Burial insurance can protect your loved ones from the emotional and financial toll that funeral costs take on them. It can also cover their necessities, such as housing and food, in the immediate aftermath of a death. However, there are essential factors to consider when planning for burial insurance and tips to follow for the best.
Use these questions to get the most out of burial insurance. If you don’t want to miss this vital information, stick with me to the end of this post.
Why Buy it?
While death isn’t usually a good thing, it additionally presents several legal and financial issues. One, in particular, is burial costs. If you pass away without enough money set aside for your funeral expenses, your loved ones take additional costs.
However, there’s no telling what can happen in such an emotionally vulnerable time. This type of coverage is relatively cheap but provides an essential financial safety net if something goes wrong.
The following tips can help you get started when you want to buy insurance.
- Know Your Options
- Shop Around
- Buy Additional Coverage
- Compare Policies Carefully
Know Your Options
You have two primary options for purchasing burial insurance: an individual policy or a group plan. An individual policy allows you to choose exactly how much coverage you want.
On the other hand, group plans typically cover everyone within a certain age range or employment bracket. The usefulness of a plan depends on what you need.
Shop Around
As with any other form of insurance, you should shop around before settling on a specific company. Don’t let price alone drive your decision; instead, look at each company’s reputation and offerings, and fees.
Visit multiple websites to compare prices and call each company directly for more information about their policies. If you don’t like what they offer via phone call, move on to another company until you find what suits your needs.
Buy Additional Coverage
Many burial insurance plans come with a maximum payout limit. Some plans only provide $10,000 worth of coverage, probably not enough for those within a large family. If you want to protect yourself from higher costs, consider purchasing it as additional coverage through your life insurance provider.
Compare Policies Carefully
Before signing on the dotted line, make sure you understand your plan’s terms and conditions. Be especially wary of clauses that allow companies to change premiums at any time. Also, consider that many burial insurance plans have exclusions, such as pre-existing medical conditions or terminal illnesses.
How Much Do I Need?
It’s tough to gauge how much money you need for burial costs. However, it can vary depending on whether you want an elaborate funeral or a simple ceremony. If you haven’t thought about it before, ask yourself these questions like ‘will I have a casket?’
These questions will help you determine what kind of coverage you need. Be sure to speak with your insurance agent so they can guide you through all of your options. Many people who take life insurance also purchase additional policies that cover their funeral expenses.
Is such a policy necessary? The answer depends on several factors, including how much debt you have. Talk to your financial advisor or insurance agent if you’re concerned about paying for a funeral.
They can help you determine if purchasing a separate policy is right for you.
When Should I Buy It?
Funeral services cost thousands of dollars, so purchasing a burial policy is critical to protect your family against the expense. You should consider buying burial insurance if you have dependents or your spouse has dependent children. Since policies do expire, consider buying yours five years before you need it; that way, it won’t be a waste.
Also, check with your employer to see if they offer any life insurance benefits such as those described above. If so, you may not need a separate burial policy.
Furthermore, there are no rules on how much coverage you should buy; experts recommend $10,000 and $25,000. You don’t want to overspend on your burial policy, nor do you want to get stuck without enough money.
What About Whole Life Insurance?
Whole life insurance is permanent life insurance that generally has lower premiums than term life. Many people confuse it with burial insurance, and some even think it’s a special kind of burial insurance.
Unfortunately, a whole life policy isn’t designed to pay for your funeral—you can use it to help with funeral costs. It will almost always cost you more in total premiums over time. In general, if you need life insurance, it’s better to get a cheaper term policy instead.
What About Funeral Plans?
Funeral plans are another thing that gets confused with burial insurance. The two types of policies are not mutually exclusive, but they serve different purposes. A funeral plan is just a pre-paid plan.
You pay money into an account, and when you die, your family uses those funds to cover your final expenses. However, if you don’t have enough money, they could still pay out of pocket for your funeral.
Are There Any Hidden Costs?
Like most insurance policies, burial insurance includes several fees and costs. When you’re trying to save money on insurance, it’s crucial to determine whether there are any hidden costs. Moreover, that could affect your overall savings.
That way, you won’t be caught off guard by an unpleasant surprise when it comes time to pay your bill. It’s also wise to look into how much other people typically spend on burial insurance in your area.
This will give you a good idea of what prices to expect from different providers. The more information you have about typical costs, the better prepared you’ll be when comparing rates.
Conclusion
No one prays for burial, and anyone will consider it weird to plan for their burials while alive. However, you should do away with such a mindset and remember it’s not about you. You are making these plans for your loved ones to leave a legacy they will never forget.
