Burial insurance is a type of whole life insurance that can help cover funeral expenses after the policyholder dies. It’s a widely available option in Florida and throughout the U.S. However, it can be more expensive than other options because there’s no chance that the policyholder can outlive it. This type of insurance generally involves monthly premium payments until the policyholder dies, but does it have any living benefits?
Many factors can play a role as it relates to whether an insurance policy has living benefits but it’s important to know what they are.
What Are Living Benefits?
Living benefits are specific benefits included in some insurance policies and activated once a specific change (as defined in the plan) has occurred. The change could be due to an illness or trauma but usually results in a drastic decrease in the life expectancy of the policyholder, like 24 months or less.
The benefits could allow the active policy owner the opportunity to receive payments that can range from 25-100% of the policy’s death benefit. If there’s a remaining amount after the person dies, it most commonly is given to the beneficiaries after the company takes their advanced payment fees.
Does Burial Insurance Have any Living Benefits?
Burial insurance policies provide death benefits, which are benefits given after the policyholder dies, but do they have living benefits? This is a valid question — considering burial insurance is usually the most basic form of life insurance and is specifically geared towards covering the costs of your final arrangements. Some burial insurance policies may have some living benefits, but it depends on what type of policy it is and the company offering it.
Burial insurance is generally one of these varieties of life insurance:
- Simplified issue: On this application, you’ll likely be asked if you’re living in a nursing home or if you have HIV. Answering “yes” might disqualify you.
- Guaranteed issue: you can’t be turned down in this case. No medical exam is required and no health questions will be asked.
Burial insurance is funded through premium payments that are invested and may increase in value. This can offer an option to borrow money from it. Aside from being able to simply borrow money, the policy may have legitimate living benefit protections that kick in if there’s a severe illness or trauma that causes a severe change in life expectancy.
Want to Learn More? Give Us A Call
A burial insurance policy offers a death benefit that’s paid out after the policyholder dies. With it being a type of whole life insurance, there could be a possibility that the policy owner may experience a sudden decrease in life expectancy due to an illness or trauma. This is when some burial plan may offer specific life benefits to assist in paying for costs for the remaining part of the person’s life.
Before determining if burial insurance is a feasible option, each policy should be reviewed and compared, especially for whether it has living benefits or the possibility of growth in case anything unexpected happens. For any questions, or if you’re ready to get started, please call Senior Life Services at 800-548-3249.