If you have already decided you want the protection of burial insurance, please fill out the quote form. Doing so will allow you to see prices from multiple highly rated burial insurance companies in your state. We know everyone wants the most affordable final expense plan possible. Choice Mutual compares rates from dozens of the top burial insurance companies to find you the lowest monthly price.
We get asked all the time, “Just what is burial insurance?”. If this is a question that has been on your mind, you are in luck. This article will break down exactly what burial insurance is. Additionally, we tell you very clearly what it’s not. If you are a visual person, there is an easy to read infographic for your convenience.
Just What Is Burial Insurance?
First and foremost, burial policies for seniors is life insurance. To be specific, its whole life insurance. It is meant to cover burial and other funeral expenses. It pays cash, tax free, directly to your beneficiary. In the end, this cash payment will provide the necessary funds to pay for your funeral. Your family will not have to come out of their own pockets to do so. Another key point, if there is any money left over, it stays in your family.
From time to time, you will hear burial insurance go by the names “final expense” or “funeral insurance”. In fact, all three labels mean the same thing. It’s similar to the words “attorney” and “lawyer”. Again, all three names are simply marketing terms. At the end of the day, it’s all life insurance (which isn’t bad).
Below you will see a comprehensive list detailing how burial insurance plans are unique. Without question, these plans are much different than most traditional life insurance policies.
burial insurance plans are extremely simple and easy to understand
For starters, burial insurance is ALWAYS a whole life policy. Because they are whole life, they never expire. Additionally, the monthly price can’t increase, and the benefits can’t decrease. In fact, there is no fine print that you need to be leery of.
Final expense has incredibly lax underwriting
The most unique element to burial insurance is the very liberal underwriting. Quite frankly, they will accept you even with some serious health issues. You might think that is crazy on their behalf. Honestly, it is crazy, but there is a reason for it.
These policies are meant for seniors who are in need of a product to cover their funeral costs. With this in mind, the insurance companies realize you naturally develop health issues with age. Given that, they expect and price for a wide variety of health problems.
Traditional life insurance products have far stricter underwriting. Consequently, this makes traditional life insurance inaccessible to most seniors. Years ago insurance companies realized that seniors needed coverage to pay for their funeral expenses. Knowing seniors usually deal with some health issues, they had to design a product to work around that. This is why burial insurance was originally created.
Burial insurance offers you very low face amounts
Another key differentiation is the very low face amount option. Currently, the average face amount of a burial policy is $10,000 in protection. In contrast, most traditional life insurance has a face amount MINIMUM of $20,000-$50,000. Burial insurance policies have face amounts as low as $1,000. At the end of the day, if you only need enough coverage to ensure your funeral expenses are paid for, traditional life insurance won’t suffice. Thankfully, final expense can service this need perfectly.
There are some people who prefer cremation instead of a traditional burial. If that’s you, then you only need a few thousand dollars in coverage. A few thousand dollars is more than enough to pay for the cremation service. Only through a final expense policy can you get a face amount of $1,000-$5,000. Traditional life insurance will not offer face amounts anywhere near that small. In this case, you can still get the peace of mind you are seeking with a final expense policy.
final expense has a “simplified issue” application process
In a nutshell, a simplified issue application process is one where you do NOT have to take a physical or medical exam. All around, qualifying for final expense is incredibly simple and fast. In most cases, approval is nearly instant. Traditional life insurance can take weeks or months before the insurance company comes back with a decision. This is not the case with funeral insurance.
These days, most burial insurance carriers have a point of sale interview process. This interview is completed at time of the application. Basically, you and your agent will both complete a short phone interview with the insurance company. While on the call, you formally answer their health questions. Additionally, the insurance company will electronically verify your health through a prescription data base. By the end of the call, they typically render a final decision. Most of the time, these point of sale interviews take less than 15 minutes. Contrast this to waiting weeks or months with traditional life insurance.
What Is Burial Insurance With An Immediate Benefit?
This is another question we are frequently asked. An immediate benefit simply means there is no waiting period. To illustrate, an immediate benefit pays the full benefit amount if you die two days after you got the policy. Of course, this is assuming the applicant was honest about their health when they applied. You may or may not know this already. If you pass away during the first two years of ANY life insurance policy, EVERY insurance company will investigate before they pay the claim.
With an immediate benefit burial insurance plan, you could have the coverage for literally one day, and the company will pay the claim (assuming they find you were honest). For some reason, a ton of people seem to be under the impression that all final expense policies pay no benefits during the first two years. Thankfully, nothing could be further from the truth. Most our applicants have no waiting period whatsoever. There are many companies that push policies where everyone has a waiting period. Colonial Penn does this frequently. They seem to always force people into their guaranteed issue burial insurance which has a two year waiting period.
final expense and the contestability period
The department of insurance calls this the contestability period. Insurance law is very clear on this issue. The contestability period gives an insurance company the right to investigate a claim if and only if the insured passes away during first two years of the policy. Moreover, this clause applies to ALL life insurance companies, and is applicable to all types of life insurance.
An insurance company’s goal with their investigation is purely to ensure the applicant was not dishonest with their answers. If the insurance company does not find something in the insured’s medical records that would contradict their application answers, the insurer has to pay the claim. In fact, an insurer could lose their license to conduct insurance if they were found to violate this law. After any policy has been in force for two years, no insurance company can investigate a claim. With this in mind, they are legally obligated to promptly pay all claims that are two years or older.
For some reason, this dialogue is alarming to some people. Some folks feel as if insurance companies will look for or create a reason to deny a claim. First of all, if ANY insurance company denies a claim, they pay you back all premiums you ever paid. This means they literally have no chance to make money on a denied claim. In fact, rescinded policies actually cost the insurer a lot of money. It will easily cost them hundreds if not thousands of dollars when this happens. In any event, it’s extremely common for insurance companies to terminate agents and agencies because of denied claims.
Do not let this contestability information worry you. We tell you this up front so you can be an informed consumer. You have nothing to fear as long as you are honest and forward when you answer the health questions. As long you and your agent are honest, you are good to go.
An independent agency is another key way to getting a burial insurance claim paid promptly
Only an independent agency can freely shop all the different burial insurance companies for you. Furthermore, you being matched with an insurer that accepts your health conditions with open arms is the surest way to get the best price. However, it’s also the best way to feel confident claim will get paid.
Think about it. If they willingly accept your health conditions, they have no basis to deny your claim. Without question, working with an experienced independent agency is critical in so many ways. We hope you do not take this lightly. It’s not just about getting you the lowest payment. Your burial insurance plan needs to be suitable for your health conditions. Only an independent agency can find which insurer best accepts all your health issues.
We conduct our business the way we do for these reasons. If you have questions about any of this, give us a call. You can also let us call you. To do so, fill out the quote form.
Insider tip: Whenever you take out life insurance, the insurance company sends you a copy of the application. This will show you how your health questions were answered. You should always read the health questions to verify your answers. We know a thing or two about how “some” insurance agents operate. Let’s just say that some agents are less than honest to earn a buck. A person without morals is capable of many bad things. Always read your application AND your policy. If ANYTHING is dishonest or inaccurate, contact the insurance company immediately. The last thing you want is a policy that you shouldn’t have because an agent intentionally or accidentally marked answers incorrectly.
Guaranteed issue burial insurance
Guaranteed issue burial insurance is incredibly unique. Simply put, everyone is guaranteed to be accepted. With these plans, the insurer literally just issues the policy without asking you a single question about your health. In addition, they also do not check your medical history. Literally everyone, regardless of their health, qualifies. Guaranteed issue plans are still whole life. For this reason, they won’t expire or change.
There are two downsides to these types of final expense policies. First, they always come with at least a two year waiting period. If you pass away during this time, they will refund ALL the premiums you paid, plus an additional 5-15%. Thankfully, there is no risk of losing any money. This waiting period is necessary for the insurer because these policies attract people in really poor health.
The other drawback to guaranteed issue is the higher monthly premiums. The insurance companies are going to have a lot more people who are very sick. Consequently, they must charge more to be able to cover the increased amount of claims.
For some people with certain health issues, guaranteed issue may be their only option. If so, Gerber Life is who we recommend. We feel they have the best guaranteed issue burial insurance plan. Speak with an experienced agent to advise you on this. Fill out the quote form or give us a call. We can easily tell you if guaranteed issue is your best option. For most people, it’s not.
Dispelling a common myth about burial insurance
For some reason, most people seem to think burial insurance plans all come with a two year waiting period. Most of the articles online about burial insurance make this false claim. The truth is that the overwhelming majority of people can and do qualify for an immediate benefit. At Choice Mutual, our success rate is 90%. This means that 9 out 10 of our customers get a burial insurance plan that has no waiting period.
As stated earlier, these insurance companies realize that people naturally develop health issues with age. Most of these plans are built to accept the many common health issues seniors encounter. Every insurer accepts, rates, or declines people for different reasons. For example, Company A might gladly accept a heart attack a year ago. On the other hand, Company B may decline you or charge you more because of it. No matter what health issues you deal with, chances are there is a specific company accepts your entire health profile. The only question is which one is it? This is where Choice Mutual comes in. We work with all the top rated burial insurance companies. We will find which one is the best fit for you.
Honestly, being an independent agency is the only reason we can achieve these results. Without access to numerous burial insurance companies, we could never do this. If we didn’t, our customers would be defaulted into inferior burial insurance plans. Thankfully, we are independent. It’s no sweat for us to find which company best accepts your health conditions.
What burial insurance is not
Here is something really important to remember about burial insurance. It is never term life insurance. In short, term life insurance is a form of temporary life insurance. It expires at a certain age or a specific date.
Do you know the difference between whole life insurance and term life insurance? It’s incredibly important you know how they are different. Below is a basic breakdown of how they are different. This knowledge will keep you from being swindled. If you want a temporary life insurance plan as a means to pay your funeral expenses, you can certainly take that risk. We just encourage you to ask yourself the following:
- Which type of plan would you prefer to rely on to cover your funeral expenses?
- How will you pay for your funeral expenses once the term life plan is expired?
- If you outlive your policy (which a majority of people do), how will your family pay for your funeral?
- How will the financial burden of your funeral expenses impact them?
Believe it or not, there are companies that will try to pawn off their term life insurance as burial insurance. Miraculously, they always seem to forget to mention that they are selling you a policy that expires once you reach a certain age. Do not allow yourself to be swindled by their clever marketing tricks. AARP and Globe Life are unquestionably the biggest culprits of this practice. How would you feel if you bought a plan that you thought would last forever, but it one day expired? We have encountered many folks who endured this very scenario. It’s incredibly sad to talk to someone in their mid to late 70’s who recently lost their coverage because it expired. If only they had known ahead of time.
The difference between term and whole life insurance
If you don’t know the difference between term and whole life, we will make this incredibly simple to understand. To be totally up front, term life insurance does cost less per month. Given that it expires, we would hope so. Whole life insurance never expires. It should cost more.
Term Life Insurance
- Expires at a certain age, or after a set number of years
- Monthly premiums often increase with age (some stay level)
- Stricter underwriting making it harder to qualify
- No guaranteed issue available
Whole Life Insurance
- Never expires
- Monthly premiums cannot increase ever
- Greatly relaxed underwriting that accepts many different health issues
- Guaranteed issue available if necessary
Burial insurance solves an expensive problem
You, like most people, probably don’t want to talk about funeral planning. It’s a subject that is regularly avoided at all costs. Who really wants to talk about their own death? Understandably, not many do. However, it’s a natural part of life, and it must be dealt with. In case you are wondering, no your kids do not want to talk to you about this. Our experience shows that kids will avoid this issue indefinitely.
Burial and other funeral expenses have risen dramatically in the last 20 years. There are many different elements to a funeral. Here are just some of the items in a funeral:
- Opening and closing of a vault
- The preparation of the body
- The service
- Travel for friends and family
When you total this all up, it gets quite expensive. A bill this large left to your loved ones will very likely cause a substantial financial burden. Put simply, a burial insurance plan protects you from ever having to leave your family with the debt of unpaid funeral expenses. It’s the ultimate peace of mind.
How much burial insurance should you get?
It’s important to note that selecting the right amount of final expense coverage is key. You need to determine what kind of funeral service you prefer. Do you want to have a traditional burial? Do you want to be cremated? Is your sole objective to protect your family from having to pay for your funeral expenses? The answer to these questions will help you determine how much coverage you need. In the end, making sure you have enough coverage is central to accomplishing your objective.
Another important thing to consider is inflation. There is no industry that is immune to it. Unfortunately, that includes end-of-life services. A professional agent who is both knowledgeable and experienced should be able to assist you. They can help you estimate the future cost of your funeral. The average cost of a funeral in 2012 was $8343. Presently, a cremation service typically costs between $1500-$4000 depending on what you want to have done. These figures will absolutely rise as time goes on. Make sure you take inflation into account when you decide how much coverage to buy. However, just make sure it fits comfortably in your budget. If you can’t afford all the coverage you would like, that’s OK. Buy what you can afford because it’s way better than nothing.
How to get the best burial insurance rates
Are you are looking for the peace of mind knowing you will never leave your family with the crushing burden of unpaid funeral expenses? If so, a final expense policy is your saving grace. The only question now is, how do you get the best plan for you. Thankfully, the answer is simple.
First of all, you must work with an independent agency. As previously stated, this the most important step. Only an independent agency (like us) can freely shop all the different burial insurance companies on the market. Then it’s just a matter of identifying which carrier will offer you the best deal.
Secondly, you must work with an agency that is highly experienced in the final expense business. With so many insurance companies out there, there are a lot to choose from. Only through experience can an agency be ultra familiar with all their underwriting practices. Again, every insurer accepts and declines people for different health reasons. Knowing which carrier best accepts all your health issues, is key to making sure you get immediate protection and a low price. In fact, check out this article that details the best buriel insurance companies. Underwriting is a huge part of why we selected who we did.
We are obviously biased in this area, and we are OK with that. Choice Mutual is all of the above and then some. We are truly committed to doing what’s best for you. If you choose not work with us, make sure you an agency that fits the criteria we mentioned.
If you still have questions about burial insurance fill out the quote form or give us a call. We are here to help. One of our licensed agents will answer all your questions. If you decide you want to be protected, they will help you find the most affordable policy possible.