What is Burial Insurance Anyway

Thinking about death is not a cheery prospect, but it something that must be thought about; this is why it pays to have burial insurance. This type of policy, which you may see advertized as funeral or preneed insurance, will provide a cash lump sum in the event of your death. This kind of policy should not be confused with a burial protection policy, which covers funeral expenses only.

You my understandably think that there is relatively little cost involved in a funeral but surprisingly, they can cost a considerable amount of money. Indeed, it is common for the final expense to be in the region of $10,000. Not only are there the casket and the hearse to consider, there is the funeral director’s fees and outstanding medical bills to be settled. If you take out a burial insurance policy the funds will be available to make sure that all final expense is taken care of when a loved one passes away.

These kinds of policies are usually only available to people in the age range of 50 to 80 and you will find that there are two types of burial insurance to choose from. These options are called simplified and guaranteed burial insurance policies. Firstly, the guaranteed policy is designed for those people who are already considered to be of ill health; these people can sometimes find it difficult to get a simplified policy. The premium that has to be paid regularly is generally a minimal amount but some insurers may stipulate that there is a waiting period before any payout will be considered. If you are unfortunate to pass away before the end of this specified timescale, the premiums you have paid will be returned. If you pass on after this timescale has ended, then the full benefit will be released.

The second option, a simplified policy, is available for those people who are considered to be in good health and want to make funeral arrangements whilst they are still able to do so. Premiums will be paid in pretty much the same way as a guaranteed policy; you may find that the premium is slightly less due to the longer life expectancy. Whatever happens after the policy is taken out, the funds will be released upon your death.

Applying to an insurer for burial insurance is a fairly straightforward process with simple and quick forms to fill out. The insurer may also wish to conduct a telephone interview prior to the application being approved. Many insurers try to limit the amount of medically based questions they ask but they may ask for the stipulated waiting period mentioned above.

In the unfortunate scenario of you dying, the burial insurance policy will release funds to your spouse or to any children you may have. If you have stipulated that the payment be made to you children, it may be worth considering placing the policy in trust; this is because there may be issues that arise in relation to tax. It is possible to take out a joint burial insurance policy for you and your partner. It should be noted that with this option the policy will only payout once for the first death; no other payment will be made when the second person passes on.

The premium that you pay for a burial insurance policy generally tends to stay at a specified amount. One of the great features of these policies is that the insurers state that the death benefit you receive will not depreciate during the time the policy is active. A policy cannot be terminated unless the insurer detects fraud or premiums have not been paid.

Your financial advisor will be able to give you all the guidance you need to take out a burial insurance policy. If you prefer, you can contact many insurers who deal with helping with the final expense involved in death via the internet.