If your looking into Burial Insurance today, you probably aren’t looking to do a whole lot of research. Human nature…no one likes to think about insurance, particularly one that reminds us that we will not always be here.
Death is not pleasant to think about and equally unpleasant to plan for. However, as a universal truth, everyone of us will someday have to face and deal with our own mortality while we still can. I realize some visitors here may be handling this for a family member as well. While it is something most are not motivated to get done, it is important that we take action to make sure family and personal obligations are covered while we can. We certainly do not want our passing to cause financial harm to our loved ones in their loss.
Leaving a grieving family in a mountain of debt is the last thing most seniors we work with want to do. I suspect you feel the same way.
Burial Insurance to the rescue!!
So what is Burial Insurance?
Well, Burial Insurance is a special type of life insurance issued by many different insurance companies actually. It is a policy that is generally smaller in nature, typically between $3000-$25,000 and built on whole life insurance. Burial policies to $50,000 are available with a limited number of carriers offering up to $100,000.
Whole Life insurance is permanent life insurance. It will not expire. Benefits are guaranteed as long as you pay your premiums. Coverage is designed for smaller amounts Further, it is designed to pay out the death benefit quickly and pass on the funds tax free to your loved ones. The general purpose is to cover expenses related to death. For example, a funeral, a burial plot, final medical bills, credit card balances etc. can all be paid by a policy. Anything leftover can be used any way your beneficiary(s) may see fit.
Payments are most often monthly but other options are available. Benefits are available once your application is approved. The death benefit is tax free to your properly named beneficiary(s) whether 1 or years of payments have been made.
Do I really need this coverage?
Well, maybe you do have money in the bank to pay those costs. You could prepay your funeral and burial costs at the funeral home. Now, what happens if the funeral home goes out of business down the road? That is right, your money is gone!! No insurance with a funeral home. Next, ask yourself if there is going to enough money leftover for your spouse or other loved ones to maintain their current lifestyle or are there other family members you wish to leave a legacy for?
It is darn expensive to leave this world. A full funeral and burial can easily run $10,000 these days. Sure, cremation is much less, but still thousands of dollars after all accounted for.
Burial Insurance Plans are made for people 50-85 from most insurers. Each company will charge a different premium for the same amount of coverage. You will want to have get a professional ideally to guide you. It is easy to get ripped off by some real big names. Names you even see on TV.
With an independent agent/broker, you will cut to the chase and find the best policy for you. Burial Insurance can be very affordable prior to age 80. At age 80+ we recommend self insuring. It becomes very expensive at this point and the value of the protection has diminished. Prepayment at the funeral home would be a second option.
Remember, burial insurance is designed for seniors. It is expected that you have health issues. Qualification requires no medical exam. No worries there.
How Burial Insurance Works…
Coverage under a burial policy actually allows advanced planning. You are simply planning for an uncertain time, but inevitable passing for yourself or another loved one. It allows you to arrange your own funeral and have those wishes attached to your burial insurance policy. You may take your policy to the funeral home. They can attach any arrangements to your policy to be filed away together. Done. Now just pay your premiums. At some point in the future, the policy will take care of the financials by providing the necessary funding.
Since these policies are based on whole life insurance, they will develop some limited cash value over time. We do not recommend you borrow against those funds. Any unpaid loan will be charged against the policy death benefits and could shortchange your beneficiary the necessary funds to cover the cost of death. A $10,000 policy will not have much latitude to borrow against if a full funeral and burial is in your plans. Of course it is an option to you if you have a larger policy and can afford to do so, just be aware what your intent of the coverage is for.
Accommodating For Less Than Good Health
To accommodate the varying levels of health with seniors, life insurance companies have developed a couple different programs. You can think of them as benefit levels.
- Level Benefits – The full death benefit or “face amount” of the burial insurance will be in force the day the actual application is approved by the insurance underwriter.
- Graded Benefits – With these, there is a 2 or 3 year waiting period until full benefits are available. If death of the actual insured took place during the first 2 or 3 years, all premiums will be returned plus interest which is typically 10%. These policies are for seniors that have health conditions that may have an impact on there longivity. An example of this would be Type I diabetes. You can expect the premiums to be higher because of the additional risk the carrier is taking.
Graded plans are typically used for those with real tough health conditions. Graded Burial Insurance may be a form of Guaranteed Issue Life Insurance. Guaranteed issue requires no health questions at all. As you can imagine, guaranteed issue coverage is more expensive as it covers the insured regardless of health. Guaranteed Issue should be the last resort for burial insurance. Though it is the easiest to apply for, its cost will often take “value” out of the coverage. Depending on age, it may be more appropriate to self insure or consider prepaying burial costs at a funeral home.
Guaranteed Issue Burial Insurance is not needed by most seniors. It is for extreme health risks. Burial Insurance health underwriting questions are designed for seniors. Do not assume because you have high blood pressure or had a heart attack that you cannot obtain affordable, medically underwritten burial insurance even with no medical exam. It is simply not the case if you are working with a specialized, independent life insurance agent/broker who knows the industry.
With that all said, you may have some typical senior impairments or a condition controlled by medication, but it is important that we speak to sort thru what the industry insurers will accept. The advantage here is to avoid “easy to qualify for” programs that are financially burdensome and more often than not, policies with limited benefits the first 2 years. The truth is, most burial insurance designed for seniors is already “easy” to qualify for. Don’t get sucked into the marketing hype of all the advertisements.
Who Can Purchase Coverage
Typically, anyone 50-85 is the standard, but in some cases as early as 40. There are limited insurance companies that issue burial insurance policies below age 50, but there are a few options to look at.
Can I Buy Burial Insurance For My Parents?
A common question comes from children of elderly parents who are helping make funeral arrangements for their aging parent(s).
You can buy life insurance on your parents. Most are looking into a burial insurance plan that will cover the cost of their parent(s) funeral and burial as it can be a major financial burden for many families. Children may take coverage out on their parent(s) and become the owner and beneficiary of the policy, but any parent must consent to the coverage.
Most carriers will call the proposed insured to conduct a quick interview to verify their consent and understanding that someone is taking out burial insurance on them. Parents will also be required to give an electronic (over the internet) or voice (phone) signature attesting to their agreement. This is for their protection and does not take but a few minutes to complete.
What If I Need a Larger Policy?
If a burial policy up to $25,000 is not adequate, we would recommend taking a look at at a Guaranteed Universal Life Policy (GUL). Depending on your age, it may benefit you to look at Guaranteed Universal Life closer to $25,000. Typically, this type of policy will actually start at $25,000 and go up from there.
GUL is commonly used for estate planning and offers much higher face amounts (death benefits) than simplified issue burial insurance. The premiums are considerably lower for policies this size and the coverage can be guaranteed to age 121.
No exam coverage is also available for these larger policies, subject to your age and size of the policy.
Remember, burial policies should be based on permanent life insurance to prevent outliving your coverage. A burial plan should include an appropriate type of insurance that ensures the needs of your love ones are met regardless of your age.
So Do I Really Need a Burial Policy?
Burial Insurance is a very affordable type of coverage, but it isn’t for everyone. Some people are just better off with a different kind of life insurance instead. Folks that are in or near their senior years are the best candidates for a burial policy. Burial Insurance is a very good way of ensuring your family has what it needs financially to carry on without you.
If your debt is low and don’t have any family members that need financial support, you may also want to consider self insuring for your final needs planning. Some people just have all the financial reserves in place to cover all burial costs, medical bills, outstanding debt and the like.
It just may not make sense to you to go that route. That is ok.
With that said, burial policies can work well for those who want and/or need permanent coverage and prefer a simplified application and issue process. It also is a “no medical exam” type of insurance and is based on the answers to the health questions on the application.
Now, if you are at a point of your life where you are not saddled with a large amount of debt and in your senior years, a smaller burial insurance policy might really make sense. Something that strictly covers the costs to lay you to rest.
If your personal situation may leave behind larger amounts of debt or you wish to create a legacy estate for your loved ones, a larger or even a guaranteed universal life insurance policy would be a more appropriate solution or consideration of a hybrid combination of different policies to better match your needs.
Top 10 Life Insurance Companies +1…Best Burial Insurance Carriers
One of the big problems consumers face is having the time it to investigate and determine which burial insurance carrier will offer them the best rates. Here is the fact…there is no “Best” insurance company for everyone’s personal needs. What you are looking for is the ideal product first and then determine its cost to see if it is a good solution for your family needs.
There are many factors that go into determining the ideal life insurance company that are best left to working with an independent agent/broker who specializes in high risk life insurance. They can quickly identify who may be your best option. However, for your reference, here are the 10 + different companies that tend to be great contenders…
AIG came out of nowhere in 2017 announcing their Guaranteed Issue policy. Burial Insurance is now available from the life insurance giant, American General with absolutely no health questions and no medical exam required.
This particular policy is for ages 50-85 and has coverage amounts available up to $25,000. As is the the norm for guaranteed issue coverage, this policy is graded and will pay 110% of the premium paid in if the insured dies in the first two years of coverage. The full death benefit will be paid out after the 2 year waiting period expires. The person paying on the policy can be someone else other than the actual insured. This makes this a good option for those children looking to plan for a parent or parents inevitable passing who may not be able to afford the costs associated with death.
Americo has designed a few different burial insurance products for ages 50-85. All these products are designed to cover final expenses and or burial expenses. The premiums are as such guaranteed to never go up and the coverage amount can never be reduced unless you take a cash loan out against it. (Not recommended) Applicant age range is 50-85. Coverage can never be cancelled due to your health or age. Policies as low as $2000 and as high as $30,000 are available from Americo. On their Ultra Protector Series, an accelerated benefit rider is available that allows up to 50% of the death benefit to be paid if the insured is diagnosed with a terminal illness. The Ultra Protector I and II do require all applicants to pass the medical underwriting portion before coverage can be issued. No medical exam is required.
For level, graded and modified death benefit burial policies, American National offers permanent coverage with benefit amounts from $2000 all the way to $50,000. Specifically up to $25,000 for grades and modified and $50,000 for standard whole life coverage with full death benefit availability upon acceptance. All policies build cash value and offer an terminal illness rider for policies of $25,000 and greater.
Assurity is a top life insurance company for a simplified issue, no-medical exam policy. These whole life products offer affordable answers those those who need, burial, final expense or funeral insurance. Coverage can begin as soon as you are accepted and issue amounts range for $5ooo to $50,000 for those under age 65 and under. From 66-80, the maximum benefit amount to your beneficiary is $25,000.
Baltimore Life offers a permanent, whole life, burial insurance plan called “Silver Guard.” Silver Guard I is a policy that will require all applicants to qualify based on health questions contained in the application.
For those individuals that have a serious condition that can be maintained, the Silver Guard II and III could be good options. While these are both graded death benefit policies, they offer 25% of the full death benefit in year 1, 50% in year 2 and the full 100% in year 3. The full death benefit is payable in the case of accidental death.
Foresters offers a competitive simplified issue burial policy which will require health questions to be answered, but there is no medical exam required. Again, as a simplified issue plan, it is designed for seniors age 50-85. Foresters health questions are quite liberal so often times they can offer coverage on standard rates versus a more expensive graded policy. Even with the more liberal underwriting, Foresters can be very competitive for Burial Insurance. Maximum coverage is $35,000 to age 80 and $15,000 for age 81-85.
Gerber is probably best known for its very competitive guarantee issue whole life policy. It suits individuals with very serious health issues and provides low rates for being burial insurance issued with no medical questions or exam required. Coverage is available for people age 50-80 with death benefits ranging from $5,000 to $25,000. As with any guaranteed issue policy, the coverage is graded for the first 2 years. If death occurs due to an accident, the policy will pay the full amount. If the insured passes away due to natural causes during the first 2 years, the beneficiary(s) will receive all premiums paid plus 10% If your needs require a guaranteed issue policy, you can do a lot worse than Gerber Life.
Mutual of Omaha
Here is another one of the big names out there in the life and health insurance business. A Fortune 500 company at that. Mutual of Omaha offers their own whole life burial policy for ages 45-85. Burial insurance in the amount of $2000-$40,000 is available on this standard simplified issue policy. An accelerated benefits rider allows the policy owner a one time option to receive a large lump sum payment in the event of a terminal illness. Mutual of Omaha has random phone interviews and prescription drug screening for their policies. You should be prepared for a 20 minute conversation with someone in the underwriting department to verify the information provided in the application is accurate. Little more red tape, but Mutual of Omaha offers an excellent peace of mind combined with competitive rate.
Sagicor Life offers a simplified issue universal life insurance product for people 18-65. Individuals age 66-85 will be required to go thru full medical underwriting during the application process. While this is more involved for many to get issued, be aware that these policies start at a minimum of $25,000. This is a no lapse, universal life product meant for higher death benefits.
Sagicor offering makes it a very good option for those needing a larger amount of coverage than typical burial insurance policies. The company has many rate classes to qualify people and does take higher risk conditions in many cases. An accelerated benefit rider for terminal illness/chronic illness is included in the policy at no cost to you.
One of the most well known and highest, financially rated insurance carriers out there, Transamerica has provided top notch coverage to people all across the country for over 100 years. Though the “power of the pyramid” is still their symbol, Transmerica is no longer headquartered there. One of the pointers that sets them apart from their competitors is that they offer burial insurance plans that are considerably larger than most other companies in the industry.
Under age 55, you can purchase up to $5o,000 of coverage which doubles the offerings of most other carriers offer. At age 65 you may purchase up to $45,000.
These are policies with a few extra bells and whistles not found elsewhere and receive positive reviews here.
United Home Life
United Home Life offers their Express Issue Premier series of Burial Insurance. It is a simplified issue policy and covers people age 20-80. Death benefit amounts start at $5,000 all the way to $100,000 for ages 20-60 and $5,000 to $50,000 up to age 80. This makes United Home Life a good option for seniors. It is favorable product for a bit healthier applicants that are looking for a very competitive cost of coverage.
Burial Insurance for Seniors – The Wrap Up
Burial Insurance is a niche product designed to quickly meet the needs of those typically in their golden years. Some of the purest products will be no exam and have limited health questions for coverage Yes, policies can be issued to as low as age 40, but that is not the typical consumer of this type of life insurance product.
A burial policy, at the heart is permanent life insurance. You are in full control of whom the benefits are paid to. Its design also includes tax free benefits to your properly named beneficiary(s) of the policy.
You may also here the term funeral insurance used interchangeably with this type of coverage. While burial insurance provides coverage for funeral expenses, the benefits of “funeral insurance” are most often assigned to a funeral home to cover the expense of a prearranged funeral cost, hence, “funeral insurance.” The funeral home is often set up as a “irrevocable” beneficiary which is discussion beyond the scope of this article but something we may suggest/use for Medicaid planning.
We recommend that you make sure your beneficiary(s) is someone you know personally and someone that cannot “go out of business.” Thus, we also do not recommend prepaid burials as an for the exact same reason.
Since a burial insurance policy may build up cash value as an additional benefit, we do not recommend taking loans against this type of coverage. Often times, these are relatively small policies that don’t leave a lot of “fat” to allow for loans that may go unpaid and deplete the death benefit below expected funeral and burial costs.
I have mentioned at least 10 top life insurance companies that provide burial insurance plans. We work with many others. One is not necessarily better than the other. I’m sure certain names are more familiar to you, but “the best” really depends on your needs and wants at a personal level. We have placed client business with companies not on this list. Don’t feel as though you must have coverage with any of these companies. There are many fine companies out there. Your independent life insurance agent/brokers can guide you to what is best for you.
I will put up a red flag here.
Be very careful who you are placing your business with. Some of the big names out there are pushing reduced benefit, overpriced insurance to seniors. Lots of misinformation and questionable marketing tactics have flooded the senior burial insurance market. This includes the use of guaranteed issue, no health question policies that are frequently highlighted.
Find a good independent agent/broker who can assess what you really need and can suggest a product and carrier. It costs you nothing to have a middle man/woman that is shopping and suggesting what is in your best interest. If you do not like who you are speaking to, find someone else. You have a lot to gain by having an advocate without the downside.
While we have laid out a some food for thought here, you may feel you still have some unanswered questions. Feel free to continue browsing our site, leave a comment below or better yet, simply give us a call at 800-598-6445. We’re here to help and can get your questions or concerns addressed.