There comes a time when you start thinking about the costs that will fall to you when your parent’s health starts to decline. End of life expenses can range from $8,000 – $12,000. This is a high cost for any family, but especially if you and your siblings are not prepared.
Fortunately, burial insurance can help cover these costs. There are rules and guidelines that need to be followed when taking out this kind of policy.
Can I Buy Burial Insurance For My Parents?
Children can buy burial insurance for their parents. The parent must be involved in the process, this includes agreeing to the coverage and signing their name. The child is allowed to be the payor and the beneficiary but must get the parent’s consent in order to take out a policy on them.
How Does Burial Insurance Work?
This product is a type of whole life insurance, what makes it unique and different from a traditional whole life product are two key factors.
No Medical Exams: These plans have simplified issue underwriting. The 30-minute application process can take place over the phone from the comfort of your own home. Your parent will need to be on the call and be able to answer a series of yes or no medical questions. There are also plans that ask no medical questions but the price will be higher and a waiting period will be implemented.
Affordable Coverage: The coverage amounts start from $2,000 – $40,000. This makes the monthly premium much more affordable than the larger whole life plans but your family will still receive valuable permanent benefits.
Price Never Increases: The monthly premium your family pays will never increase, no matter if it is year one of the plan or year 30, the price is locked in. For any senior on a fixed income, this feature is key.
Coverage Never Decreases: The coverage amount will never terminate or decrease. When taking out a plan it is vital that the policy is active when your family needs it the most. This plan gives loved ones the peace of mind that coverage is locked in and expenses will be taken care of.
Builds Cash Value: For each payment made a portion will go towards the cash value of the plan. This allows the policyholder to borrow from the plan if they wish.
What Does Burial Insurance Cover?
The money that the beneficiary receives can go towards anything.
This is one of the great things about this type of coverage, it is flexible. You are also not tied to a specific geographic area or plot of land if the insured moves out of the area or simply changes their mind on what they want.
What the money is typically put towards:
- Ceremony and service
- Celebration of Life
- Outstanding Debt
- Medical Bills
- Car Payment
- Replace Lost Income
- Unexpected Legal Fee
There are four types of plans a parent can qualify for.
Level: This plan is reserved for those who have a healthy medical history with no major medical diagnosis or recent surgery. If the applicant can qualify this plan offers immediate coverage and the lowest premium rates.
Graded: The graded plan has favorable underwriting which makes it easier for someone with a complicated medical history to qualify for coverage. With more lenient medical questions comes partial coverage during the two-year waiting period and midpoint premiums.
Modified: Offering a standard two-year waiting period, if this is the only plan the applicant is able to qualify for they are better off using a highly rated Guaranteed Acceptance plan. This is because the premiums for a modified plan are higher in most cases.
Guaranteed Issue: Asking no medical questions this product is best for those with a terminal or chronic illness, or someone who simply does not want to answer health questions. It is always in the applicant’s best interest to answer the medical questions.
How Much Does Coverage Cost?
The chart below shows the ranges an applicant will pay depending on age and health history.
The healthier someone is, the lower they can expect to pay in the price range. Conversely, the more complicated their medical history the higher they can expect to pay.
|45||$26 – $46||$37 – $68||$48 – $89|
|50||$29 – $58||$42 – $77||$55 – $101|
|55||$35 – $65||$51 – $84||$67 – $125|
|60||$43 – $69||$62 – $99||$82 – $138|
|65||$56 – $86||$82 – $125||$108 – $184|
|70||$73 – $117||$108 – $150||$143 – $215|
|75||$99 – $169||$148 – $207||$196 – $303|
|80||$133 – $246||$197 – $368||$262 – $539|
|85||$183 – $322||$273 – $473||$363 – $693|
|45||$22 – $34||$32 – $49||$42 – $64|
|50||$24 – $46||$35 – $53||$46 – $74|
|55||$28 – $51||$41 – $64||$54 – $95|
|60||$33 – $53||$48 – $74||$62 – $110|
|65||$41 – $65||$60 – $91||$79 – $135|
|70||$53 – $84||$78 -$110||$103 – $164|
|75||$72 – $123||$107 – $160||$141 – $235|
|80||$98 – $175||$146 – $262||$194 – $383|
|85||$132 – $232||$202 – $298||$269 – $437|
How is the price determined?
Health: Your health history will hold the most weight when it comes to price. This is because the more complex your parent’s medical history is the higher risk it is for the carriers to insure.
Age: The older the applicant is the more it is going to cost. These prices are locked in for life so the younger your parent is when taking out a policy the less will be spent each month. For example, someone over 80 will pay more for coverage than someone over 70.
Gender: Men pay more than women, this comes down to statistics. The life expectancy of a woman is four years longer than that of a man, so women statistically will be less of a risk to insure through the lens of the provider.
Policy Amount: The amount of coverage is the next determining factor. How much money does your parent want the beneficiary to receive once they pass away? Having an idea of the associated costs will help with deciding how large the check should be.
The more coverage you have, the higher your monthly premium will be.
How Do I Apply?
There are a few things to know when starting the application process to receive burial insurance for parents.
Choose An Agent
There are two types of agents to work with, Captive or Independent.
Captive: This agent represents one company and is unable to use other plans and other prices that could be a better fit for the applicant. This is problematic because every provider has different underwriting standards. This means if your parent takes oxygen one company may deny them coverage and a separate company will have no issue with this condition.
Independent: An independent agent represents as many companies as they wish. A highly rated agent should have the right company and plan for your loved ones’ medical conditions.
Choose an independent agent and you will save time and money.
What You Will Need Before You Call
Before contacting an agent you should have the following information about the proposed insured (your parent) as this will be required to ultimately go through the application process and apply for coverage.
- Height & Weight
- Health history (including timeline)
- Prescription history
- Desired coverage
- Phone number
- Date of birth
- Who will be the payor
The Application Process
The application process consists of four main steps that take roughly 30-minutes to complete from start to finish.
Fact Gathering: The process will start with a phone call. During this call, your agent will ask for a wide variety of information and will determine what plan your parent will be able to pre-qualify for. Your parent will need to be on the call even if you are the one guiding the conversation.
HIPPA Authorization: The proposed insured must allow for the carrier to check their medical and prescription history. If you are unfamiliar, HIPPA protects personal health and medical information from being shared without the applicant’s consent.
Medical Questions: There will be a variety of yes or no medical questions. This is one important step that the carriers require when going through the application process.
Signature Process: Your parent must also sign the application before it can be submitted. This can usually be done with an electronic signature through email.
Once the application has been submitted it usually takes a few business days for the policy to be approved by the carrier and then to be placed in force.
At this point, your parent’s policy will be active.
An automatic bank draft is usually the only option providers will accept. However, select companies will accept social security direct express cards.
Payment schedules can either be billed annually, semi-annually, quarterly, or monthly. Monthly billing is the most common.
The payments must be from one account. If you would like to split the cost with a sibling that will need to be worked out between the family as only one bank account can be set up to make payments.
Frequently Asked Questions
How much does a traditional service cost?
In the USA, the average cost for a traditional burial service with viewing is $7,643 and $6,280 for cremation. This cost estimate can vary drastically depending on a wide variety of options selected.
Not included in these price estimates:
- Cost of Headstone, Monument, or Marker
- Cemetery Property, Plot of Land, Columbarium, etc.
Does Social Security help?
Social Security will award a maximum death benefit up to $255, this is nowhere near what is needed to respectfully lay someone to rest, let alone bills that are left behind.
Do not count on this as your primary plan to pay for your parent’s end-of-life expenses.
My parent is a veteran: What help does the VA provide?
For a non-service related death, the VA will pay up to $796 for burial costs. Your parent would need to qualify for this amount through the VA’s extensive qualification process.
How fast does the lump-sum payout get distributed?
Once the provider receives the death certificate the lump sum payout will be distributed in a matter of days. This is a key component for families who need the cash upfront and cannot wait weeks or months to receive the payout.
Can I get life insurance on my mother without her knowing?
Your mother or father will need to be apart of the process prior to the application being submitted for approval or the contract being deemed valid. You can help facilitate the application process and even pay the monthly premiums but your parent will need to participate by signing their name and agreeing to coverage.
a. Burial Insurance for parents is easy to obtain but the parent must be a part of the application process.
b. To lock in the best possible rate it is important to take action sooner rather than later as changes in health often come without warning.
c. The application process is simple to complete and will give you and your family financial peace of mind.
At Willamette Life, this is a subject that is very close to our hearts and we would welcome the opportunity to assist you however possible.
Call us at 844-576-0019
I’m the owner and founder of Willamette Life Insurance. Willamette Life specializes in Final Expense Insurance. We compare prices with different insurance carriers while finding the perfect match for your health and budget. This company was started to help educate the public on why Final Expense Insurance could be a great option for them and their family. We strive to be friendly, informative, and always have the client’s best interest as our top priority. Everything in this article is my own professional opinion and experiences I have had during my time in helping clients.