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Funeral insurance, also called final expense or burial insurance, is one option for families and senior citizens who are concerned about the high cost of funerals, burials, and other final expenses. Besides having to pay for a funeral and burial, most families end up needing to take time away from work, travel, host guests, or deal with other issues that can create a financial burden. American funerals average over $8,000, and it is easy to see how expenses could add up to several thousand dollars.
Quality life insurance companies usually offer funeral insurance for people between the ages of about 50 years old and 80 to 89 years old. Since these companies are very competitive with each other, it is always a good idea to take advantage of multiple funeral insurance quotes in order to make sure that you are getting a good value.
How Does Funeral Insurance Work?
Before buying a policy for yourself or an elderly person in your family, it is important to understand how this kind of coverage works. When consumers understand what they are buying, they are more likely to make a good decision and find the right product at a price that makes it a good value.
These are some features of a typical funeral policy:
- Easy for seniors to apply for
- Affordable for many families
- Pays a cash benefit
These policies are a type of whole life insurance, but don’t let the term, life insurance, frighten you off. These plans have been specifically created to be easy for older folks to apply for and afford. The very fact that this product is life insurance is an advantage because it pays a cash benefit that can be used for a funeral and any other expenses at the beneficiaries discretion. This is different from a pre-need funeral plan that can only be used for very specific services at one funeral home or funeral company.
How Much Does Funeral Insurance Cost?
Of course, funeral insurance rates depend upon the type of funeral plan, the applicant’s age, and of course, the actual insurance company. Other factors that might impact the cost of funeral policies are the location of the insured person, and in some cases, health or lifestyle.
These are some sample funeral insurance quotes from a selected insurer for a 65-year-old woman in New York who does not smoke and is in relatively good health for her age:
- $5,000: $22.01
- $10,000: $41.41
- $20,000: $80.21
Note: These are sample monthly rates, so it is important to compare current quotes before buying.
What About Preexisting Health Conditions and Funeral Policies?
Again, these plans are made to be easy to apply for. Insurers understand that older people usually develop some health issues, and taking medication to manage a typical medical condition like high blood pressure or high cholesterol should not be a problem. There are even funeral policies that accept absolutely applicant, and these are called guaranteed acceptance funeral insurance.
These are the two basic types of funeral policies:
- Simplified issue: These ask a few health questions on the application.
- Guaranteed acceptance: These ask no health questions and accept all qualified applicants.
If possible, it’s better to answer the few health questions and try to secure a simplified issue policy. The premiums will be cheaper. Also, death benefits are payable as soon as the coverage gets issued. The questions are only intended to filter out applicants who face very serious illnesses.
With guaranteed acceptance, there will probably be a waiting period that the insured person has to survive before benefits are fully payable. In some cases, this waiting period might last for two to three years. Before that, most insurers will either refund premiums or pay some prorated portion of the full policy value. People who already have been diagnosed with a terminal disease or are already confined to a nursing home might be better candidates for guaranteed acceptance funeral insurance policies.
Compare Funeral Insurance Quotes for Peace of Mind
There are lots of families with concerns over the high cost of funerals, burials, and other final expenses. Because of this, the market in most areas is pretty competitive. It is very possible to save money by comparing funeral insurance quotes from top life insurance companies in your own local area.
Your family should be able to enjoy your time with your loved one while she is alive. A burial policy can give you and your loved ones peace of mind because you know that you will get a cash benefit to help defray any expenses that could be faced after the death of a loved one. If there is money left over after any obligations have been handled, the beneficiary of the policy is free to keep it. This makes funeral insurance a flexible and convenient way to plan for the cost of final expenses.