Burial insurance is a type of life insurance. Regularly called final expense insurance, it is a smaller policy meant to cover the costs associated with end-of-life. These costs include the cost of the funeral, medical bills, mortgages, etc. Final expense insurance is a good deal for people who cannot afford or qualify for traditional life insurance. To understand whether it is a good deal for you, read more below.
Who Should Get Final Expense Insurance
Burial insurance is like traditional life insurance that offers less coverage. The maximum amount of coverage is $50,000. This means that many people can afford the lower monthly payments associated with burial insurance. People who cannot afford the higher monthly payments of traditional life insurance with larger face amounts should instead purchase burial insurance.
Additionally, some people do not qualify for traditional life insurance due to age or chronic medical conditions. Typically, final expense insurance is more lenient about medical conditions. Many companies accept serious medical conditions like previous heart attacks or strokes. There are even certain policies called guaranteed acceptance plans. While these plans are slightly more expensive and require a waiting period, they accept all applicants. They are sometimes the only way that someone with a serious medical condition can get coverage.
What Burial Insurance Covers
Final expense insurance is designed to cover costs associated with end-of-life, but it can be used for anything the beneficiaries want. Generally, there are no restrictions on what the death benefit may be used for. Many people choose to use them for funerals, remaining medical bills, property taxes, or outstanding mortgages. However, nothing is stopping them from using the funds for personal things, like a vacation. The flexibility of the policy is one of the major benefits for beneficiaries.
The Cost of Final Expense/Burial Insurance
The actual cost of final expense insurance depends on many factors. These include the state in which you reside, your gender, age, overall health, and health insurance status. Depending on your age, death benefits, and health insurance status, expect to pay between $50-400 per month. Many different companies can provide quotes, so be sure to compare quotes before buying a policy.
Do I Need Burial Insurance if I Have Life Insurance?
You do not need burial insurance if you already have life insurance. As stated above, burial insurance is a type of life insurance with a lower face amount. However, there are certain things you should know about your life insurance policy. Specifically, there is a difference between a permanent policy and a term policy. A permanent policy is a type of life insurance policy that covers you for your entire life. A term policy only covers you for a specific time period. If you live past that time period, you are no longer covered. You should elect a permanent policy if you can afford it.
Burial insurance is a great option for someone who cannot afford to pay the higher premiums associated with traditional life insurance policies or who cannot qualify for life insurance. The actual cost of final expense insurance can vary widely depending on different variables. Planning early and choosing a plan that fits your goals is the key to success.