What’s Best for Burial Insurance?

Oct 03

Take a moment to consider the impact that your death will have on your loved ones. Initially, they will have to deal with all the emotions that will come along with losing you – the grief, the pain of the loss, and everything in between. However, they must pull together and keep moving forward in life because, well, life goes on.

Do you want your family worrying about finding the funds for your funeral/cremation/burial?

Do you want your loved ones to have time to grieve their loss instead of worrying about meeting financial obligations?

Do you want your family to worry about coming up with funds to handle your taxes and other financial obligations? Or be forced to sell your property and other belongings to pay?

These are a few of the most important questions you will need to answer when deciding on whether to purchase a burial insurance policy.

As you know burial insurance is a great way to address these types of issues. At the time of death, we are sure you’d like for your family to be able to take care of all the final expenses, that come at the end of one’s life. A basic funeral may run $10,000 or more. That’s just the beginning of the expenses.

Nobody likes to think about it, let alone talk about it — but having adequate burial insurance coverage makes life a bit easier on those you leave behind. It gives your family an opportunity to mourn their loss and pick up the pieces of life without having to worry about financial struggles. You will bring comfort after you are gone by having your own obligations met as well as theirs – all because you made the smart decision to secure a life insurance policy.

The Biggest Question

You know that you need burial or funeral insurance – and you are determined to get a policy in place. So, are you ready for the biggest question?

Here it is: What type of life insurance do you buy?

There are so many types of insurances to choose from that it can be confusing and downright frustrating. For example, do you want term life insurance? Or maybe you’d prefer whole life insurance? These are two of the most popular types of life insurance – though there are many other types to consider.

term life vs whole life insurance

To make your life a tad bit easier, we have put together some information on each of these two types of life insurance so that you may choose the best fit for your situation. Seeking the help and guidance of an independent agent can also help you make the most informed decision.

What is Term Life Insurance?

Term life insurance is called such because these policies only last for a set term. For instance, you may have a term life insurance policy that lasts for a term of 10 years, 20 years, or 30 years. You pay your set premium and, in the event that you die, your beneficiary will get the entire payout from your insurance policy.

It is simple and straightforward. It is also the most affordable…..In the short run that is.

The downfall is that once the term is up – your level premiums will expire. And you’ll be placed on an annually increasing policy. These rates will be much, much higher than the original premiums. Chances are you may not be able to afford a policy with these new terms.

Now you may find yourself older and without life insurance. And, the older you are and the more health concerns you may have, the more difficult it may be to find an affordable life insurance policy. However, you may find that at the time of its expiration, you may be more financially stable, have a healthy retirement fund, no longer have young and dependent children, have fewer financial obligations, and no real need for life insurance.

Term life insurance policies have no cash value and, therefore, are an all or nothing type of policy. In other words, if you die while in year two of your 30-year term, your beneficiary will get the same benefit as if you had died will in the 29th year of your term. And, of course, if you happen to die when your term is up – your beneficiary gets nothing.

Generally, if a person is truly worried about covering the cost of a funeral, and all of their final expenses we wouldn’t recommend a term policy. WHY? Because we don’t know when we are going to die. It’s hard to recommend a type of policy that may not be there for your family when they need it the most. We like to recommend policies that are going to provide the financial protection you are seeking, no matter when you die.

Whole Life Insurance..what is it?

There are several types of permanent life insurance coverage, such as variable, universal, variable universal, and whole life insurance. These are considered permanent because they are not just for a set term (like discussed with term life insurance above), but for your entire life – or as long as you choose to continue to pay your premium. There will be no need to seek additional coverage as you age. And, for many people, this is a comforting safety net.

Whole life insurance is a bit complicated to understand so we will try to break it down as much as possible. When you make your policy’s premium payment to your insurance company, the money you send will be split between two things: your death benefit and its cash value. The cash value of the policy continues to grow over time. The more payments you make, the more it will grow. You are even able to borrow money against the policy or surrender your life insurance policy for a cash amount. It is important to keep in mind, however, that if you do borrow against your policy, you will have to pay it back or your death benefit could be lowered. And, if you surrender your policy for the cash, you are no longer covered by life insurance.

Whole life insurance policies tend to also have better underwriting guidelines. Meaning an insurance company may consider you for life insurance if you have Diabetes, or other chronic illnesses. Term insurance companies tend to rate people higher with conditions like this. However certain whole life carriers will not apply any extra rates to your premiums.

The biggest downfall of whole life insurance is the premium. They tend to be much, much higher than, say, term insurance.. It’s a significant difference and the main reason why many people are deterred from permanent insurance. However, if you remember why you are looking into a burial insurance policy, this will help you keep things in perspective. You are taking out this type of policy to ensure your loved ones, don’t have to dip into their own savings to cover your final expenses.

Here are some examples showing guarantees of a burial insurance plan, that term insurance cannot provide.

Whole Life policy that will stay the same price and death benefit for life
Cash value that can be borrowed from, or can be made into a reduced paid-up policy if no longer want to pay premiums
Does not require an exam or medical records for approval. Since most policies are smaller amounts of coverage, you won’t have to undergo testing like this.

Which Life Insurance is Best for Me?

Oddly, many people at first think term life insurance is a better choice. However, you must take into consideration where you will be when the term life insurance policy ends.

You may want to consider the following:

Will your finances be increasing over the length of the term?
Will you be able to afford a more expensive policy by the end of the term?

When your policy expires, you will be older and your situation may change – financially and medically – for better or for worse. You must be prepared to seek another policy at a potentially higher premium.

On the other hand, whole life insurance will keep you covered for your whole life or as long as you continue to make your plan premiums. You will not find yourself trying to obtain a new insurance policy as an older individual. And you can rest assured that you are always covered.

Whole life insurance, however, may be more difficult to understand and come at a much higher price than its term counterpart. You are, in essence, paying for the permanent coverage – and also gaining the cash value.

risk vs reward of life insurance types

Choosing your best choice for burial insurance will depend greatly on just how much you are willing to spend and the risk you are willing to take. If you want the comfort of knowing you are permanently covered, than whole life may be your best bet. But, if you cannot afford the whole life premiums, then perhaps a smaller amount of coverage may get you by until you are better set financially.

Often times, many companies will allow you to do a conversion on your term life policy. Let’s say, for example, that right now you cannot afford a whole life insurance policy. Ideally, however, that is the type of insurance you would like. Instead of foregoing life insurance altogether, you can take out a term life insurance policy and, before it expires, convert it over to a whole life policy. Not only does this give you time to get your finances in order and come up with the extra money for monthly premiums, but it also means you wouldn’t likely have to go through the whole underwriting process a second time.

It is always best to speak to an independent agent to discuss your specific options in more detail.

An Overview: Term Life Insurance vs. Whole Life Insurance

To break it down even further, we’ve put together a comparison chart. Again, your choice will be based on what you can afford and what you are looking for in a life insurance policy.

Term Life Insurance	Whole Life Insurance
Very basic and generally easy to understand. No hidden fees or policies.	A bit more complex than other policies and difficult to understand.
There is no cash value for these policies. Should you decide to cancel, you may be able to do so without penalty, but you will get nothing back for the money you have paid into the policy.	Your policy will build cash value over the years. You are able to borrow against your policy and, should you cancel, you will likely receive some cash payout, depending on how long you’ve had your policy.
Your policy will expire after the set term. You cannot extend it but would have to purchase a new policy.	There is no end to the policy. As long as you continue to pay your premiums, you will have coverage.
You may have to pay higher premiums for coverage. When your term is up, you will be older, and your new premium will be higher.	Your premium remains level.
Your death benefit is only paid out if you die during the term of your policy.	Your death benefit is paid regardless of when you die, as long as your policy is still active.

The Winner Is…

Whole Life Insurance. However, the ultimate decision is determined by each individual person. Not every scenario is the same – so one policy may be great for one person, but not for another. That means you will have to take some time to consider your situation and your needs to determine whether you would benefit more from whole life insurance or term life insurance.

Choosing which type of life insurance is a personal choice – and an important one. However, it can be a confusing and daunting task. You never just want to leave the well-being of your loved ones to chance when you die. Seeking the help of an independent agent can be a great asset on your search for coverage.

An agent knows the insurance world inside and out. They also have a large network of companies that they work with, allowing you to obtain the best policy at the most affordable premium. And, any questions you have about any of these policies can be quickly – and professionally – answered, leaving you with no ill surprises down the road.

Burial insurance rates are probably more affordable than you think. To find out how much coverage will cost takes less than 5 minutes. We understand that thinking about funeral costs, and final expenses is not an enjoyable thing. However, it is extremely important.

Also, there are policies for everyone. From ages 0-85, there would be options. Companies such as Foresters Financial, Mutual of Omaha, Gerber Life, and others can provide you products to protect your family. what's best for burial insurance There are pros and cons to both term life insurance and whole life insurance. Speak to an agent today to help you decide which will be the best fit for you. Here at Burial Insurance Pro’s, we love working with families and providing the needed protection given their situation. Make that important call today at 844 334 6143 , or contact us to begin the process for obtaining a no obligation quote!