6 key things to know about burial insurance

Burial insurance makes for a crucial part of a comprehensive financial plan. It is a specifically designed tool that brings peace of mind to families during difficult times. By taking care of end-of-life expenses, it ensures family members of the deceased don't have to worry about financial burdens while they are grieving. In the ever-evolving landscape of financial instruments, burial insurance is a reliable companion, offering a pathway to financial security to families. What is burial insurance? A life insurance policy, including a death benefit, is known as burial insurance. Alternate terms used for it are final expense or funeral insurance. The benefit can be bought for $5,000 to $10,000. However, for a considerably larger coverage amount, applicants might have to pay higher premiums. People invest in burial insurance to secure the funeral and burial expenses for themselves and their family members. Depending on the insurance one chooses, the premiums might need to be paid weekly or monthly. The life insurance can be approved without any need for medical examination. To apply for the insurance, applicants need to fill out some forms and answer a few health-related queries. The death benefit clause of the insurance may vary based on the age of the applicants. How does it work? Applicants need to work on choosing the amount of policy coverage they would like to apply for. Once that is done, the next step is choosing the beneficiary that will be entrusted with the money upon the passing away of the applicant. After the death of the insured applicant, the beneficiary needs to contact the insurance company and start the claim process. For the process to move forward, the company might require some identification confirmation from the beneficiary and a certified copy of the insured person's death certificate. What does burial insurance cover? A funeral insurance policy includes the following: Funeral service expenses, including embalming of the body, buying a hearse, and creating a memorial service Pending loan debts Pending medical bills Unexpected expenses during the burial process What is the payment plan? Burial insurance premiums are often more affordable compared to traditional life insurance policies. This makes it an attractive option for individuals looking to secure coverage without straining their budget. Policyholders can opt for one from various payment plans, including monthly, quarterly, or, in some cases, annual payments. The flexibility in payment options allows individuals to tailor their burial insurance to their financial situation. For most weekly premiums, the amount is expected to be $2 to $5. However, it might vary based on the chosen amount of coverage. Are there any considerations for seniors? Burial insurance caters to the needs of individuals from different age groups. There are also structured policies that take into account the unique circumstances and requirements of individuals in the later stages of life. Since burial insurance often involves simplified underwriting, individuals with pre-existing health conditions may find it more accessible than traditional life insurance policies. Are there any limitations of the policy? Like most other insurance policies, burial insurance also has a certain waiting period. Therefore, beneficiaries have to wait for the complete death benefit amount to be received. During the initial period, policies might offer some percentage of the payable amount or return on premiums in case of the death of the insured individual. It is prudent that people take into consideration the potential increase in funeral and burial costs over time. This is because the policy amount paid might not cover the increase in funeral costs owing to inflation.