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Generally, death is one of the topics people avoid talking and thinking about, but everyone inevitably dies and it is natural that many people reaching mature age start preparing for the inevitable. They want to be sure that they will be given their last honors in the way they want it to happen. Burial Insurance (Final Expense Insurance) is created to help families cover expenses resulting from the death of their family member. These expenses can be very large, the funeral costs being not the only bills.
Burial Insurance is getting increasingly popular. A lot of people do some pre-planning and prefer to pre-pay for their funeral expenses. According to the American Association of Retired Persons (AARP), funerals tend to be nearly the most expensive purchases older Americans make nowadays. In addition to high burial costs there can be additional medical charges or nursing bills not covered by Health Insurance, other bills associated with funeral expenses or even outstanding credit cards debts.
Burial Insurance allows you to have a plan to pay for your funeral wishes and protect your relatives from bearing all the large expenses of your funeral arrangements. This type of insurance is a good way to ensure you won’t burden your family with difficult decision making and paying high costs of a funeral. Many people choose to pre-plan and pre-fund their final arrangements due to potential increase in funeral expenses and less reliance in trusts.
Burial Insurance is basically a Whole Life Insurance product, with a simple application and underwriting process. You can find Burial Insurance policies which will cover only you, or choose policies covering your entire family. The types of services and products tend to vary from state to state and from policy to policy. Burial Insurance can be obtained by anyone up to the age of 100. Usually, no medical exam is required to be able to obtain coverage. You can be asked several medical questions or no medical questions at all.
This type of insurance may be purchased from the funeral director or through an insurance broker. Final Expense policies can cover you for a specific time period or for the rest of your life.
Before you purchase a policy, you can go to your local funeral home and get the estimate of the funeral costs. This may include the cost of embalming of the body, burial vault, the casket or urn, grave marker, head stone, hearse, flowers, obituary notices, digging and filling the grave and the cemetery plot. This estimate is roughly what your potential policy should cover. It is important to realize that funeral prices, just like everything else, tend to rise with time and inflation. Therefore, you are recommended to purchase a policy with regard to inflation.
Burial Insurance policy should specify what type of outer burial container you have purchased and, and what it is made of, what kind of marker you have purchased, its size, material, and style.
Burial Insurance policy costs depend on the insurance carrier, the general health of an applicant, and his/her age. Naturally, costs are at their lowest if you buy a policy when you are still young and healthy. In case you are a 65 year old man who smokes, the costs will be much higher. Generally, most people can afford these types of policies, as the premiums are rather low.
The advantage of Burial Insurance premiums lies in the fact that they are fixed for life, and remain unchanged even if the state of your health worsens. You can select a funeral home, casket or cremation, headstone and burial plot, and all services, including every little detail, and lock in the prices of these services by paying in advance. Mind that sometimes funeral directors may offer guaranteed prices for some items but not for others, like grave services and flowers. In case the funeral home of your choice does not give a price guarantee, mind that your funeral costs will be higher than the amount that you pre-pay for.
You can name any trusted family member as a beneficiary and they will be responsible to make the claim and use the money to carry out your wishes upon your death.
It is possible to choose a face value which you don’t want your funeral expenses to exceed. If the face value exceeds the actual cost of funeral expenses at the time when you pass away, any additional funds should go to a contingent beneficiary.
Some Burial Insurance policies can also offer the ability to accumulate a cash value. You pay no current income taxes on the cash value growth. Burial Insurance typically offers coverage between $5,000 and $50,000. If there are funds left in excess of funeral costs, they can be returned to the family of the deceased.
Seek the advice of your certified financial planner or attorney and consult with your insurance broker to determine which type of Burial Insurance policy will fit your budget and personal preferences. Be informed and learn the rules and regulations of your state concerning Burial, Final Expense, and Preneed Insurance.
Ask if the funeral arrangements that you make can be moved to any other funeral home at any time. Find out everything about the cemetery of your choice: what happens if the cemetery runs out of money and defaults on your arrangement, what happens if the owners change, or if your chosen cemetery runs out of burial space etc.
Final Expense Insurance policies are individualized, and it is up to you, what services and products you include in them. The only exception is when the amount of funeral expenses is specified. Your policy can also be capped at a specific dollar amount, $25,000 being the highest amount.
Your Life Insurance policy can be used to pay for your funeral if you instruct your beneficiary to use the death benefit amount for your funeral. However, Standard Term and Whole Life policies are not offered in low face amounts like $5,000. Therefore, it may make more sense to purchase Burial Insurance policy. Check if your current Life Insurance company will supplement your policy with Burial Insurance at an additional cost.
In case you have dependents and need to pay for their college, or need to pay mortgage or have other financial obligations, you are recommended to purchase a standard Term Life or Whole Life Insurance policy in an amount that can cover family needs, including final expenses. Burial Insurance can be regarded a way to control the final event of your life, even when you can no longer control anything.