Burial Insurance for Seniors Buying Guide
This is your ultimate guide to burial insurance (also called final expense insurance or funeral insurance).
Burial insurance plays a unique role in your financial planning. Many people buy these policies to help their loved ones cover end of life expenses for themselves.
Two Reasons for Having End of Life Insurance
- Sometimes, people buy end of life insurance because they do not have cash on hand to cover funeral expenses, and they do not want their passing to put a burden on their family.
- Other times, they might have cash on hand, but still want to provide their family with accessible funds, that is not in stock form, to pay for their funeral/burial. They do this in order to preserve their cash/investments to pass on to their family.
An Example of How to Use a Burial / Final Expense Policy
A couple years ago, my family lost my father in law. He was survived by his wife of 49 years. However, he had decided a few years back to purchase a final expense policy to cover his funeral and burial expenses in the event of him passing. Although he had plenty of investments that could have covered his expenses, he knew it would be easier for everyone just to have access to quick cash if needed.
My father in law was right. With his policy, we were able to “assign” funds from the policy directly to the funeral home and to the place we purchased the casket. That was much easier than freeing up invested retirement funds. Moreover, his widow didn’t have to worry about end of life expenses eating into her cash savings.
Do I Need Burial Insurance / Funeral Insurance?
From my story above, we can see that:
- In this instance, the final expense insurance policy wasn’t completely necessary. However, it was convenient, made everyone feel secure, and was generous.
- However, in other instances, burial insurance could be completely necessary for funeral/burial expenses. For example, if the person it is bought for lives on a fixed income, check-to-check, with no significant savings, then this policy could be a life saver for the survivors.
Can I just save for end of life expenses?
Yes, saving up for funeral expenses is one option, but sometimes this saving just doesn’t happen. In addition, death is often accidental or unexpected, and you might not have enough time to save up what you need.
Funerals and burials can lead to debt if your loved ones are not prepared to cover these costs. As a result, you will need a solid plan to cover these costs, and funeral / burial insurance is often your most secure option.
Let’s look a little deeper into what is final expense insurance and where / how to find a policy.
The Definition of Burial Insurance / Final Expense
Final expense insurance, which is also called burial insurance or funeral insurance, is a type of whole life insurance that helps you pay for end of life expenses.
- USED FOR: For example, a final expense life insurance policy could help you pay for a funeral, burial, casket or end of life hospital fees.
- AMOUNTS: These policies are often for smaller amounts (smaller face values) as they have larger premium payments and often shorter timeframes to own them. Typically, policies are for $5,000 to $25,000.
Final Expense / Burial Insurance Cost
So, what does final expense insurance cost? First, these polices are whole life policies, which means that it is a “permanent policy” you will fund and keep until you pass.
Second, burial insurance policies usually have “face values” (payouts) between $5,000 and $25,000. Since they are whole life, they will gain a cash value as you pay your premiums, and they will pay your beneficiaries their face value in cash when you die.
Your rates (premiums) will depend on:
- What company you choose.
- Your age and other underwriting criteria.
- How big of a face value (payout) you choose.
Applying for and Getting Final Expense Insurance Quotes
Insurance companies made burial insurance accessible to many types of people. Moreover, people that would be turned down by other forms of life insurance (or turned off by expensive premiums), can often find funeral policies that fit their needs.
Some funeral / burial insurance policies offer:
- Guaranteed coverage for certain age groups
- Ability to skip medical exams
- Affordable premiums that don’t increase
- Cash value in the policy to access in an emergency
- No wait periods to start a policy
So, how can you get burial insurance quotes?
I suggest talking to an independent insurance agent to compare quotes for any type of life insurance policy. They will be able to discuss your unique needs and match you with the best product for you.
More about Independent Agents
- In addition, this article on what makes a good insurance agent, will help you to make sure your agent is a good fit for you.
Best Final Expense / Burial Insurance Companies
What is the best burial insurance company (aka final expense insurance carrier)? Depending on where you live, you will have multiple different options for insurance companies to choose from.
Some of the biggest players in funeral insurance are:
- Mutual of Omaha
- Royal Neighbors of America
We will have reviews of each company coming soon.
Is final expense life insurance worth it?
Yes, funeral insurance / burial insurance is worth buying for those you love in the event of your death. It provides:
- Quickly accessible funds to pay for end of life expenses
- A potential way to build a small emergency fund in cash value
- Peace of mind, that your loved ones will not be stressed about your end of life expenses in the event of your death.
Finally, if you need to talk to someone about a policy, please contact us here and we will find an agent to help you.