Archive for the ‘life insurance policy’ Category

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:



Taking Care of Your Family with Burial Insurance

Monday, June 7th, 2010

None of us like to consider the day of our death, but it is something that we should keep in mind, even if just for the benefit of our family. The unfortunate fact of the matter is, all of us are eventually going to die and we need to make sure that we do not leave our family in a situation that would prove to be additionally stressful on top of the fact that they are already dealing with the loss of a loved one. One of the best ways for you to do this is to make sure that you are covered through funeral expense insurance.

Funeral expense insurance, often referred to as burial insurance is really just a type of life insurance policy that is smaller in nature than many of the other life insurance policies that are available. Generally speaking, it is available to help to pay for any funeral expenses that may be incurred, along with the cost of burying us. Believe it or not, this can run into many thousands of dollars and it can put a real financial burden on our loved ones, if we happen to die without any burial insurance in place.

Of course, burial insurance, as with many other types of insurance policies does not come in a one size fits all package. As a matter of fact, there are a number of different options that are available to you and it would make sense to speak to your insurance agent in advance in order to discuss all of the options that are available. Since most of them work as a prepayment for our funeral expenses, we would want to choose the one that makes the most sense, along with making sure that we are able to afford the premiums that we will be paying.

I would like to caution you against putting too much weight in any burial insurance that may be available through your employer. Although they may pay for part of the funeral expenses, our family may still be left in the lurch to a certain extent. If your employer does offer this, make sure that you speak to your insurance agent about supplementing the insurance policy in a way that will be most beneficial to your family. If you happen to end up with additional insurance money coming, it could help to balance out any additional financial burden that may be placed on them during this difficult time.

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