When deciding the type of coverage that is best for your specific set of needs it is good to determine what your goal is in taking out a policy.
Are you trying to replace your income or just pay for your end-of-life bills? This will help you select which type of coverage is best for you.
It is essential to also know the associated costs of what it is that you are trying to cover. The average cost of a traditional burial is $7,643, so depending on the other costs that you need to take care of, your policy should reflect this in the coverage amount.
What Does Burial Insurance Cover?
Burial Insurance can cover anything. These policies are intended to cover end-of-life expenses which are not limited to just burials. The payout for this coverage allows the beneficiary the flexibility to choose what they purchase with the lump-sum tax-free payment.
Burial Insurance is a Simplified Issue Whole Life Insurance.
Simplified Issue is in reference to the underwriting process being very simple. With burial policies, you will never be asked to get a medical exam. Coverage can be taken out completely over the phone from the comfort of your home.
Whole Life is a type of insurance policy that lasts for the entire life of the insured and never expires. The rates and coverage amount are both locked in so there are never any surprises down the road.
Upon qualification you could get coverage with no waiting period, meaning these costs will be covered immediately.
While it is not mandatory that the money be spent on anything specific, there are common items that the majority of beneficiaries use these funds for. Some of these items might be very obvious due to the name of the coverage and others might be things that you have not yet considered in determining these final costs.
Since this product is referred to as burial insurance coverage, it’s fitting that it does in fact cover the costs of a burial. A traditional burial can be one of the more expensive ways to lay someone to rest.
There are several aspects to this type of process including a casket, service, obituary, body preparation, transportation of remains, etc. Burial expenses can add up quickly as each of these items come with its own price tag range.
The average cost across the United States can vary greatly depending on the decisions made along the way. This is due to the price ranges of each individual selection.
Choosing to be cremated is a slightly more cost-effective way to prepare someone for their final resting place.
The rate at which people are choosing cremation is on a sharp increase within the last ten years. This is due in part to religious institutions being more accepting of cremation and its lower cost.
While the cremation fee itself is less, the average cost spent on cremation with viewing is $6,280. This price average does not include a plot of land or grave marker.
Memorial Service / Celebration of Life
There are many phrases that are used interchangeably to refer to the gathering of friends, family, and loved ones to mourn the loss of the departed.
Whichever you choose to call it, these policies for seniors have the ability to cover the cost.
Some expenses that should be considered are:
- Food and beverage
- Rental items (tables, chairs, linens, etc.)
- Use of facilities/staff for ceremony
- Transportation of remains
- Other preparation of the body
If there are any outstanding medical bills that the insured had prior to passing away or that were incurred due to their passing, these can be taken care of with the death benefit payout.
For seniors who passed away in a hospital, the average bill for the last month of life ends up being around $32,379.
End of Life Care
Some other costs that could add up towards the end of someone’s life are:
- Hospital Care
- Palliative Care
- Nursing Home
- Home Health Care
- Hospice Care
These additional care options might be a necessity toward the end of life.
About 85% of end-of-life care costs could be covered by some combination of government entities (including Medicare, Medicaid, or VA), charitable organizations, or private insurance.
There is specific tax paperwork that needs to be filed after someone passes away. Legal expenses usually are forgotten in many end of life budgets.
If the insured has an accountant that they have worked with in the past it could be best to continue using this person as they will be aware of the individual’s specific financial situation. If there is not someone like this available, finding a CPA that specializes in final tax returns could also assist.
Regardless of who is filing these required forms, you’ll want to set some money aside to pay for it. Having an accountant act as a fiduciary and being proactive can be a powerful tool in saving your estate, and ultimately your family, tax dollars.
It is important to get the following documentation ready while you are still in good health. This will help to eliminate any potential confusion.
- A Will
- Assigned Power of Attorney
While everyone’s financial situation is very different, even if you are debt-free there is still a high probability that there will be outstanding bills that will need to be taken care of by those you leave behind.
These might include:
- Water bill
- Electric bill
- Credit card bill
- Moving expenses
- Car loan
If you have this policy in an amount that can cover more than just the basic burial and service costs, it will benefit your loved ones greatly by these bills not coming out of their pockets.
Post Mortem Expenses
This would include an autopsy if deemed necessary.
Two of the main benefits of an autopsy would be if any foul play was suspected or simply to help discover a genetic illness or other traits that can be inherited.
Most health insurance does not cover autopsies which can be $3,000-$5,000 to hire a private outside expert to do the job.
Leaving an Inheritance
This coverage can be taken out with the full intention of leaving a financial gift to a loved one.
Most commonly after the other bills are taken care of, the remainder of the death benefit is dispersed to loved ones, thus leaving an inheritance as apart of your legacy.
Leaving a charity donation is a very kind thing to do with the policy money and in itself makes burial insurance worth it. You could take this policy out with the intent of leaving it all to a charitable cause or you could donate a partial amount.
Generally, most donations are made with any funds that are in excess after the burial, and final bills are taken care of.
Is There Anything Not Covered?
Essentially there is nothing that this policy will not cover. If a particular item did not make this list, there is still the flexibility of using the money to pay for it.
As long as there are enough funds, these policies do cover anything that the beneficiary or policyholder believes to be necessary.
How Does Burial Insurance Payout?
Burial Insurance companies understand that beneficiaries need the death benefit as quickly as possible in order to start paying for the necessary arrangements. For this reason, the money is paid within a week of the claim being filed.
In order to file a claim, there must be a death certificate submitted along with the other required paperwork. The agent that the policy was taken out with will be able to assist the next of kin with the filing process.
Selecting a Trustworthy Beneficiary
By this point, it is clear that the money can go towards anything so you are going to want to appoint a beneficiary that you trust explicitly.
It is not only vital that you trust this person but it’s also important that they are willing to take on the task.
Make sure you have a beneficiary that knows your final wishes and arrangements
Having the difficult conversation about where you want to be laid to rest and how exactly you want this done will benefit your heirs almost as much as the financial assistance from the policy will.
Leaving these decisions up to anyone besides yourself can cause frustration with family and of course, you do not want this.
Multiple beneficiaries can be listed
The listed beneficiary can be more than one person. You will have the option to list multiple recipients of the death benefit, you can split this 50/50 or in any other percentage you feel is appropriate.
Even if you opt to list just one person who will receive 100% of the death benefit, you should consider adding a contingent beneficiary. This is essentially a contingency plan in the unfortunate circumstance that the primary listed recipient has passed away themselves.
Is Burial Insurance Worth It?
This coverage is intended to pay for end-of-life costs as to not leave a burden behind for loved ones. This is a personal decision that also comes down to the type of cost you are willing to incur each month.
For small monthly premiums, seniors can get the coverage they need, want, and can afford.
Some policies do have a waiting period while others do not, this is strictly dependent upon what someone is able to qualify for. The best burial policies do have low premiums with no waiting period.
Do not sign up with Colonial Penn or AARP just because you saw an advertisement on TV, make sure to do your due diligence on other options before applying.
Taking care of your family once you are no longer physically with them is an amazing legacy to leave. Peace of mind is achievable with this coverage and is worth it for millions of Americans.
How Does Someone Get a Policy?
There are many agents who sell this type of insurance policy.
Willamette Life specializes in finding the best burial coverage to pay for the inevitable end of life costs. Because we concentrate on one niche of the life insurance market and represent many carriers, we are able to find our clients the best life policy within their budget.
Give Willamette Life a call at 844-576-0019
a. What does Burial Insurance cover? There are no requirements as to how this money needs to be spent.
b. Since the death benefit is flexible, it is up to you to select a trustworthy recipient to carry out your wishes. Make sure these wishes are clearly communicated to the beneficiary.
c. Having other legal documentation finalized is also important, make sure to not have any contradictory instructions. You should also list a contingent beneficiary for security.
Stacie is the trainer of sales and customer service at Willamette Life. She enjoys educating both the staff and the public about Final Expense Life Insurance. By taking the questions frequently asked by clients she has been able to assist in developing a series of blogs that will hopefully be able to help more people than just those we are able to speak with.
We would be happy to answer your specific questions if there is anything we haven’t covered yet.