How Does Burial Insurance Work?

Your children are grown and your debts are little to none. You might even be retired and living comfortably with your spouse. You most likely don’t need a term life insurance policy anymore. Still, you want to make sure that your family is taken care of following your death. You don’t want to leave them straddled with the cost of your funeral in addition to dealing with the emotional shock they’ll be dealing with. One of the best ways you can help to protect your senior family members, even after you’re gone, is with burial insurance for seniors policy.

How Much Does a Funeral Cost?

Funerals are expensive. The average cost in the United States is between $7,000 and $10,000. Of course, the actual cost varies based on several factors, including if you want a traditional burial in a casket or if you would prefer to be cremated. Costs also vary based on the types of products and services chosen at the funeral home for your service. The bottom line is that funerals cost a lot, and this can be a huge financial burden on the ones you leave behind.

What is Burial Insurance?

Rather than leaving your loved ones with a huge funeral bill in addition to their grief, burial insurance can be a great thing to have. Burial insurance is a type of life insurance policy that’s designed specifically to cover the cost of your funeral and other related expenses, such as services as well as the actual burial itself. If you would prefer to be cremated, burial insurance can also cover this as well. This type of policy is geared toward older individuals who no longer have a need for traditional term life insurance. These policies typically cover between $5,000 and $25,000, although some providers will offer coverage for more. You can pay the whole amount upfront, or you can pay in monthly installments.

Getting a Burial Insurance Policy

Burial insurance policies are generally available only to individuals over a certain age. There isn’t a medical exam required, but you will need to answer a few basic health questions in order to qualify for coverage. There are certain factors that can lead to denial of coverage, such as cancer, addiction, or having to stay in the hospital for an extended period of time. Some websites specialize in giving burial insurance quotes which makes the process easier.

Death Payouts

Most burial insurance policies have a death benefit. This means that a specific amount is paid out to the beneficiary, even if the policy hasn’t yet been fully paid for. Some insurers allow you to borrow against this benefit. Keep in mind that if you haven’t fully paid back the amount you borrowed, the remaining balance will be subtracted from the amount paid to your beneficiary. Some insurers may also charge an interest rate on the amount borrowed.

Waiting Periods

Some burial insurance providers have waiting periods, meaning that the full amount of the death benefit won’t be paid out to the beneficiary if you die before your waiting period is over. The benefit goes up over time until your beneficiary is eligible for the full amount. Waiting periods may also be instated if you are hospitalized. Your death benefit may only be a quarter of the total value until the waiting period is over. Waiting periods follow a schedule set by the specific insurer.

Are There Any Restrictions?

There are some burial insurance policies that may come with restrictions. For instance, some policies have a clause that states they won’t payout if the insured commits suicide. Other policies may have a limited time contest clause. This means that if you die within the contested clause, the cause of your death can be investigated to determine if there was something that you didn’t disclose on your application. If you neglected to disclose the cause, such as cancer, your insurance policy and may not have to payout.

Burial insurance policies are an excellent option for those just looking to make sure that their family members have the necessary funds to cover the cost of a funeral following their death. Like other forms of life insurance, the cost of these policies varies from provider to provider, so be sure to shop around and compare rates to find the best policy to meet your needs.