. It usually pays a tax-free cash benefit to your beneficiaries. Beneficiaries can use the money however they see fit. This is unlike a preneed plan that gives funds to the funeral home.
Typically, these policies are smaller than whole life policies. They also require less extensive underwriting and do not have a waiting period. Most people can qualify for a policy by answering just a few health questions.
Many seniors buy a final expense policy to ease the burden of end-of-life expenses on their families. They do not want to leave their loved ones with the cost of a funeral or other unplanned costs. A final expense plan is a good alternative to a pre-need funeral arrangement.
4. Pre-Need Plans
Pre-need funeral plans may seem logical to ensure loved ones don’t get stuck footing the bill for a memorial or burial service. However, a better idea is to purchase a life insurance policy that covers your final expenses instead.
These policies offer much more flexibility and are typically less expensive than a prepaid funeral plan. Plus, they can be canceled within 7 days of purchase.
If you’re a funeral home owner, you can help your community members understand their options by promoting final expense insurance as an alternative to a prepaid funeral plan. For instance, you can host an informative workshop at a senior center or speak at an AARP event. By doing so, you can establish your funeral home as a trusted and respected resource.
5. Medical Insurance
A lump sum payment from a medical insurance policy is usually made to the beneficiary of the insured and can be used for funeral expenses. This type of coverage is typically available through retirement and pension plans or some social groups and unions.
Some senior groups also offer burial policies and final expense insurance. Burial insurance is similar to whole life insurance but is typically more affordable and easier to qualify for. These types of policies usually require no health examination and only ask a few simple questions.
Having a plan in place for covering end-of-life costs can help your loved ones avoid price gouging and financial stress after your death. It is important to choose the best option for you and your family.