Bury the Costs: Is Burial Insurance Worth It?
As you get older, it’s time to start thinking about what you’ll be leaving behind when you’re gone. There will surely be plenty of wisdom and good memories for your loved ones to hold on to, but one thing that you don’t want to leave for them is a lot of expenses to pay off for you. Funeral expenses can be, well, very expensive; in Council Bluffs, the average funeral costs around $8,000, and many go above $10,000. It is for that reason that people reach out to us at JL Senior Solutions and talk to Joe Kathrein about getting burial insurance.
Burial Insurance Vs Life Insurance
The main difference between burial insurance and life insurance is that burial insurance is a type of life insurance only meant to cover a specific area. Full life insurance is meant to provide for family members that would have a difficult time providing for themselves or to help ease expenses or debts that might be passed on to the family, such as medical debt, mortgages, or to help pay for a child’s future. Burial insurance, on the other hand, is meant only to ease the burden of paying for a person’s funeral. One other small but important difference Joe wants you to know about is between burial insurance and funeral insurance. These two are very similar except that the payout for funeral insurance goes directly to the funeral home that arranged the burial, while burial insurance payout goes to your beneficiary, often to pay funeral costs but can actually be used however they see fit.
Despite burial insurance covering less than traditional life insurance, there are some significant benefits to burial insurance. Perhaps the biggest pro is that you are not required to take a health exam and applications for burial insurance have a very light health screening. This means that they tend to be easier to qualify for and the price of the insurance depends much less on your health. There are even specific burial insurance policies, called “guaranteed issue life insurance,” that you cannot be turned down for. It is a good option for people with health issues that might disqualify them for other forms of life insurance. Another advantage is that burial insurance does not have a time limit like life insurance does. With life insurance, you might end up outliving the length of your policy, while with burial insurance your beneficiaries are guaranteed to receive a payout since it simply lasts until you pass away.
The downside to the ease of burial insurance is that, despite it covering and paying out less, burial insurance actually tends to be more expensive. According to Forbes,
A healthy 50-year-old male can get a $100,000 term life insurance for 30 years for less than the cost of only $1,000 in burial insurance. Even a 50-year-old male with high blood pressure can get that same term life coverage for less than a $10,000 burial policy. (Metz, https://www.forbes.com/advisor/life-insurance/burial-insurance/)
Part of the reason for these higher rates is due to insurance discounts. Insurance companies often offer discounts on life insurance for people in good health, but that same benefit is not offered for burial insurance because they don’t ask many questions about your health. Even then, some preexisting medical conditions or other medical information can make it more difficult for you to get burial insurance. Usually the conditions that prevent you from getting easy access to burial insurance are very serious conditions such as late-stage cancer, dementia, or anything that would require someone to undergo circulatory surgery or put you at risk for a heart attack. While these won’t be a problem in most cases, it is something worth considering, especially since health issues tend to get worse with age. With many of these conditions, the older you are, the more likely you are to experience them . Another difficulty with burial insurance is that most policies have a 2-3 year waiting period before the policy starts taking effect, meaning if you die within that time your beneficiaries do not receive a payout. Once again, having serious health problems makes you more likely to have to take a policy with a waiting period.
So Is Burial Insurance a Good Idea?
The short answer is maybe. It depends on your health and your age. While in many cases, life insurance is cheaper and offers more benefits, you might not qualify for most life insurance policies and as a result, burial insurance may end up being a very good option for you. Even when you have a serious condition that raises the cost of burial insurance and makes it harder to qualify for, you are guaranteed to at the very least qualify for guaranteed issue life insurance, a type of burial insurance which is designed so that everyone qualifies for it. If you are in good health and can afford to take out a long life insurance plan, that is usually a better option; burial insurance is a safe option for those who don’t have the luxury of good health.
Contact Joe Kathrein at JL Senior Solutions to learn more about how you can use final expense insurance to help your family with burial expenses.
