Purchasing burial insurance means that your family won’t have to pay for your funeral and burial costs out of their own pocket. Depending on the type of policy you buy and the amount of the death benefit, it may cover costs that extend beyond your funeral. This will all depend on the type of policy you buy and the death benefit that’s selected.
Understanding burial insurance and its provisions are very important. If you’re in the process of selecting a burial insurance policy and have some questions, let us know. You can always reach out to us, and a member of our team will be there to assist.
The purpose of burial insurance and its coverage
Burial insurance is not intended to cover large costs. While it can pay for a funeral and burial, which can be thousands of dollars, it’s not intended to cover some of the larger costs that can be incurred. Burial insurance is not intended to pay off a mortgage or provide substantial financial security for family.
Burial insurance is long term. The policy will last until the death of the individual. Most people purchase burial insurance when they approach their senior years, as this is the time when it’s typical to start making arrangements. Keep in mind, burial insurance will only last if premiums are paid. While the policy is intended to reach until death, each policy may have its own specifications about any other events that would render the policy void.
Burial insurance or life insurance?
The biggest difference between burial insurance and life insurance is the size of the death benefit. Because burial insurance is only intended to cover some of the end-of-life expenses, it typically has a smaller death benefit than life insurance.
Life insurance will have a substantial death benefit that can be used to pay off bigger expenses. It’s possible to pay off a mortgage, college student loans, and other sizable costs with the payout. If you’re looking to provide for your family once you’ve passed, a life insurance policy will do that.
Can you buy burial insurance for someone else?
It’s entirely possible to buy burial insurance on behalf of someone else. In fact, many people purchase burial insurance for their parents. Funerals cost a lot of money. According to the National Funeral Directors Association, the national median cost of a funeral with a viewing and burial cost is $7,640 and $6,645 for cremation. Burial insurance can cover all of these expenses. The policyholder (i.e., your parents, in this case) will choose a beneficiary (most likely you) to receive the policy’s payout once they pass away. From that point, you can choose what to do with these funds, including, more often than not, funeral costs.
Buying burial insurance for your parents will financially protect you. It’s one of the best ways to ensure that you’re not financially responsible for their funeral and there will be sufficient funds when the time comes. If you’re wondering why else you should purchase burial insurance, read through our blog.