You and your wife are enjoying the fruits of your retirement. Most of your day is spent tending to your gardens. Occasionally a grandchild calls. All your children have their own lives now with meaningful jobs. It has been 5 years since all college loans have been paid off. You considered taking life insurance but the premium prices are too high at this point even if none between you and your wife has been hospitalized or have had any serious illness all your lives. However, as you two grow older, you reflect on the inevitable. Sooner or later there will come a point when you will have to deal with your passing. You want to make sure your family is taken care of. You wanted to help further make your children independent by making them not worry about how to manage your funeral. You don’t want to leave them straddled with the emotional shock they will have to deal with when that time comes. You and your wife decide to call the insurance guy. Just eight questions were asked, nothing more, nothing intrusive.
You are a busy single mother juggling two jobs. Your two kids are now at home and are done with their dinner before you come home. Your day just can’t end after 14 hours of tending to two jobs. You review your monthly budget at your dinner table. Good, all the hard work has been paying off. Some cash can be set aside for other purposes. There is enough saved over time that both your children can make it through college somehow. They are good and smart kids and they will reciprocate what their mother has had to put through just to make ends meet. You find it difficult to sleep. After 25 years of working the thought of dying is slowly creeping into your thoughts. “Who will take care of my children?”, you asked yourself. You tried counting sheep to sleep. But instead of sheep are questions. Then it came to a point that you ask yourself, “who will take care of my burial arrangements?”. Then came the thought of getting life insurance. After taking into account the budget to set aside for your kids’ college fund you have just $200 a month, at most, that can be set aside for insurance. In lean days the excess money that can be set aside for life insurance may not be enough. But burial insurance has a lower premium cost and is easier to qualify to. “I’ll take it. I’ll call the insurance guy tomorrow.” Just the thought of it helped you sleep better. Once you took the insurance guy’s offer you get the peace of mind you never thought you are going to have.
These are just two examples of who can qualify for a burial insurance policy. They could be anyone, including you. Death is an unpredictable matter. Although statistically, the younger you are the less there is of a possibility of dying, it is an issue that can strike anytime and there is no one in the world who can predict this. The best you can do is to protect your family from it. And one of the best benefits you can get from this is not just the cash available for your burial, it is the peace of mind knowing that your family is protected from the misery that comes with your unexpected death.
Funerals are expensive. The average cost of a funeral is $10,000. The actual cost can vary based on several factors. This could depend on the quality of the casket, how long the funeral home will be used or what services were added on, and the land where the burial will take place, among others. It will cost less if you take cremation as an option. However, some religious beliefs do not consider cremation as an option. In the end, the cost alone can be huge and will leave a considerable financial burden on those you leave behind.
But these are just “cold numbers”. Many emotions are involved during funerals that families wind up paying much more than they should. Prudent decisions are difficult when the family is suddenly swamped by problems associated with an unexpected death. Without proper planning, the cost of burial can result in at least double this amount. Moreover, other costs have to be settled such as medical debts, legal expenses, and publishing the event on an obituary, among others.
How Does It Work?
Burial insurance can be a great thing to have rather than leaving your loved ones with the burden we just mentioned. The grief and the cost connected to an unexpected death left an incalculable degree of misery. Burial insurance is a type of insurance policy that is designed to specifically cover the cost of your funeral. This could include other related expenses such as services and the actual burial. The usual market for burial insurance is seniors who either do not qualify for traditional term life insurance or do not find the need to get these. A burial insurance policy typically covers from $5,000 to $25,000, but some providers can accommodate a higher policy size. Terms of payment can be done wholly upfront or in monthly installments.
You could set up everything you want for your final expenses, for example, the service you want for the burial, the casket that you prefer to use (or if you prefer to be cremated), the place you wanted to be buried, and even your headstone. In some cases, you may talk with your insurance provider to fix the payout such that there will be some extra cash for possible overruns that may arise during your funeral. Once you set this up you can agree as to what the cost will be and then simply take out a burial insurance policy for that exact cost.
Burial insurance is traditionally geared towards seniors. But some insurance companies are flexible and can cover anyone at any age. Qualification to avail is easier compared to other policies. Insurance companies usually ask several questions regarding health, hospitalization, and addiction. There are two types of burial insurance policies that we will discuss in this article later. This will depend on what illness the policyholder may be carrying. It is important, to be honest during the application as some clauses in the contract may force the insurance company from making payouts. Some companies make it easier for applicants who want to avail themselves by providing insurance quotes on their websites.
Claiming burial benefits is comparatively easier compared to other insurance policies. The process times are understandably faster due to the urgency of the situation especially in the event of the unexpected death of the policyholder. Most burial insurance policies allow for a death benefit. This means that a specific amount is paid out to the beneficiary even if the policy has not been fully paid for yet. Some policies can allow you to borrow against this benefit. However, in the event of a need for a payout (meaning unexpected death), the remaining balance will be subtracted from the amount paid to your beneficiary. Insurers usually may charge interest from the amount borrowed.
Waiting Periods and Restrictions:
There are two types of burial insurance policies. The first is called a no waiting period. The second is called a partial waiting period or modified type. An applicant may also be uninsurable due to certain medical conditions.
Many insurers place no waiting periods when claiming. However, the insured will need to qualify first. Certain medical conditions will prohibit you from getting the no waiting time coverage. If you currently have heart disease (including heart attack, heart surgery, or congestive heart failure), disease of the circulatory system (including stroke, aneurysm, or been advised to have surgery to improve circulation), cancer (other than basal cell skin cancer), lung disease (including COPD or emphysema other than asthma), liver or kidney disease, had an organ transplant, Alzheimer’s disease, dementia, organic brain syndrome, ALS (Lou Gehrig’s disease), alcohol or drug abuse, complications of diabetes (including amputation, diabetic coma, blindness, or kidney disorder), or advised to take diagnostic tests for the above, then you may qualify to a modified policy (with a 1 to 2-year waiting period). You can qualify for no waiting period by working with a third-party agent, or your insurance agent, to review the items mentioned. This will give you a better idea of what you can qualify for based on your health.
There are some health conditions that you currently have that will make you uninsurable. Any form of insurance may not be possible if the applicant has AIDS, has been diagnosed by a physician to have a life expectancy of 12 months, and is currently bedridden, hospitalized, in a care facility, or receiving hospice care.
Some burial insurance policies come with restrictions. Some clauses in the policy may state that payout cannot be done if the insured commits suicide. Some policies may have a limited time contest clause. This means the insurance company will have to investigate the cause of death to determine if there were conditions that were not stated or disclosed when your burial insurance policy was being applied for. Such oversight or neglect may prompt the insurance company not to do a payout.
Among all insurance policies, burial insurance brings the most value at the point of time when it is needed. It is an excellent option for those just looking to make sure that their family members have the necessary funds to cover the cost of a funeral following their death. What brings the insured peace of mind is not having to think about this. Like other forms of life insurance, the cost of these policies will vary from provider to provider, but the Insurance Guy will surely help you find the best policy for your peace of mind. The advantages of taking burial insurance are overwhelming compared to the cost for the insured. Talking to the Insurance Guy will be easy. The mission of the Insurance Guy is to make sure your family is protected from the compounding issues surrounding your unexpected death. The terms for the policy are reasonable. Just consider how much less it costs to keep up with premium payments to have the peace of mind that your death is well taken care of even if it was to come unexpectedly.