Burial Insurance
Burial insurance is a type of life insurance used to pay for funeral services and merchandise costs after a death. Burial insurance is a type of life insurance used to pay for funeral services and merchandise costs after a death. Burial insurance can be purchased for small amounts, such as $5,000 and $10,000, while other term or whole life insurance may require substantially larger minimum coverage. If the pressing issue is to make sure there are sufficient funds available to survivors to pay for a funeral and settle bills, a term or permanent life insurance policy can be purchased. Some of the costs covered by this insurance include funeral service, cemetery plot and headstone, casket, funeral procession and other miscellaneous costs.
What is Burial Insurance
Burial insurance is a type of life insurance used to pay for funeral services and merchandise costs after a death. The policy can be bought online or by telephone without waiting for an insurance-company doctor exam. In fact, burial insurance does not require a medical exam at all. Applicants are asked about age, smoking history and whether they have serious conditions. For some policies, acceptance is guaranteed. Others require a two-year premium-paying period before collection is possible and only provide coverage to 100 years of age.
Burial insurance is a cash policy, which means it builds a cash value over time. Burial insurance can be purchased for small amounts, such as $5,000 and $10,000, while other term or whole life insurance may require substantially larger minimum coverage. The premiums for burial insurance may therefore seem more affordable than bigger benefits policies. Premiums for this type of insurance do not change, and this policy provides permanent coverage. Some of the costs covered by this insurance include funeral service, cemetery plot and headstone, casket, funeral procession and other miscellaneous costs.
Life Insurance: Similar Cost, More Benefits
Consumer advocates have raised red flags about burial insurance. Some consider it a predatory type of insurance targeted to people who tend to be less educated, minority and low-income. That a medical exam is not required and acceptance is guaranteed means the pool of insured people is high risk. In order for the insurer to make a profit, the premiums have to be high relative to the benefit. Yet most people, even with severe health issues, qualify for policies many times better than burial insurance. If the pressing issue is to make sure there are sufficient funds available to survivors to pay for a funeral and settle bills, a term or permanent life insurance policy can be purchased. If the main concern is to ensure that the individual’s wishes for burial, cremation or memorial service will be funded and followed, and the demise is expected in the next few years, it may also pay to make pre-paid pre-need arrangements with a funeral provider.
Another strategy for making sure survivors have money to pay for final costs is to contribute regularly to a savings account for that purpose, set up either as a trust or simply as a joint account with a designated survivor. This money could be withdrawn immediately if needed after you die; survivors won’t have to wait for the insurance check or probate.
Related terms:
Adjustable Life Insurance
Adjustable life insurance is a term and whole life hybrid insurance plan that allows policyholders the option to adjust policy features. read more
Burial Insurance
Burial insurance is a basic type of life insurance that is used to pay for funeral services and merchandise costs. read more
Cash Value Life Insurance
Cash value life insurance is permanent life insurance with a cash value savings component. read more
Cash Surrender Value
Cash surrender value is the sum of money an insurance company pays to the policyholder or account owner upon the surrender of a policy/account. read more
Convertible Insurance
Convertible insurance allows a policyholder to change a term policy into a whole or universal policy without going through another health screening. read more
Dread Disease Rider
A dread disease rider is added to a life insurance policy to help cover the costs of a critical illness, such as cancer or a stroke. read more
Family Income Rider
A family income rider is a life insurance add-on that provides a beneficiary with money equal to the policyholder's monthly income if the insured dies. read more
Group Term Life Insurance
Group term life insurance is life insurance offered as an employee benefit. Often a base amount is covered at no charge, with the option to add more. read more
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is a small whole life insurance policy with no medical questions or exam. read more
Insurance Premium
An insurance premium is the amount of money an individual or business pays for an insurance policy. read more