Burial Insurance (Funeral Insurance)
If you've never planned a loved one's funeral, you may not be aware of the expenses involved. In a standard funeral, there are numerous expenses such as purchasing a casket and paying for obituaries, flowers and grave markers. The cost can be overwhelming if the person who has died did not have life insurance. That's why many companies offer burial insurance, so funeral expenses will be covered at the time of need. Here's a brief overview of why you might want to purchase burial insurance and what it will cover.
Do I Really Need Burial Insurance?
As we stated earlier, funeral costs can be considerable, even for a simple ceremony. Here are some of the things that must be paid for as part of a traditional funeral:
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Limousines and hearse
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Floral tributes
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Newspaper obituary fee and Funeral Programs
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Embalming and preparation for viewing
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Opening and closing of gravesite
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Funeral home/church expense for viewings and service
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Grave marker or headstone
Even if you choose to have a simple graveside service or opt for cremation, some of those expenses still apply. In the United States, you can expect to pay from $3000 to $10,000 for standard funeral expenses, depending on how elaborate the service and burial are. Most people do not have the financial reserves to pay out-of-pocket for these expenses, making some type of insurance almost mandatory.
Why Not Simply Buy Life Insurance?
Once you've recognized the need to purchase some type of insurance to cover inevitable funeral costs, you may think it easier to simply purchase a life insurance policy. That does make sense in some instances, but there are some factors that will prevent you from buying life insurance to pay for funeral costs, namely age, illness and high premiums.
Very few life insurance companies carry "guaranteed issue" policies, meaning that a current or previous illness can result in your application being denied. Burial insurance, on the other hand, is often guaranteed to be issued, although you may have to have a physical exam that determines the price of premiums. If you or a loved one is unable to obtain life insurance to cover your funeral expenses, it may be time to look at burial insurance, instead.
What Does Burial Insurance Cover?
The quick answer to that question is: It depends on which type of coverage you purchase. "Final Expense Insurance" was created to give those left behind enough money to cover outstanding debt and incidental expenses, as well as burial costs. Traditional burial insurance is normally sufficient to cover the costs of a funeral service.
Look at your unique situation when deciding what kind of insurance coverage you need. If you're declined by a life insurance company, you may need to investigate burial coverage. If you're concerned that your survivors will be burdened by your unpaid debts, final expense insurance might be a better option.
No matter what decision you make, let it be driven by actual anticipated need and not a sales pitch. A reputable insurance agent will explain all of the options available to you and let you make your own decision. Once you do, you'll have the peace of mind that the final service honoring your life won't have the added anxiety of debt for those you leave behind.
