The Step-By-Step Process On How To Buy Burial Insurance
Below is a step-by-step guide to buying a burial insurance policy.
Step 1) Determine your coverage needs
The purpose of the final expense insurance is to cover your end-of-life expenses. That primarily includes the funeral costs themselves, but can also involve financial debts, medical bills, or money you simply want to leave behind for loved ones.
First, identify which type of funeral you prefer (burial or cremation) since that will heavily influence the cost. On average, a traditional burial costs roughly $10,000, whereas a cremation costs roughly $7,000. A funeral cost calculator can be especially helpful for developing an accurate estimate.
If you want to account for debts, medical bills, or money you’d like to leave to loved ones, total those up and add them to the funeral cost figures.
The ultimate formula would look like this. Just choose which ones apply to you: [Funeral costs] + [Debts] + [Medical bills] + [Legacy leftover money] = Total coverage needed
That large total will give you a good estimation of how much coverage you should ideally buy.
Step 2) Research
The next step is to research all your options to find the best policy for your needs. Thankfully, the internet makes it possible to identify companies, policy details, and prices without speaking to anyone.
Now, talking with a company or agent is still a good idea (and suggested). However, starting your research journey online is preferable (and very effective) for most people.
Here are the essential data points you need to identify:
- Name of the insurer.
- Type of policy (term vs whole life).
- Quotes for various amounts of coverage you’re interested in.
- Does the price change at any point? If so, when will the prices increase, and what will they be at each increase?
- Does the coverage decrease at any point?
- Will the policy terminate at any age? If so, when?
- Is there a waiting period?
- To qualify, do you need to answer health questions? (If so, you’ll need to speak with an agent to know if you’ll qualify or not.)
- Are there any optional riders available? If so, which ones and what is the associated cost?
- What are the various options to formally apply (phone, email, paper, etc)?
- What are the various payment options?
We highly recommend that you pinpoint 5-10 different companies. This will all
The goal is to gather as much of that information as possible from each company. It’s likely you’ll be unable to answer all those questions by researching purely online. Presumably, you’ll need to speak with someone to get full clarity on all these topics.
Step 3) Choose a company
Compare and contrast all the options you found and choose whichever one you feel best meets your needs and budget.
Ideally, you should choose a policy that has no waiting period; that way, you’re fully covered the day you make your first payment. That’s true even if a policy with no waiting period happens to cost a little more than one with a waiting period.
Step 4) Formally apply & wait for an underwriting decision
The next step is to submit a formal application so the insurance company can determine if you’re approved or declined. If you’re applying for a guaranteed issue final expense policy (which has no health questions), you’ll be approved instantly.
However, if you’re applying for a burial policy with no waiting period, the company will evaluate your answers to the health questions and your medical history before approving or declining your application. In most cases, they will decide within 15 minutes or a few days at the top end.
Step 5) Receive the policy
Once approved, the insurance company will mail you the policy. Some will even email it to you as well or make it available online. Be sure to keep it somewhere safe and notify your beneficiaries so they know which company to call to file a death claim one day.
Step 6) Coverage activation
The final step in the process is to make the coverage effective, which depends on when you make the first payment. In nearly every case, you will specify the effective date during the application process, so the insurance company knows when to begin billing.
However, some companies will allow you to define the start date after you’ve been approved. You’ll usually have the option to start the policy immediately upon approval or any date within 30 days of the application date.
Be mindful of the fact that in legal terms, the “effective date” of any insurance policy is its birthday, and it’s the day all the terms and conditions (whatever they are) begin.
That means if you have a policy with a waiting period, the effective date is when the two-year countdown begins. On the flip side, if you’re approved for an immediate coverage plan, the effective date is when you’re actually covered (not the date of approval).
How To Buy Burial Insurance For Someone Else
It’s possible to buy burial insurance for a parent, grandparent, or other family member. Truthfully, it follows the same basic process as buying coverage for yourself, except for one minor difference.
The only variation in the process is that you’ll need to involve the other person during the application process. They must answer the health questions (if there are any) and sign the application.
Even if you have power of attorney over them, you are not allowed to answer the questions or sign the application for them.
That said, if you want to buy life insurance for another person and they will not participate in the process, there is no way to insure them. Rather, a prepaid burial plan is your best option for end-of-life planning.
This Is What You Must Do After You Buy A Final Expense Policy To Protect Yourself
After you buy any type of life insurance, it’s critically important that you thoroughly review it. This will prevent you from falling victim to a final expense insurance scam. Or it may just make you aware of a policy provision you were unaware of.
When you review the policy, here are the critical details you need to verify:
- Will the premium ever change?
- Does the policy expire at any age?
- Can the coverage decrease at any point?
- Does the coverage fully cover you immediately, or is there a partial or full waiting period?
If there are any issues, the free look provision gives you the right to refuse the policy and receive a refund if any premiums have been paid.
Frequently Asked Questions
Many insurers allow you to buy final expense insurance online, such as TruStage, Colonial Penn, and AARP. Be mindful that most policies you can buy online are guaranteed acceptance life insurance policies, which have a 2-year waiting period.
If your objective is to cover end-of-life expenses, a whole life burial insurance policy is ideal because it lasts forever. Nobody knows when they will die, which is why having a permanent policy makes the most sense. The primary risk of a term life final expense policy is that if you outlive the policy (which people do), you won’t have coverage to pay for your final expenses.
Burial insurance policies don’t require a medical exam. At most, you’ll only have to answer health questions. Some policies have no health questions because approval is guaranteed (there will be a two-year waiting period).
Once a death claim for a final expense policy is approved, most insurers pay out the money to the beneficiaries within 48 hours. However, if the insured should die within the first two years, the insurance company will investigate the claim before paying the money. In short, they’ll order medical records to ensure the client accurately answered the health questions when they originally applied. If the insurer discovers that the client did not rightfully qualify, they will not pay the death claim. Instead, they would refund all premiums paid. However, if they confirm that the client did answer correctly, they will pay the full claim. The investigation process can take weeks or months depending on how quickly the insurance company gets the client’s medical records.
- Nationally licensed life insurance agent with over 16 years of experience.
- Personal annual production that puts him in the top .001% out of all life insurance agents in the nation.
Anthony Martin is a nationally licensed insurance expert with over 16 years of experience and has personally served over 10,000 clients with their life insurance needs. He frequently authors entrepreneurial and life insurance content for Forbes, Inc.com, Newsweek, Kiplinger, and Entreprenuer.com. Anthony has been consulted as an expert life insurance source for dozens of high-profile websites such as Forbes, Bankrate, Reuters, Fox Business, CNBC, Investopedia, Insurance.com, Yahoo Finance, and many more.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
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free look provision. https://www.investopedia.com/terms/f/free-look-period.asp
