No one wants to think about dying let alone planning for the day it happens. At some point, the time will come when you have to say goodbye to your loved ones. One of the more essential things you can do to help ensure you leave your loved ones well protected is to purchase the right type of life insurance. On top of this, insurance companies like Colonial Penn, Gerber Life, and Mutual of Omaha offer burial life insurance policies designed to help offset the cost of your funeral.
Do You Need Burial Insurance?
The best way to answer this is to start by looking at the cost of an average funeral here in the United States. According to the Funeral Consumers Alliance, the average final cost of your funeral could be around $11,000. To make matters worse, this doesn’t include food for the guests, flowers, an obituary, and many other incidental costs. Of course, if you happen to have an extra $11,000 in your savings account, you may not need a burial rider on your life insurance policy, but should you not have this kind of money laying around, it could force those who are left behind to find a way to pay for it. In many cases, they will end up going into debt to cover your funeral expenses.
How Does Burial Life Insurance Work?
In technical terms, burial insurance is considered to be a form of whole life insurance. Providing you continue to make the payments on your policy, the provider you choose cannot cancel your policy. Much like any other form of life insurance, you have to name a beneficiary. This can be an individual, a trust fund, or a group of people who will collect the benefits after your death. Although there are specific burial life insurance policies, you can use virtually any type of life insurance to cover the total cost of your funeral. This list includes universal, term, or whole life, but if you are shopping for a death payout of under $25,000, have health issues, and are between 50 and 85 years of age, you should be looking at this type of coverage.
Multiple Offerings
There are two basic forms of burial insurance. The first is a “Guaranteed Acceptance” form of burial insurance. The second requires you to provide the answers to a number of health-related questions. Of these, the first one is the type of policy marketed on the broadest scale to the general public. The Guaranteed Acceptance type of policy is a complete burial insurance plan with simple terms and a monthly premium that never changes. Along with this, your benefits will never go down in value. Among the less pleasant aspects of this policy are that it tends to be expensive and there is a two-year waiting period.
If you should happen to die before the end of the waiting period, your survivors will not be paid any benefits beyond the money you have paid in plus accrued interest, even if you have made each premium payment on time every month. Once this waiting period is over, the policy reaches full value and will stay that way for as long as you live. Should you die because of an auto or airplane accident, however, the policy will pay out.
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