Burial insurance, sometimes also called a final expense policy, can be an affordable way to spread the expense of a loved one’s death over a number of years. Morbid idea? Not when you think it through. All of us reach the point of final expenses sometime.
Final expenses can be anything from a simple burial to hospital bills, attorney’s costs to administer a will, or gifts left to children or grandchildren. Depending on your personal desires, a burial or final expense policy might be as small as $5000-$10,000 or as large as $50,000-$100,000.
Most folks don’t really put a lot of thought into this kind of life insurance until they start to see “final” kind of off in the distance. Generally at that point most of us don’t want to be bothered with exams and people poking around our medical history so we opt for a guaranteed issue life insurance. We just want to sign up without any hassle. There are some good and some not so good products out there for those who want to take the easy route.
If you are in good health and just don’t want to take an exam, ask your independent life insurance agent about simplified issue life insurance. There will be a few health questions, but it is generally very easy to qualify for, comes in both term insurance and whole life, and is usually less expensive than guaranteed issue.
If you have some fairly serious health problems, guaranteed issue life insurance is a good option. Again, employ an independent life insurance agent to do the shopping for you. They will be able to get through the fine print and find a good match for you.
Are these types of policies a good idea? You know, they really are unless you have $10,000 in a box marked final expenses.
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.
My 20 years of experience give me the knowledge and leverage to find reasonably-priced life insurance for people who have been declined or are paying more than they need to.
Life Insurance is great. But, having $10,000 set away in a separate account marked final expenses does not lock in the price of the funeral or cremation. By preplanning and either making monthly payments, single payments, etc….the cost of the final expense (merchandise & services) is locked in forever. This is pretty good – we can’t stop inflation. Also, I was just informed that some of these policies are written up to 10 years with zero finance charges. I don’t know of ANYTHING you can purhase over time without finance charges.
Sheila,
Not sure where to start. If you go back to my post, while I did use $10,000 as a possible amount, I also suggested that depending on individual needs, up to $100,000 might be appropriate. As for prepaid burial policies, they often have a limit on the “merchandise and service’s” cost and having just buried my father I can tell you that even the best intentioned plans can easily fall short.
My recommendation is to talk to a life insurance professional as opposed to someone selling burial services.