Frequently Asked Questions (FAQs) About Burial Insurance
As you start to investigate burial insurance as a way to pay for your final expenses, you’ll likely have many questions. In an effort to save you time, here are the answers to some of the most common questions people ask about final expense insurance products.
Why do I need to buy burial insurance?
Burial insurance is a small life insurance product that is affordable and easy to qualify for. If you don’t have sufficient savings to pay for your final expenses, burial insurance will help prevent your loved ones from having to pay for your funeral out of their pocket.
How much burial insurance do I need?
The amount of coverage you need varies based on the type of funeral service you want and the funeral products you choose. Be sure to research your options carefully, and don’t forget to include the cost of a cemetery plot and associated burial fees. These expenses are often left out of average funeral cost calculations.
Do my beneficiaries have to use my burial insurance to pay for my funeral expenses?
Your beneficiaries get the funds after your death and are in charge of disbursing funds to pay your final expenses, bills or fees. It’s important to talk with your beneficiaries about the intent of your final expense insurance, so they understand your wishes.
Do funeral insurance premiums change over the years?
Your insurance premium is based on the coverage you choose, your health, and your age. The premiums will remain the same as you get older, even if your health declines or if you are diagnosed with a severe illness.
Certain policies have restrictions and may not pay out 100% if you die before a certain period of time has passed. Make sure you understand the funeral policy you are considering and any limitations it may have.
Is there any difference between burial insurance, funeral insurance, final expense insurance and pre-need insurance?
The terms burial insurance, funeral insurance and final expense insurance are all names for small life insurance policies designed to cover the cost of your final expenses. Pre-need insurance is a contract with a specific funeral service provider that covers the cost of the funeral service and products you’ve chosen at a predetermined price.
What’s the difference between burial insurance and life insurance?
The purpose of life insurance is to provide financial protection to surviving dependents after the death of the insured person. It can be used by the beneficiary to replace an income, cover children’s expenses, or pay off debts, estate taxes or final expenses.
The intent of funeral insurance is to cover funeral and other end-of-life costs only. The beneficiary of a funeral insurance policy is paid the benefit upon the insured person’s death. They can then determine how to use the proceeds from the funeral insurance.
While it’s still a life insurance product, burial insurance usually costs much less, is easier to obtain and has a lower coverage limit than traditional life insurance policies.
Can I get burial insurance if I smoke, have a pre-existing condition or a serious illness?
Yes. While you won’t have to have a medical exam, you will need to answer a health questionnaire that could affect your premium and coverage. Funeral insurance is a popular option for people who can’t qualify for traditional life insurance because of their health.
Can I name someone other than a relative as a beneficiary of my policy?
You can choose anyone to be the beneficiary of your final expense life insurance policy. While many people select family members to be the primary and secondary beneficiaries, the most important thing is to choose someone responsible and dependable. The beneficiaries you name are usually the people in charge of paying your final expenses.
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* Example policy is for female age 45, $10K policy which is $254 annually and $22.61 for a monthly premium. This policy is a United of Omaha : Living _Promise _WL and is a non-participating whole life insurance to age 100, policy form ICC12L080P, underwritten by United of Omaha Life Insurance Company, Omaha, NE 68175. The premium is guaranteed to age 100. Minimum issue amount is $2000, maximum issue amount is $40,000 for the level benefit policy and $20,000 for the graded benefit policy. Premiums include a $36 annual policy fee. For the graded benefit policy, if the insured dies due to natural causes in the first or second policy year, the death benefit will be 110% of the premiums paid. In the third policy year or later, the full death benefit will be paid for death due to all causes Forms and plan provisions may vary by state. Plan not available in all states. Suicide and other limits may apply. Rates effective as of 3/1/2017.
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