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Burial Insurance vs. Prepaid Funeral Plan
By Matt Schmidt
At Burial Insurance Pro’s, we want to recommend you the best possible options that are tailored specifically to your lifestyle. We want to cater to your personal health needs and find exactly what fits your life circumstances. When it comes straight down to it, we’d like to help you pick what’s the best fit for you! Especially when it comes to the big questions such as a burial insurance plan or a prepaid funeral plan?
+ Burial Insurance – usually refers to a whole life insurance policy with a death benefit of from $5,000 to $25,000. Individuals buy this type of policy to provide money for funeral and burial costs for themselves and/or family members. At the time of death, the beneficiary receives a lump sum, tax free payment. They are then able to use the money to cover funeral costs, medical expenses, burial costs and other final expenses.
+ Prepaid Funeral Plan – are usually sold by funeral homes to allow you to arrange for the type of services and casket you want and pay now with a lump sum or through installments. The home either puts your money in a trust fund with the payout triggered by your death, or buys an insurance policy naming itself as the beneficiary.
The average cost of a funeral was roughly $8,508. Here we will give you a better estimate of some of the costs.
| Item | 2004 | 2014 |
|---|---|---|
| Non-declinable basic service fees | $1,460 | $2,000 |
| Removal/transfer of remains to funeral home | $195 | $310 |
| Embalming | $498 | $695 |
| Other preparation of the body | $174 | $250 |
| Use of facilities/staff for viewing | $339 | $420 |
| Use of facilities/staff for funeral ceremony | $395 | $495 |
| Hearse | $225 | $318 |
| Service car/van | $100 | $143 |
| Basic memorial printed package | $95 | $155 |
| Metal casket | $2,100 | $2,395 |
| Vault | $998 | $1,327 |
Please keep in mind these figures are just estimates of the bare minimum and do not include the cost of cemetery, flowers, obituaries or crematory fees. On top of the previously mentioned costs there are other bills that also need to be considered. Any outstanding bill that has been left by the individual who has passed still needs to be taken care of.
– Credit card debt
– Medical bills, Utility Bills, Cell Phone Bills, Cable Bills etc.
– Travel expenses for out of town relatives to attend the funeral
– Income loss
– Transportation of the body if you pass away from where you live.
These items, if not accounted for can add up quickly and can cause some serious issue if your family is not prepared to pay for them. Not having money set aside to cover these expenses usually leads people to look into a burial insurance policy, or to pre-pay their funerals.
As we stated above, prepaid funeral plans are sold to individuals by specific funeral homes. This type of plan will allow you the opportunity to pay for the funeral in advance without having all of the details finalized. This option allows you to take the stress off of your family members and have all of the details and planned and ready to go upon your passing. This is a huge benefit when it comes to prepaid coverage. You take all of the guesswork out of everything for your family members as well. Another huge benefit is that you are able to lock in today’s funeral rates and not have to worry about any type of inflation and pay for it in installments.
Here are some questions you would want to ask yourself, to make sure prepaid funeral plans are best for you.
One of the biggest drawbacks we see with prepaid funeral plans is the locked in commitment. Some policies may not allow the flexibility you need with transferable options. What happens if you move? Things happen and life changes. This is something you want to really be aware of when initially setting up the coverage. Not only that but it also doesn’t allow your family members to pay for final expenses, it only covers the funeral at that specific funeral parlor.
Another drawback that comes with prepaid funeral plans is they are not nearly as regulated as the insurance industry. More times than not, money that should be allocated for one thing is misspent or goes missing. Your family will also miss out on any cash benefit since the funeral home only pays for things for the funeral.
Prepaid funerals may be a good financial decision for your and your family. However, we feel that they fall short often times, in providing flexibility for your family. We feel that you can be better off, with a burial insurance policy.
Burial Insurance tends to have some extra perks as compared to prepaid funeral plans. This type of plan usually refers to a whole life insurance policy that helps you and your loved ones to prepare for burial expenses.
Here are some features of the burial insurance policy:
The biggest perk with burial insurance plans is that you are able to leave your family members extra money that they can do what they will with AND it’s tax-free! Whether they spend it on the funeral and final expenses or set money aside for lost wages, it is up to them. Also, since the insurance company is accepting you as a policyholder, your insurance may have an immediate death benefit.
Final expense insurance policies also ‘move’ with you, wherever you should live. Once you have a policy, it will cover your life no matter where you may ultimately move to.
Burial insurance policies provide two main types of death benefit products. Level Death Benefit plans and Guaranteed issue products. For people in average or above average health, you can qualify for an immediate death benefit product. Meaning once policy begins, the full death benefit payout to beneficiary at time of death. Doesn’t matter if death is of natural or accidental causes. Could be 1 day after policy starts, 5 years down the road, or 100 years down the road!
Normally, you will have several companies to choose from. Don’t feel overwhelmed! Simply speak with one of our agents, and they can help you determine what company is in your best interest!!! You can call us at 844-334-6143 and within 5 minutes, we can tell you what plans you’ll qualify for! Here are some sample rates:
Non Tobacco User Male $10,000 Immediate Whole Life Policy
| Company | ||||
|---|---|---|---|---|
| Sentinel Security | ||||
| Assurity | ||||
| Mutual of Omaha | ||||
| Americo | ||||
| Liberty Bankers Life | ||||
| Phoenix | ||||
| American-Amicable | ||||
| United Home Life | ||||
| Settlers | ||||
| Transamerica |
Non Tobacco User Female $10,000 Immediate Whole Life Policy
| Company | ||||
|---|---|---|---|---|
| Sentinel Security | ||||
| Assurity | ||||
| Mutual of Omaha | ||||
| Americo | ||||
| Liberty Bankers Life | ||||
| Phoenix | ||||
| American-Amicable | ||||
| United Home Life | ||||
| Settlers | ||||
| Transamerica |
Now if you are in below average health, and have significant pre-existing health conditions, then you may not qualify for the immediate death benefit plan. You would be eligible for the guaranteed acceptance life insurance policies. These policies are nearly identical to the immediate death benefit plans, except for ONE major detail.
These policies will NOT pay the full death benefit if you pass away from natural causes in the first TWO policy years. If you do, your family receives all premiums paid in, plus 10 % interest. After two years, then the full amount is paid to your beneficiaries. One popular insurance company that offers these plans is Gerber Life Burial Insurance Company.
Guaranteed issue policies are also more expensive, compared to immediate death benefit options. Here’s some sample quotes:
Male Monthly Rates
| Age | $5,000 | $10,000 | $15,000 | $20,000 | $25,000 |
|---|---|---|---|---|---|
| 50 | $19.66 | $38.41 | $57.15 | $75.90 | $94.65 |
| 55 | $23.55 | $46.11 | $68.70 | $91.31 | $113.90 |
| 60 | $28.78 | $56.65 | $84.52 | $112.38 | $140.25 |
| 65 | $34.60 | $68.29 | $101.98 | $135.67 | $169.36 |
| 70 | $44.41 | $87.91 | $131.41 | $174.90 | $218.40 |
| 75 | $62.79 | $124.67 | $186.54 | $248.42 | $310.29 |
| 80 | $110.92 | $220.92 | $330.92 | $440.92 | $550.92 |
Female Monthly Rates
| Age | $5,000 | $10,000 | $15,000 | $20,000 | $25,000 |
|---|---|---|---|---|---|
| 50 | $14.53 | $28.14 | $41.75 | $55.37 | $68.98 |
| 55 | $18.38 | $35.84 | $53.30 | $70.77 | $88.23 |
| 60 | $23.70 | $46.48 | $69.25 | $92.03 | $114.81 |
| 65 | $28.19 | $55.46 | $82.73 | $110.00 | $137.27 |
| 70 | $34.83 | $68.75 | $102.67 | $136.58 | $170.50 |
| 75 | $45.60 | $90.29 | $134.98 | $179.67 | $224.36 |
| 80 | $76.54 | $152.17 | $227.79 | $303.42 | $379.04 |
With a burial insurance policy, your family is also not restricted to a single funeral home. All the decisions are up to them on how your funeral should be held and where, which is nice if you don’t want to be locked into your burial plans for 20 years. With flexible payment plans, burial insurance has some of the best perks to be offered.
Keep in mind that your burial insurance will never be cheaper than it is today. The sooner you have it the sooner you’ll appreciate it. All the more reason to contact Burial Insurance Pro’s! Rates are determined by your age, at time of application as well as your overall health.
We have helped thousands of people find the coverage they need at a price that is affordable. We know your options and we help you sort through them – answering any questions you may have along the way. You are not in this alone.
Contact us today to get started! A quick phone call to 844-334-6143 is all it takes! Let one of our agents help you get the final expense insurance policy that you need!