Burial insurance death benefits range anywhere from $2,000 to $50,000 depending on a variety of factors. Let’s take a closer look at these factors so that you can determine the amount of burial insurance coverage you need.
Step 1: Learn Burial Insurance Basics
Before purchasing a policy and determining the amount of coverage you want, you first have to understand what burial insurance actually is. The three most important things to understand about burial insurance are:
- Eligibility: Burial insurance is one of the easiest life insurance plans to qualify for. There are two types of plans—simplified and guaranteed issue. For simplified issue, all you have to do in order to be eligible is answer a short medical questionnaire. For guaranteed issue, you can skip this process altogether and still be eligible regardless of health. You are also eligible even up to age 85 and sometimes higher.
- Cost: Burial insurance costs a bit more than other types of life insurance, but you are paying for it for a shorter amount of time. Premiums increase the older you are at enrollment but do not change once you have a policy. Simplified issue is less expensive than guaranteed issue.
- Death benefit: Burial insurance death benefits range, on average, from $5,000 to $25,000. These funds are transferred from the insurance company to a chosen beneficiary when you pass away, and they will put it towards the final expenses you requested. You can use this payout for anything within its budget, and knowing what you plan to use it for will be one of the most important factors in determining the amount of burial insurance you need.
Step 2: Determine Your Eligibility
Burial insurance is easy to qualify for regardless of health. However, knowing which plan you are eligible for—simplified or guaranteed issue—will be a huge budget decision for the amount of burial insurance coverage you purchase.
Burial insurance as a whole is the best policy for older individuals or those with health concerns. If you have minor health concerns and can still pass medical underwriting, you should opt for simplified issue.
Guaranteed issue is nonetheless a great coverage plan, but it is more costly than simplified issue. This is because the insurance company will charge more based on the assumption that you are high-risk because of health reasons.
Determining the coverage you need, then, will vary depending on which plan you qualify for. Simplified issue patrons may want to purchase more coverage if they are paying less than a guaranteed issue patron. Guaranteed issue members may also be a bit more limited in the amount they are able to purchase. These are all important questions to ask prospective insurers when finding a policy that meets your coverage needs.
Step 3: Decide Your Budget
You will also want to know how much you are able to spend each month on your burial insurance policy. The more coverage you purchase, the higher your premium will be. Make sure that however much you purchase fits within your budget so that you do not miss payments and lose your policy altogether.
Keep in mind that your premiums will never increase with burial insurance, even if you run into serious health concerns or experience something that would influence your lifespan. So, the younger you are at signup, the more you may be able to purchase.
Seniors should not feel dismayed—even if you are significantly older at signup, keep in mind that you will likely be paying premiums for a shorter amount of time. This means that you can still get the coverage you need. Once again, just be sure that you have the budget for it.
Step 4: Consider the Funeral You Want
One of the main uses of burial insurance is to cover your funeral and burial. If you are considering purchasing a burial policy, you are more than likely already considering it to cover these costs.
Remember that funerals may be more expensive than you think. Prices change over the years, and now the average service is between $8,000 and $10,000 with a burial and between $6,000 and $7,000 with cremation. You may want to get an estimated cost from your preferred funeral home to set aside enough money in your burial policy’s death benefit.
Step 5: Find Out if You Want Other Expenses Covered
After you’ve determined which type of burial policy you are able to purchase, your monthly budget, and the amount you will have to set aside for your funeral, you may have some extra wiggle room in your death benefit.
When determining the amount of coverage you need, do not forget about some of the other expenses you and your beneficiary can use it for. For instance, especially if you have a guaranteed issue policy, you may have accrued medical debt during your lifetime.
If so, you can purposefully purchase more coverage to put the remaining funds towards it. Or, if you have a little extra after your funeral, you can apply it to that as well. You can also do the same for credit card debt, estate taxes, and really anything you feel is a necessary final expense. With these additional uses in mind, you can better determine the amount of coverage you may want to purchase.
Step 6: Find an Insurer and See How Much They’re Willing to Cover
Once your personal affairs are in order, you will want to find an insurer that will provide the policy you are looking for. Not all insurers are equal, and not all of them will be able to provide the exact type or amount of coverage you are looking for. Be sure to shop around and compare options in your area to find one that will provide the coverage you’ve decided upon.
Step 7: Call Senior Life Services
Now that you have a better idea of the burial insurance policy you’re looking for, where do you go from here? Finding the right insurer is extremely difficult and not something anyone should attempt alone.
That’s why Senior Life Services takes the time to understand your needs and find you a policy that meets your expectations. Call us today at 800-548-3249.