Posts Tagged ‘burial expense insurance’

Funeral and Burial Expense Insurance

Friday, February 17th, 2012

Although we are uncomfortable thinking about death, especially our own death, planning our funeral expenses in advance is the kindest and most thoughtful action we can take for our loved ones. Most insurance carriers offer funeral and burial expense insurance as a type of basic life insurance.

Just as the name implies, the main purpose of burial insurance is to cover the funeral costs, final expenses, as well as pay off specific obligations or debts.  Other terms that are commonly used to describe burial insurance are funeral insurance, final expense insurance, pre-need insurance and end-of-life plan insurance.

Burial insurance is generally associated with a permanent type of insurance policy (versus term insurance), and the most common permanent policy used is called whole life insurance. Most whole life policies which are purchased to cover funeral expenses range from $5,000 to $25,000.

Although burial insurance is very similar to life insurance, the most common strategy is to own both types of insurance policies.  This way the funeral expenses can be separated from the life insurance proceeds, making your last wishes much more straightforward as to how you wanted the life insurance proceeds to help fund or replace.

The proceeds of a burial insurance policy are a fixed and guaranteed amount. Since these monies remain constant throughout the life of the policy, you always know exactly how much is going to be there in your loved ones time of need. So once you pay your premium, there’s no need to worry from then on, because both the premium price and the payoff amount are fixed for the life of the policy.

The cost of funerals and burials

The National Funeral Directors Association indicates the average cost of a funeral exceeds $6,700 not including medical and legal expenses. However, depending on the type of casket, headstone, and cemetery plot purchased, these expenses can be considerably higher.

According to the American Association of Retired Persons (AARP), funerals and burials are among the most expensive purchases that older Americans make. AARP estimates that the average cost for an adult funeral ranges from $5,000 to $10,000. About one-third of that goes to the cost of the casket, alone.

In addition, an in-ground burial can add another $2,400 to the total cost of final expenses.

Professional services that need to be paid for include:

  • Cemetery plot
  • Casket
  • Headstone
  • Funeral service
  • Visitation/Viewing
  • Minister
  • Hearse

Additional costs are often associated with the death of an individual:

  • Legal fees
  • Doctor bills
  • Pay off debts like mortgage, car, credit cards
  • Legal costs at death (probate, taxes, etc.)

Sources used:

http://www.nj.gov/oag/ca/brief/preneed.pdf

http://insurance.oregon.gov/publications/consumer/3932.pdf

http://pccfa.com/commonquestionsFH.php

 

 

Why Do You Need Burial Insurance?

Wednesday, June 2nd, 2010

Many of us consider it a very important thing to make sure that our families are covered in the event that something should happen to us. This can come in a variety of different ways, and insurance is often something that needs to be considered. Something that should not be overlooked, however, is burial insurance which is, many times, referred to as funeral expense insurance. When this insurance is set up properly, it will cover any funeral expenses that are necessary, along with the cost of burying or cremating you.

One of the main reasons why you would consider burial insurance in the first place is in order to relieve your family of any financial responsibility that would take place in the event of your death. It is important for you to consider this carefully and to make sure that you are covered to the extent that your family would not have to deal with anything during this difficult time. Since there are a number of different levels of burial insurance that are available, it is important for you to make sure that you talk to your insurance agent about the different options that are open to you.

Something that often is a sticking point for many individuals whenever they are considering funeral expense insurance is that they may have some coverage that is available through their work. Although this may be the case, it is also important to make sure that you are covered on your own. After all, what would happen if the company that you’re working for went out of business or perhaps no longer needed your services? We live in a day and age that these problems are occurring on an increasing level. It would be a better idea for you to get burial insurance now in order to make sure that you are covered in the event of the unthinkable happening.

One final reason why you would want to consider burial insurance goes beyond thinking about the financial obligation that would be necessary if it was not available. Funeral expense insurance also releases much of the stress off of your family that would take place if they needed to arrange many of these things during this difficult time. If you think about it in that way, getting adequate burial insurance is really more of an obligation and a way to show your family that you truly care about them.

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