Everything You Need to Know
About Burial Insurance
Why Purchase Burial Insurance?
According to AARP (www.AARP.org), the average cost of a funeral for most families is approximately $10,000. Depending on a wide variety of individual factors and circumstances, this average cost could arguable by much lower…or much higher. However, when you consider the fact that your family and loved ones could be forced to deal with a large number of financial choices and decisions that add up to such significant funeral costs, this is something that nobody should overlook or ignore.
THE HARSH REALITY: Unfortunately Nobody Lives Forever
You Have the Opportunity to Leave Behind ONE of the Following Memories:
1. No End of Life Plans or Preferences – Which basically guarantees your family and loved ones will be forced to deal with many difficult emotional and financial decisions…without having any idea “what you would have wanted“
2. A Comprehensive End of Life Plan – This shows you your family and loved ones how much you cared by taking the time to create a plan that minimizes or eliminates the many difficult decisions and funeral expenses.
How Does Burial Insurance Work?
Just as the name implies, the main purpose of burial insurance is to cover the funeral costs, final expenses, as well as pay off specific obligations or debts. Other terms that are commonly used to describe burial insurance are funeral insurance, final expense insurance, pre need insurance, and end of life plan insurance.
Burial insurance is generally associated with a permanent type of insurance policy (versus term insurance), and the most common permanent policy used is called whole life insurance. Most whole life policies which are purchased to cover funeral expenses range from $5,000 to $25,000.
As you may be aware, funeral costs can be extremely challenging. Some of the most common final expenses would include the cost of the casket, cremations, cremation urns, embalming, gravestone, body or funeral transportation, the cost of the plot, funeral flowers, the memorial service, and much more.
Although burial insurance is very similar to life insurance, the most common strategy is to own both types of insurance policies. This way the funeral expenses can be separated from the life insurance proceeds, making your last wishes much more straightforward as to how you wanted the life insurance proceeds to help fund or replace.
Key Details to Review and Consider
Even though the policy is called burial insurance, you are in no way forced to allocate the life insurance proceeds solely towards your funeral expenses. Given the fact that most policies have no restrictions, you can designate these proceeds to be used for anything else you choose, including house payments, debt reduction, estate or income taxes, and more. This means that burial insurance creates multiple opportunities for you to ease the pain of your loved ones lives during an otherwise difficult time, potentially decrease your debt or liabilities, and ultimately increases the amount of wealth transferred to your heirs.
Also, the proceeds of a burial insurance policy are a fixed and guaranteed amount. Since these monies remain constant throughout the life of the policy, you always know exactly how much is going to be there in your loved ones time of need. So once you pay the insurance company your premium, there’s no need to worry from then on because both the premium price or cost and the amount to expect are fixed for the life of the policy.
Another excellent feature is that the policy is guaranteed and can only be canceled if you fail to pay the required premiums payments, or if the policy was purchased in a fraudulent way.
Summary of Burial Insurance
Most financial professionals would agree that burial insurance is an excellent addition to an comprehensive financial plan. This funeral and burial insurance becomes an excellent strategy to protect your loved ones against many of the unnecessary financial and emotional loss during one of the most difficult times in their lives.
Although the concept is very similar to life insurance, burial insurance is actually much more specific. As the name implies, the intention of these monies are designed to specifically cover the costs of your end of life plan. However, as I mentioned earlier, burial insurance proceeds can also be allocated for other purposes if you prefer.
In most cases, burial insurance is a valuable addition to your financial and family planning, which explains why more than 65% of those who choose to preplan their funeral plans and preferences (either in writing or by actually pre-arranging the funeral home services in advance), also choose to purchase some form of burial insurance.
Arguably the best feature is that this insurance will likely end up being one of your families last memories of who you were. So not only does this insurance serve as financial protection, but it is also an excellent way to be remembered by your family and loved ones. The reason why is because they know that you cared about them enough to selflessly take the time to plan for these funeral expenses in advance. This provides them the ability to focus on what you would want, which is celebrating your memories and life’s story.
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*Supporting details and information were assisted by www.burialinsurance.org