Burial Life Insurance offers a cheap alternative to people who may not have the financial means to afford a more expensive policy for their family, but still, want to remove some of the financial burdens of their death from their family.
One of the most difficult components of the financial planning process is trying to not only anticipate when future events will take place—such as the death of a loved one—but also trying to anticipate the financial burdens associated with such events.
Though death expenses such as burials, urns or funeral are typically something that nobody wants to think about, their importance is not something that can be easily overstated.
It is also great for people who have few financial dependents, or people who are in poor or terminal health, who likely would not be able to find affordable rates for many other types of insurance policies.
What is Burial Insurance?
Burial insurance is a type of permanent life insurance that pays for burial expenses. This includes but is not limited to:
Burial Insurance helps to cover these expenses that people often do not consider. While you may be asking yourself, “Do I need burial insurance?”, ponder the fact that the average burial expenses in America are anywhere between $7,000 – $12,000.
While life insurance is something that you would typically purchase for yourself with your children or spouse as your beneficiaries, burial insurance is something that can often be purchased for your parents as well.
What Are the Differences Between Standard Life Insurance and Burial Insurance?
As stated, the life insurance industry is one that is incredibly dynamic and constantly changing over time.
Because life insurance providers recognize that specialized insurance options are often among the most useful assets for consumers, they have been continually trying to expand their range of offerings ever since the industry first came into global prominence in the 1800s.
For example, if you have any young children or a spouse with a limited income, then you may be looking for ways to provide them with financial security in the event of your death. With a standard life insurance policy, you will be asked to pay a small amount of money each month in exchange for the promise that your family will receive a sizable “death benefit” following your death.
Most standard life insurance policies can be categorized as “term” or “permanent” policies.
What is the Difference Between Term Life Insurance and Whole Life Insurance?
Regardless of whether you purchase a term or permanent life insurance policy, it is important to note that the primary purpose of these policies is to replace your income. In fact, for some life insurance agents, this purpose is so fundamentally clear that they will often refer to a life insurance policy as “income insurance.”
Though burial insurance is something that broadly falls into the category of a “life insurance policy”, the policy itself is still something that remains quite unique.
What are the Benefits of a Burial Insurance Policy?
The benefits of a burial insurance policy will be paid to the individual who is responsible for paying the monthly premiums on the policy or their designated beneficiaries.
You may purchase a burial insurance policy for yourself in which case the benefits of the policy might be designated to your children.
You may also purchase a burial insurance policy on your parents in which case you will pay the monthly premiums and will then be expected to use the benefits to cover the costs of their burial or their funeral.
How Much Does Burial Insurance Cost?
The insurance industry is one that is remarkably complicated—there is no universal “cost” of burial insurance that can be easily applied to all people who are hoping to purchase it (whether for themselves or for others).
The process where the insurance providers determine the cost of a given policy is known as underwriting. Naturally, the underwriting process will typically involve several moving pieces and can sometimes take a considerable amount of time to be completed.
Here are a few sample burial insurance rates (monthly) for men and women who are 50-years-old and are non-smokers:
When determining the average life expectancy of a given individual, the first thing the underwriting team will look at is your age. If all else is equal, younger people will be the ones who are expected to pay the least.
Other relevant variables will include things such as your general health, your gender, your status as a smoker, and numerous others. Anything that is statistically correlated with a decreased life expectancy will raise the rates of a burial insurance policy.
Is it Cheaper to Buy Burial Insurance Instead of Life Insurance?
Burial insurance is something that is notably less expensive than nearly all permanent life insurance policies.
However, it is important to note that is mostly due to the fact that the benefits of a burial insurance policy will typically be much less than that of a standard life insurance policy.
Depending upon the age at which burial insurance is purchased, the monthly cost of a policy is likely much more comparable to that of a limited term life insurance policy.
What Types of Burial Insurance are There?
Depending on your financial needs after the event of your death, and your health and financial situation while you are still alive, there are a number of burial insurance options that may be best for you.
Pre-Need Funeral Insurance
Pre-need Funeral Insurance is insurance that is purchased through funeral homes, or an insurance agent working with one.
These policies generally cover the cost of funeral services, an urn, and other funeral expenses. One of the advantages of this type of burial insurance is that claims are paid immediately.
One disadvantage is that there are other expenses involved with death such as tombstones, cremation, et cetera that pre-need funeral insurance does not cover, but burial insurance does.
Who is Burial Insurance the Right Option For?
Burial insurance is generally considered to be ideal for any individual who will be responsible for paying for the cost of a burial, urn, or funeral of another person or themselves.
If you hope to relieve your family of the financial burden associated with your death, then purchasing a burial insurance policy may be the right decision for you.
If you will be responsible for paying for the burial of your parents—or anyone else in your life who is an “insurable interest”—then you may want to consider purchasing a burial insurance policy on them as well.
It is often much easier to pay just a few dollars each month for coverage instead of trying to save all on your own.
What is the Best Age to Buy Burial Insurance for the Best Rates?
The cost of a burial insurance policy is largely determined by how long the relevant party is expected to live. Naturally, this means that if you are hoping to get the best monthly rates, you should purchase a burial insurance policy sooner, rather than later.
As time goes on, the monthly cost of a policy will continue to increase. The rate at which these costs change will vary significantly between any two burial insurance providers.
In order to make sure you are getting the best rate that you possibly can, it is important to work with an independent agency that will allow you to compare multiple different options at once.
Does Health Affect Rates on Burial Insurance?
As is the case with age, the cost of a burial insurance policy will also be significantly influenced by health.
For example, if there is a health concern that causes the underwriting team to believe that the person a policy is being purchased for will not have much longer to live, then the monthly cost of a policy will significantly increase.
5 Companies with the Best Burial Insurance Rates
Whether you are purchasing a burial insurance policy for yourself or anyone else, you can likely be relieved by the fact that you will have many high-quality options to choose from.
Because there is no burial insurance policy that will always be the right decision for a given individual, it is very important to consider multiple different options before making any lasting commitments.
Our List of Top 5 Burial Insurance Companies:
|Company||A.M. Best Rating||Customer Reviews|
|Assurity||A-||3.9 / 5|
|Gerber||A||4.4 / 5|
|Mutual of Omaha||A-||4.0 / 5|
|Phoenix||B||3.8 / 5|
|Transamerica||A||4.0 / 5|
Assurity offers a graded pricing model available for anyone under 80 years old. Depending on the type of death benefit you are applying for, their Lifescape policy offers up to $50,000.
3. Mutual of Omaha
Mutual of Omaha has an excellent “living promise” policy that applies to individuals between 45 and 85. The death benefit is accelerated and is offered for up to $40,000.
Transamerica has a final expense policy that can be purchased by anyone under 85 years old. The associated death benefit ranges from $1,000 to $50,000.
These are just a few of the best burial insurance options that are currently available on the open market. The insurance provider that will be best for you and your family will depend on your current financial situation, the life expectancy of the relevant party, and your anticipated end-of-life financial needs.
How Did We Decide on Our Best Burial Insurance Companies?
We based our rankings on a number of factors that we find to be the most important when picking the right life insurance companies for you:
At the intersection of these 4 factors is where the best burial insurance policy will be found for you.
You do not want to select a provider that does not have a strong financial and claims history because you want to be sure your family is taken care of in the event of your death.
You also want to make sure that the company you select has affordable burial insurance rates, but good customer reviews as well. Better to pay a bit higher for a rate that is not the absolute lowest, but gets good customer service from a company with good burial insurance customer reviews.
Finding the Best Burial Insurance Rates for You
As always, we recommend that when searching for the best burial life insurance companies and rates, you work with an independent life insurance agent.
On top of that, we can help you assess the financial needs of your loved ones in the event of your death, and also discuss your budget in order to craft a policy that is just right for your family.
Life insurance is a big investment, and it is something you want your family members to be able to count on when you are no longer there. For this reason, we always recommend speaking with a professional in order to find the best life insurance rates.
Speak with a professional today, and find the best burial insurance rates for you and your family.