Cremation insurance is very small whole life insurance policy where the proceeds of the policy are meant to pay for the cost of a cremation and other final expenses. Coverage amounts typically range from $2,000-$40,000, benefits payout very fast, no exams are required and most health issues are accepted.
In this article, we’ll go over how these plans work, the cost, tips to finding the best policy and much more.
Article Overview (Click a link to jump)
- Policy Details
- Cost Of A Cremation
- Sample Prices
- How To Find The Best Policy
- Application Process
- Buying Coverage On Your Parents
Cremation insurance is a type of final expense life insurance that’s earmarked to cover the cost of a cremation.
They are generally a no exam required whole life policy with the option to buy small amounts of protection. Prices cannot increase, coverage can’t decrease and the policy lasts a lifetime.
Because these plans are whole life insurance the details of the policy are very straightforward.
- Premiums can never increase
- Policy can’t expire at any age
- Coverage can’t decrease
- No medical exam to qualify
- Fast payout of benefits upon passing of the insured
As you can see, once your cremation insurance policy is issued it will never change in anyway.
You can always count on it being there to cover the cost of your cremation and other end of life expenses.
Cremation Policies Are Rather Unique
These plans were designed by the insurance companies to serve a specific purpose (funeral, cremation and burial expenses). For that reason, they are radically different than traditional forms of life insurance.
Below are the two biggest ways in which final expense insurance for cremation is like no other:
- Small Face Value Options: Some of these carriers will allow you to buy as little as $1,000 in coverage. On the flip side, you can buy as much as you’d like. The ability to buy low amounts of coverage is optimal because it allows you to purchase only what you need especially when it comes to cremation. Most other forms of life insurance require you to buy $25,000-$50,000 in coverage.
- Very Relaxed Underwriting: Without question the lenient underwriting is the most unique element. These plans were designed to accept lots of very serious health issues that would otherwise get you declined for traditional life insurance policies. In addition, there are even some plans that have no underwriting at all. These are called guaranteed issue plans because your acceptance is guaranteed no matter what. Now those are a last resort, but they do have their place given certain health issues. It’s nice to know that no matter what you can get a policy!
How It Works
Because a cremation insurance policy is life insurance, it will merely pay out a tax-free cash benefit directly to your beneficiary(s).
There are no restrictions or stipulations regarding how the money is used.
Here’s something really cool…
Every funeral home or crematory in the USA will take cash, so a cash payout is ideal.
Obviously, your family probably won’t take the money and head to Atlantic City, but they could if they wanted to.
We only use that analogy to illustrate the point about how there are no rules regarding how the money is used.
For that reason, you’ll want to be sure to select a beneficiary that you trust will do the responsible thing and use the proceeds to cover your final expenses.
What About Leftover Money?
Like most final expense policies for seniors, a cremation insurance plan often provides more cash than is needed to cover all the final expenses. When that happens, the remaining money simply stays with your family for them to use as they desire.
Obviously money isn’t going to alleviate the loss of someone we cherish, but the leftover funds can be very helpful to the remaining family members. It’s a lot better than the money going to a funeral home!
Cremation Insurance Has Other Names Too
Ultimately, “cremation insurance” is just a marketing term that has existed for decades. It’s not an official term so to speak. Again, a cremation policy is just a specific type life insurance as noted above.
Depending on where you look, you may also hear a cremation policy go by the following names:
- Burial insurance
- Funeral insurance
- Final expense insurance
- End of life insurance
At the end of the day, ALL these labels mean the same thing. There is no difference whatsoever.
If you are going to properly plan for your final expenses, it starts with determining what kind of service you’d like. In your case, it’s obvious that you’ve chosen to be cremated rather than buried since you are reading this article.
Before you buy a cremation insurance policy, it’s a good idea to estimate how much your cremation will cost. This way you know how much coverage you’ll need to ensure you have enough to pay for everything, so your family won’t have to.
There’s a few ways to go about a cremation. Which particulars you choose will heavily influence the final cost.
Direct Cremation | $600-$1,200
A direct cremation is a term used to describe the most basic cremation service possible. There are no funeral services or events so to speak. You are just paying for the cost to have the body transferred, cremated, and placed in a basic urn.
The cost of a direct cremation can vary depending on the funeral home. Having said that, you’ll find they on average cost in the $600 to $1,200 range.
Direct Cremation With A Viewing | $1,400-$2,000
This one is a merely a direct cremation, but you pay extra to have a viewing of the body before it’s cremated. In this scenario, you’ll have the cost of the direct cremation along with whatever the funeral home charges for the viewing.
For the viewing, they will perform minimal preparation. You can select how much time you would like for loved ones to be able to come and see the deceased one last time. Just remember, the more time you request, the more it will cost. If for some reason the departed underwent an autopsy, the funeral home will likely charge you more for the preparation.
Most viewings will cost in the $700 to $1,500 range. Please note, those numbers are on top of the direct cremation itself.
Full Blown Funeral With A Cremation Instead Of Burial | $4,000-$6,000
For some reason, some people are under the impression that a funeral isn’t possible when someone is cremated. When in fact, nothing could be further from the truth!
It’s actually quite common for a traditional funeral (less the burial aspect) to be held when the deceased has elected to be cremated.
If you can’t wrap your mind around this concept, start by imaging a traditional burial service. Now instead of a body in a casket substitute an urn it’s place. Everything else stays the same. There’s literally no difference other than the fact that the body is no longer in tact because it was cremated.
From traveling in a caravan to the final resting spot to family members delivering a eulogy, funeral services for folks who have been cremated are every bit as viable.
There are many options you can choose so not only will the price vary quite a bit, but it can get pricey too. You’ll find that a funeral service with cremation will cost anywhere from $4,000-$6,000 on average.
Other Potential Costs To Consider
There may be other end of life expenses to consider outside of the cremation itself.
It’s a good idea to take these factors into consideration as well. This way, you can select enough coverage (assuming you can afford it) to ensure all your final costs are paid for.
Consider the following…
- Medical bills
- Outstanding debts
- Travel costs for people attending the funeral
- Transportation fees if you want a final resting place that’s out of town
- Income replacement
- Time off work for a surviving loved one (they’ll need money to do that)
- Leave money behind as a legacy to a loved one or charity
- Inflation (everything increases in cost over time. Funeral expenses are no exception)
Below are some real prices from one of the carriers we work with.
These rates are all calculated based on a person who has not smoked or chewed tobacco within the last year. In addition, the rates shown are for level coverage which means the policy would have no waiting period.
Keep this in mind too
People younger than 45 can still get coverage. If you are under 45, just run quotes by using the quote tool on this page.
Also, you can have any amount of coverage as you’d like. You are not limited to these face amounts. Lastly, your price may be higher or lower depending on the following factors:
- Exact age
- Tobacco usage
- State of residence
- Face amount you select
Age $2,000 $3,000 $4,000 $5,000 $10,000
45 $7.08 $9.02 $10.96 $12.91 $22.61
50 $7.42 $9.53 $11.64 $13.75 $24.31
55 $8.10 $10.55 $13.00 $15.45 $27.71
60 $9.14 $12.10 $15.07 $18.04 $32.87
65 $10.77 $14.55 $18.33 $22.11 $41.01
70 $13.21 $18.21 $23.22 $28.22 $53.24
75 $17.05 $23.97 $30.89 $37.81 $72.41
80 $22.25 $31.77 $41.30 $50.82 $98.43
85 $29.74 $43.01 $56.28 $69.55 $135.90
89 $57.86 $85.03 $112.21 $139.39 $275.28
Age $2,000 $3,000 $4,000 $5,000 $10,000
45 $7.99 $10.38 $12.77 $15.16 $27.11
50 $8.70 $11.45 $14.19 $16.94 $30.68
55 $9.75 $13.03 $16.30 $19.58 $35.95
60 $11.32 $15.37 $19.43 $23.48 $43.76
65 $13.86 $19.19 $24.51 $29.84 $56.48
70 $17.48 $24.63 $31.77 $38.91 $74.61
75 $22.56 $32.23 $41.91 $51.59 $99.97
80 $30.51 $44.16 $57.81 $71.47 $139.73
85 $41.11 $60.06 $79.02 $97.97 $192.74
89 $74.30 $109.71 $145.11 $180.51 $357.53
Once you’ve made the decision that you want the peace of mind that a cremation final expense policy affords, it just becomes a question of how you find the best one for you.
First, determine how much coverage you’ll need. If you haven’t yet done that, read the section above again.
This is critically important.
No matter how much coverage you want, the monthly payment must be 100% comfortable in your budget. It makes no sense to buy a policy whereby you will one day have to choose between food and your insurance. You’ll only lose money that way.
You might be wondering…
What if you can’t afford as much coverage as you’d like? What do you do then?
It’s simple. You buy as much as you can afford. Whatever amount you can provide to your family is money they don’t have to take out of their own pocket. They will love you for doing the best you could.
Once you have an amount of coverage in mind to ensure all your cremation and other expenses will be covered and you know how much you can afford, it’s time go shopping.
You have two basics choices regarding how you buy a policy.
1) Buy A Policy Completely Online Or Through The Mail Without Ever Speaking To An Agent.
Buying without having to talk to an agent sounds good right? … Not so fast
Here’s the truth
Any offer you ever receive (from any company) through the mail will always be what’s called guaranteed acceptance life insurance.
A guaranteed issue policy has no health questions or medical underwriting. Your health is simply not a factor. No matter how sick or healthy you are, you are approved!
You might be thinking… wow that’s amazing!
Sorry but these plans ALL have two major drawbacks
- They cost a lot more. The insurance company is taking on huge risk because they know nothing about your health. For this reason, guaranteed acceptance plans typically cost 40%-300% more.
- They all have a minimum 2 year waiting period. During the first two years of a guaranteed issue policy, the insurer will not pay out a death benefit. Instead, they’ll merely refund all premiums plus 10%-20% interest. There are no exceptions to this. There is no guarantee issue life policy on the planet that does not have a two-year waiting period.
As you can see, you’ll pay a heavy cost to not work with an agent.
If you are cool with that, go for it, but understand that 95% of people DO NOT need a guaranteed issue plan.
Most people can qualify for a policy that costs much less AND comes with immediate coverage (no 2-year waiting).
Which brings us to option number 2 regarding how you can find the best final expense plan for cremation… working with an agent.
2) Working With An Independent Agent
An independent agent is one who represents multiple insurance companies. Their goal is to evaluate your health, so they can determine which insurer is best for you.
You’ve obviously heard the concept of “shopping around”. Heck we all do it especially in the age of the internet.
Well working with an independent agent is doing just that! The only difference is they are the ones shopping for you (since you can’t due to the fact that you aren’t a licensed agent).
Now, a good and reputable independent agent will not have an affinity for any particular insurer. They will simply connect you with whichever insurance company has the best deal for you.
Here’s a couple of truths about working with an agent.
- There are many end of life insurance companies that offer coverage that has no waiting period. Immediate coverage plans are only available through agents. If you don’t talk to an agent, you are going to have a two-year waiting period.
- An independent agent is not out to sell you anything. Quite frankly, it’s your job to sell yourself. On your own accord, you need to decide that you A) want the peace of mind that a cremation policy provides and B) are willing to pay for it. No agent can convince you of that. However, once you have decided, your agent’s job is to act as your advocate by helping you find the best deal. They are very much like a cashier at a grocery store. They just help you process your request to buy something (and they provide expert guidance to ensure you get the best deal).
Choice Mutual Is Your Go-To For The Best Final Expense Insurance For Cremation
Unless you want to pay more and have a waiting period, working with an agent is far and above the surest path to YOUR best policy.
And you might be wondering…
Why should you work with Choice Mutual?
It’s very simple. Here’s why we are best equipped to help you find your best funeral insurance plan.
- We work with 18 different final expenses carriers. Having so many choices means we can shop the entire market to see which one will offer you the best deal. We don’t care which insurer it is. We just care about you.
- Final expense life insurance for burial and cremation is all we do. We believe in being masters at this type of insurance. First, all our insurance companies are suited for this kind of insurance. Second, after doing thousands of applications, we have intimate knowledge of how each one underwrites. This knowledge allows us to know with virtual certainty which ones will approve you.
- Our reputation is stellar. Our satisfied customers have left dozens and dozens of online reviews because they were so pleased with our service. In addition, we are licensed in all 50 states including DC, and accredited with the BBB.
- You’ll get no pressure expert help. Our website provides you with actual prices from 18 carriers (without having to put in a phone number or email), so you can comparison shop for yourself. In addition, we provide you with a behind the scenes understanding of how these policies work. We want you to decide on your own time if and when you want to buy. When you are ready, then you contact us. One of our agents will merely help you get approved. You won’t get a sales pitch or up sells.
Do Our Services Cost Anything?
We get asked this question a lot.
The answer is no absolutely not! Our service are totally free.
You might be wondering… Why are our services free? What do we get out of this?
Well, we do get paid; we just get paid a commission by the insurance company we place you with.
Now you might be thinking this may be cause for concern due to a potential conflict of interest.
Just know this.
We always recommend whichever carrier is best for you. We pay no special attention to who pays us the most. Our objective is to always be impartial, and you can trust that we will do that.
One of the biggest reasons why we have such an outstanding reputation is because we always put our clients first.
Keep this in mind too
No matter what, whenever you buy any form of insurance, an agent is making a commission. This cannot be avoided, and it’s not a bad thing per say. Commission is just an alternate form of payment rather than an hourly wage or salary. The insurance industry (all types) has always elected to go the commission route for compensation since forever.
The key is to select an agency that is out to work for you. Wink, wink Choice Mutual.
The exact application process you will endure will depend upon which insurance company you apply with. Having said that, to apply for a cremation policy through an agency such as Choice Mutual, it will be one of the following methods:
1) Voice Signature 100% Via Telephone
Many carriers have what is called a voice signature process. Basically, your agent will gather all your information to completely fill out the application. At that point, you and the agent complete a three-way phone call with the insurance carrier. The 3 way calls typically last 8-16 minutes on average.
On that call, they obtain the necessary authorizations, read some disclosures, and ask you the formal health questions. Almost all voice signature carriers will give you an immediate decision regarding your eligibility on that 3 way call.. In many cases, that means you are covered as of that moment!
2) Email Signature
Although not as common, signing via email is still an option with lots of burial insurance companies. With this option, your agent will gather all your personal information to fill out the entire application. Then you will get an email from the insurance company where you can sign the application by clicking a few buttons. That will put the policy into underwriting whereby you’ll receive a decision about your acceptance within 1-3 days on average.
3) Paper Via Snail Mail, Email, Or Fax
Sadly, some insurance companies still require paper forms to be filled out. For these companies, we would have to snail mail you the paperwork if you don’t have a fax or printer. If you do have the ability to print, we can email them to you. Regardless of how you receive the papers, you sign and return them. Usually, we’ll get a decision within 4 business days once we submit the application.
Yes you can absolutely buy life insurance for cremation expenses on your parents.
To do so, you’ll need to the following:
- Insurable Interest: Insurance companies require that beneficiaries can only be people who would endure some sort of financial loss if the insured were to pass away. Fortunately, the sheer nature of your relationship satisfies this requirement. In short, insurable interest is not an issue when you are buying a cremation insurance plan on one or both of your parents.
- Their Consent: You cannot take out any form of life insurance on someone without their consent. The insured must consent to releasing their medical information. Without it, the insurance company has no way of underwriting the policy. Even if you buy a guaranteed acceptance policy that has no medical underwriting, they still must agree to the policy. No way, no how is it possible to buy a policy on your parent if they are not willing to be involved.
Huge Tip When Setting Up The Policy
It’s totally fine if you want to pay for the policy and be the owner if you’d like.
This is VERY important if you want to be the owner.
Make sure you also designate yourself as the beneficiary as well. If you are the owner and not the beneficiary, the death benefit will be considered a gift by you to the beneficiary and it will be subject to taxes.
Just remember, if you are going to be the owner, make sure you are the beneficiary too.
If you don’t want to be the owner, you can still be the payer which is totally fine. Just being the payer won’t cause any tax issues for you.
Just tell us what you want, and we’ll make sure the policy is setup properly to ensure you don’t create a tax liability for yourself 😎.