Should You Buy A Burial Policy?
If you have ever had to plan a funeral, you probably know how much it can cost
. That is the reason that many families consider buying burial insurance policies.
These policies, also called funeral or final expense policies are one common alternative for many families so they can be sure of having the cash to pay for the cost of a funeral when a loved one passes away. US funerals can cost eight thousand dollars or more. This is a very real concern with lots of people.
They may be permanent policies, like whole life, or they could even be term life. They usually have a pretty low death benefit when compared to other life insurance we think about. Whole life may range from about $2,500 to $25,000. Term life policies probably range from 25 to 50 thousand dollars.
This smaller face value means that it is easier to get them issued, and it keeps the premiums more affordable for average families.
How Much Does A Burial Policy Cost?
You have to compare premiums. They will differ because of the applicant's age, general health, location, insurance company and type of policy. I know that this all gets rather complex for people who are not inurance professionals. But online insurance quote systems can make it pretty simple to quote and compare. It is important to compare quotes before you buy because some insurers may have underwriting guidelines that are friendlier to different applicants.
You probably already know that it will be cheaper to buy a policy for a 50 year old than an 80 year old. The more elderly senior may even pay two or three times as much. But still, funeral policies can be affordable option vs. the alternative of having to save several thousand dollars on short notice.
Compare simplified issue and guaranteed issue policies.
Consider the basic types of funeral insurance. These two type of burial policies are defined by the way that an insurance company writes a policy.
A simplified issue policy will ask a few health questions, but most older people in decent health for their age should qualify. A simplified issue policy usually has an immediate death benefit. This means that the insured person is covered for the whole amount as soon as the policy is issued.
A guaranteed issue policy is quite different than most type of life insurance because it does not require any health questions at all. Instead of health underwriting, it uses a waiting period. It may have something called a graded benefit. This means that the insured person must survive a waiting period, after the policy is issued, in order for the beneficiaries to collect the whole death benefit.
If the insured person passes away before that waiting period expires, the family may get a portion of the full benefit, or they may just get premiums refunded. This is why it is called a graded death benefit, and it is not an immediate death benefit.
Why Compare Burial Policies?
Most of the time, simplified issue policies will cost less. So if you, or your family member, can qualify for simplified issue, I would urge you to consider that option. A lot of the senior life policies you see advertised on TV are guaranteed issue, so it is always important to compare plans and policies before you buy!
Guaranteed issue life insurance can be a good alternative for some seniors with severe health issues, but we just want you to understand your choices.
by: Marilyn Katz
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