How to find the best Burial Insurance Plan
Finding the best burial insurance plan is easy, you only have two questions to ask:
1.) How much burial insurance do I need?
There are many ways to cut costs on funerals, by far the best is if you prefer to go out without the lavish production of flowers, drivers and catering services. A good burial insurance plan will preferably take care of all the costs of the occasion you have in mind without your family having to dip into savings in order to send you off properly.
In the U.S. a funeral will average about $8000 in most states. Keep in mind though there are additional expenses like flowers, cemetery costs, and other burial expenses that might arise.
2.) What Types of Burial Insurance Plans are available?
Among the many burial insurance plans, a whole life insurance policy is commonly used as burial insurance. In fact, it’s guaranteed to lasts your entire life (with NO price increases) and is the simplest form of life insurance.
Whole Life Burial Insurance Plans
Whole life policies are sold in small amounts (typically $40,000 or less) and many times sold as “simplified issue” or “guaranteed acceptance” burial plans. In other words, there’s no life insurance medical exam needed, and few or no health questions to qualify. It’s important to realize that the guaranteed issue plans don’t pay out the full amount if you die within the first few years after buying them (usually the first 2-3 years). Gerber Life has a great guaranteed acceptance plan available. A Simplified issue burial plan on the other hand will require health questions, but has day one coverage and will pay out immediately if a death occurs in the first few years. Mutual of Omaha has one of the more well-known Burial Insurance Plans of this kind.
Can Term Life be used as Burial Insurance?
Term life insurance is another form of insurance, but not good for use as a burial insurance plan. In fact, it lasts only as long as the term of the policy, such as 10, 15 or 20 years. For example it is likely that you will live longer than the term of the plan. As a result your family or beneficiary’s would receive nothing to help pay for funeral and burial costs. Term life is not the best burial insurance plan, however term life insurance is better suited for covering large time specific financial needs like:
- Home mortgage
- Children College education costs
- Lost income until retirement
What type of Burial Insurance is Best?
The first thing to remember about a burial insurance plan, is that your family doesn’t have to spend the money on your funeral. When your beneficiaries claim the life insurance and receive the money, no restrictions are placed on how they use it. With this in mind you should make sure your wishes are known in regards to your burial plan.
What is Pre-need life Insurance?
Pre-need life insurance, also known as Funeral Insurance, isn’t as well known to most consumers. However, funeral directors know it well: It’s a life insurance policy, linked directly to the costs of a prearranged funeral. Funeral insurance policies are usually intended to only cover the funeral expenses and most often pay benefits directly to funeral homes. One advantage of purchasing funeral insurance is many of these plans lock in today’s prices for your funeral costs. Today a funeral will average about $8000 in most of the U.S. Please keep in mind that there are many different types of funeral insurance policies available, and you will have the additional expenses of flowers, cemetery costs, and other burial expenses that might arise.
With a Pre-need arrangement, you usually select the funeral home, choose the particulars of the funeral, and then purchase the policy. In some cases the costs will remain the same no matter when you die. Therefore the policy will be sure to cover the burial you have chosen. The payout from a pre-need burial insurance plan will go directly to the funeral home and never pass through your family’s hands.
Is Pre-need Burial Insurance Best?
Pre-need burial insurance is great for people that want to make sure their final wishes are carried out, their family won’t be troubled with funeral decisions, and that all the money goes toward the event. However there are issues with these types of burial insurance plans, these could include:
If your death come from due an illness or accident that required medical care, those expenses can add up very quickly, placing a burden on your loved ones’ pocketbooks. Your family could find some substantial out-of-pocket costs that get passed along.
Credit card debt
Unfortunately, if your spouse or anyone was an authorized user of a credit card, or co-signed a loan with you they will end up owing your outstanding debts.
Is Whole life best for Burial Insurance?
In conclusion, while Whole life insurance used as burial insurance can be a bit expensive, guaranteed acceptance or guaranteed issue policies are even more so. In our opinion a whole life is the best burial insurance plan. It offers you and your loved ones the peace of mind, knowing that the family will have money to pay for a funeral. It’s certainly hard enough to loose someone you love, no one wants the stress of a financial burden to go along with it.