Burial Insurance may also be referred to as “funeral insurance”, “senior life insurance,” or “final expense insurance”. While these may sound like fancy terms, they are quite similar to whole life insurance.
It can be viewed as a type of whole life insurance that allows people to ensure that their loved ones are not left in debt after they pass away. Most insurance companies offer Burial Insurance with no waiting period, no matter how big or small they might be.
Understanding Burial Insurance
Usually, Burial Insurance is marketed as crucial insurance, especially for seniors. However, this may not always be the case. If you have existing insurance policies, you can compare the terms and benefits for both insurances to determine whether you need Burial Insurance.
Why Do People Opt for Burial Insurance?
With most people already having life insurance, why do some people opt for burial insurance? In many cases, burial insurance may be a good fit due to your age, health conditions, or life expectancy.
Burial insurance is life insurance with a death benefit. Thus, those with an insurance policy that does not have a death benefit or lack adequate death benefit may look into burial insurance.
Depending on which policy and company you opt for, burial insurance usually does not require a health check-up. It is also important to note that it may not offer the same interest per premium as life insurance policies. This is because burial insurance policies are mainly to handle final expenses, although it depends on the beneficiary how it is used.
What Are the Waiting Periods for Burial Insurance Policies?
There are mainly three types of waiting periods for burial insurance. However, most would like to opt for burial insurance with no waiting period as it offers immediate coverage, which is useful for funeral and burial expenses.
- No waiting period: Coverage starts immediately, and there is a 100% fund payout.
- Partial Waiting Period: Partial coverage starts immediately; in some cases, you receive 30%-40% coverage instantly for the first 12 months. Then, up to 24 months, you receive 60%-70% coverage and post 24 month waiting period, you receive 100% coverage.
- Modified Waiting Period or Two-Year Waiting Period: Depending on the policy, you may receive immediate coverage for accidental death, an 8%-10% interest on premiums, and a return of premiums. After the waiting period, you get a guaranteed return of premiums.
What Are the Other Options?
Final expense insurances help people ensure that they do not have financial loose ends. When you want to protect your loved ones from paying funeral expenses and burial costs, these insurances may seem like a great idea.
You can also set up your savings account and assign a family member as a beneficiary. This will ensure that they can withdraw money immediately when funeral expenses need to be covered. It may be a better option for those who only want to cover their funeral and burial expenses since there is no waiting period to receive the money.
Planning your funeral is only the start; you may also need to keep in mind your estate planning and ensure that your family members know your wishes. Thus, it is essential to keep your family members in the loop and stay organized.