It’s expensive to die! That’s a morbid thought, but it’s true.
When you think of rising costs in society, you think of healthcare and maybe education, don’t you? Nobody realizes how high the average funeral cost today.
The cost of dying has risen faster than any other segment of our economy over the last 30 years. Caskets have risen 230% from 1986 to 2017.
All other goods have only risen by 95% in those 30 years. The average cost of a funeral in 2014 was just over $7,000. Today the number is closer to $10,000.
Those expenses are more than casket and funeral arrangements. The funeral director costs money. So does the burial plot, the headstone, and the flowers. Throw in the flowers and the bulletins also. Oh, don’t forget, the newspaper is going to charge you to post an obituary.
Nothing is cheap!
Here’s a quick breakdown of all the costs to be expected with a funeral.
Average Cost of Burial – Why 70 Year Olds Need Burial Insurance
|Funeral Directors Fee||$1,500|
|Embalming & Preparation||$600|
|Ceremony & Viewing||$1,000|
|Miscellaneous (Hearse, Death Certificates, Obituary, etc…)||$600|
|Total Average Funeral Cost||$11,000|
Is Burial Insurance the Right Option?
Many people are choosing cremation as an option but that saves pennies compared to the overall costs. Cremation is not an option for many because of religious reason.
Once you add all the end of life medical expenses the costs come closer to $20,000.
How many American families don’t have an extra $10,000 to pay for their loved one’s funeral? According to recent government statistics, the average family has less than $5,000 in a financial or savings account.
You probably carried term insurance when you had a young spouse and children. Eventually, term runs out and there is nothing to replace it with except family savings.
However, as we live longer, retirement costs tend to eat away at any nest egg many people have accumulated. This deficit leaves little for funeral costs if there isn’t serious planning.
Burial Insurance can fill that financial gap.
Why is Burial Insurance Important?
Burial insurance is life insurance designed to cover final expenses. Some companies or agents will call it by other names such as funeral insurance, end of life coverage, or final expense insurance.
If you are worried about how the proceeds will be used, burial policies have a unique feature. You can assign the funeral director as the beneficiary of the policy.
By assigning the funeral home as the beneficiary, your family does not have to pay out of pocket only to be reimbursed by the insurance company months later.
With a burial policy in place, the funeral director will begin preparations without immediate payment. They understand that funds are guaranteed by the insurance company.
Types of Policies for 70 Year Olds
There are two basic types of burial policies: guaranteed issue and level coverage
Guaranteed Issue policies
By the time most people turn 70 there will be pre-existing medical issues. For most insurance policies this is a problem — not for burial insurance. A guaranteed issue policy can secure coverage regardless of medical issues.
No medical questions are asked. No medical exam is needed. You will not be turned down for a guaranteed issue policy. If you have a history of medical issues, this policy is perfect for your needs.
Guaranteed issue policies are structured with a graded benefit. Graded benefit is a term meaning partial benefits are available during the first two years of the policy. After the 2 year “waiting” period the full death benefit will be available. During the first two years, the death benefit will be a percentage of coverage plus any premiums paid.
Level Benefit policies
Level Benefit policies are not guaranteed issue policies. They provide the full death benefit from day one of the policy. Medical questions and exams are required for this level of benefit. However, medical underwriting is not as strenuous and strict as a traditional life policy.
Burial Insurance Rates for 70 Year Olds
Let’s look at rates for burial insurance for 70 year old males and females.
Level Benefit Policy Monthly Rates
Guaranteed Issue Policy Monthly Rates
Who Needs a Burial Insurance Policy?
Here are a handful of reasons you should consider a burial policy:
Most of us don’t make it to 70 with some medical issues. If you have then you are one of the lucky ones, and other life insurance options are available to you. If you’ve had cancer or other serious medical issues, finding affordable life insurance is difficult.
There are very view health issues that would exclude you from burial insurance. There are no medical exams like there are in life insurance as well. For guaranteed issue policies you can skip the exams altogether. Level Benefit policies require an exam but they are not as stringent as traditional life.
You can be diabetic, diagnosed with COPD, or suffered from a stroke, and still be eligible for burial insurance. Cancer survivors are ideal candidates. Most life insurance policies will not cover cancer survivors. If you’ve been cancer free for more than 2 years, you qualify for burial insurance.
Caregivers of Elderly Parents
If you currently care for the finances and health of an elderly parent. Whether you care for them at home or an assisted living facility, burial insurance may be a method to protect your finances from funeral expenses. Because of caregiving costs, you or your parents may not have the funds necessary for final arrangements. Children may purchase policies on behalf of their parents and assign a funeral home as beneficiary.
Most assume life insurance is only for the young. Burial insurance is a perfect example of where life can benefit you when you reach your senior years.
The perfect candidate for burial insurance is anyone age 50-85. Perhaps you don’t have a need for a large life policy but aren’t certain your retirement funds or savings will be enough for final expenses.
Burial Insurance allows you to provide for funeral expenses without the need to buy a large, expensive life policy. Even if you are over 85, you can find coverage. The options are more limited, but there are a handful of companies that serve that segment of the population.
Term vs. Permanent vs. Burial Insurance
Like other permanent policies, some burial policies have a cash value component that will grow in value over time.
Some people may carry a mix of life insurance. They may have purchased a traditional term or permanent policy early in life, but choose to buy a burial policy later. By buying a separate burial policy they are able to designate funds more directly.
2 Tips Getting the Best Rates
1 – Avoid increasing premium policies
Many of the burial policies advertised on television have increasing premiums. Instead of being locked into a consistent monthly premium, the premiums will increase in 5 year increments.
Sometimes the coverage may decrease over time as well. Make sure you ask plenty of questions about the way the premiums work over time. Also, make sure the coverage will remain stable.
2 – Shop between a wide variety of carriers
Rates and underwriting guidelines change constantly. Companies change their appetite for various segments of the population as well as types of insurance policies.
If you only get a quote from one or two companies, you may be missing out not only on more affordable rates but better coverage. Rates and coverage are of prime importance, but it is important to understand the claims and customer service side of an insurance company as well.
This is one reason we have contracted with a wide variety of companies. It allows us to find the right product for every individual need. No two people have the same needs and budget, even though both may need insurance.
We are experts on the changing life insurance and burial insurance landscape and can help you determine the best possible product for your situation.
Fill out our quote form and see what your options are. Or go directly to one of our agents who can understand your needs and find the best possible product for you.