Determining How Much Burial Insurance Coverage You Need

Burial insurance, sometimes called funeral insurance, is a type of life insurance policy that pays a cash balance to cover the costs of an individual’s final expenses such as their funeral service, burial or cremation.

The most basic form of burial insurance is a life insurance policy with a cash value that pays out to your loved ones, who can then use it to pay any final expenses related to your death.

There are also preneed funeral insurance policies you can get through some life insurance brokers or directly through funeral homes that pay directly to the funeral home or crematory rather than to the family members.

How Is Burial Insurance Different From Life Insurance?

Burial insurance is a specific type of life insurance that is designed to cover an individual’s funeral and burial expenses. The difference lies in how much a burial policy is worth and what it is meant to be used for as well as the value of the policy. Most burial policies have a value of between $1,000 and $50,000.

Life Insurance

You can purchase regular life insurance for almost any amount and there generally isn’t a cap on how much coverage you can get. This is because it is meant to protect your family financially after you’re gone. Life insurance should provide sufficient funds to cover your lost income and your family’s needs long after you’re gone.

When you buy a typical life insurance policy, you may have to get a physical or have your doctor complete a form outlining your health, any risk factors, and other information. Your premiums will be based on a variety of factors, including age, health, how risky your job is and a multitude of other factors. You can purchase a life insurance policy at any stage in your life, but the older you are, the more expensive it will be.

Burial Insurance

Because this is a specific kind of life insurance, there are some differences between life insurance and burial insurance. The payout on a burial policy is limited, with $50,000 typically being the most a beneficiary can receive.

This is because it is supposed to be used to pay for funeral and final expenses. Although a beneficiary can use some of the funds for other, incidental expenses or to cover some bills, most of it is meant to pay for funeral needs.

How Burial Insurance Is Different From Other Life Insurance Plans:

  • The face value of the policy is lower (usually no more than $50,000)
  • It is earmarked for paying funeral arrangements and burial or cremation
  • It is generally sold to individuals between the ages of 50 and 85
  • The premiums are lower than those for a typical life insurance plan
  • The premiums never go up for the life of the policy
  • The value of the policy doesn’t decrease with age
  • There are minimal or no health questions to answer, and in most cases no medical exams required
  • Because the face value isn’t as high, it is easier to get a burial policy than a larger life insurance policy as you age.

Types Of Burial Insurance

Burial insurance policies are available as either level benefit policies or graded benefit policies. A level benefits policy pays the full death benefit immediately after the policy is approved whether you’ve had the policy for six weeks or six years.

A graded policy will pay only limited benefits for the first two years. Some graded plans will return the premiums paid plus interest for the first two years; others will pay a partial death benefit based on a percentage of the full value for the first two years.

For instance, the first year the death benefit may be 40% of the full value and the second year 75% of the full value. From the third year on, the full value would be paid. Graded benefit burial insurance is usually reserved for individuals who can’t qualify for a level benefit plan because they have serious health issues.

There are also preneed funeral insurance policies available directly through funeral homes or brokers who sell the policies for funeral homes. These differ from other burial insurance policies because they are tied directly to a specific funeral services provider. The beneficiary is not a family member, but the funeral home or crematorium providing final services for the deceased.

Preneed funeral insurance ensures that the funeral expenses are paid immediately, but the policy amount covers only what has been specifically designated in the policy. There will be no leftover funds for the family and the money can not be used for anything other than the final service, burial, and funeral expenses.

How Much Burial Insurance Do I Need?

Standard burial insurance will pay a specific amount, usually between $5,000 and $25,000, to a beneficiary who is most often a surviving relative. These policies are designed to eliminate the financial burden of a funeral, memorial, burial, cremation and other final expenses.

The cost of a funeral and burial in the United States can run anywhere between $5,000 and $50,000 or more, although the average funeral cost is currently between $7,000 and $10,000. That’s a lot of money to come up with, particularly if there are also bills from an individual’s final illness and other expenses.

If you want to ensure that your burial or final expenses insurance will be enough to cover the cost of your funeral, take the time to talk to funeral parlors in your area to determine how much it might cost for the type of burial and service you would like.

The cost will be higher in major metropolitan areas and if you desire a specific type of service, casket, burial plot, flowers or other items. The average cost of some of these items in the United States may surprise you.

The average cost of a funeral in 2017:

  • Funeral service – $500-$1,000
  • Casket – $2,300
  • Burial plot – $1,000
  • Embalming – $500-$750
  • Grave digger’s fee – $600
  • Grave marker or headstone – $1,500
  • Grave liner – $1,000
  • Funeral director’s services – $1,000
  • Publication of obituary – varies
  • Cost of flowers – varies

Talk to your family before you purchase burial insurance; discuss the final arrangements for your death and let them know how you would like it to be handled, then opt for funeral insurance that will provide enough money to cover all the expenses with a bit of a cushion for inflation and any unexpected expenses that might come up after you’ve passed away.

Most burial policies pay directly to a family beneficiary who can use the funds to pay for the funeral and other final expenses, but there are no strict guidelines stating that the funds have to be used only for the funeral expenses.

If there are outstanding medical bills or other debts left by the person who passed away, some of the funds can be used to pay these expenses. In fact, although the policy is called burial insurance, the beneficiary can use these funds in any way he or she sees fit.

What Is the Typical Death Benefit Amount On Burial Coverage?

Most insurance companies offer policies ranging from $10,000 to $50,000. There is no “typical” coverage because the costs of a funeral vary from place to place and final expenses vary depending on what kind of arrangements are made.

Take into consideration the costs in your area and how elaborate you want your funeral to be when purchasing a burial policy. If you believe you need more than $50,000 in funeral coverage, you may want to talk to a few companies to see if they can tailor a policy to your needs.

Which Burial Insurance Companies Offer The Best Policies?

There are many insurance providers who offer burial policies. To help you choose the one that’s right for you and your family’s needs, we’ve put together a list of some of the top performing providers who are known for their quality and dependability.

Before we take a deeper dive into the products each of our top companies offer, here is a quick look at the 10 Best Burial Insurance Companies:

Company A.M. Best Rating Customer Reviews
Mutual of Omaha A+ 4.2 / 5
Transamerica A+ 4.0 / 5
Baltimore Life B++ 3.9 / 5
Americo A 3.7 / 5
Sagicor A- 4.3 / 5
United Home Life A- 4.0 / 5
Amnico A 4.1 / 5
Gerber A 4.3 / 5
Foresters A+ 4.0 / 5
Assurity A- 3.9 / 5

1. Mutual of Omaha

A perennial favorite, Mutual of Omaha offers excellent burial policies for anyone ages 45 to 85. You’ll need to pass a medical background check, but most people do. This involves them having access to medical and prescription records, but they process these quickly.

We like their burial insurance because they offer a rider for accelerated death benefits. This means you can receive the full benefits early if you’re diagnosed with a terminal disease. Because serious illnesses are so expensive, having access to these funds before you pass away can help you pay medical and other bills during a stressful time.

2. Transamerica

This company has been in business for more than a century and is consistently rated highly for service and transparency. They offer burial policies of up to $50,000 for qualifying individuals under age 55, which is the highest available for this type of insurance.  At age 65, you can purchase up to $45,000 in coverage. At age 75, $40,000 and so on.

3. Baltimore Life

Not everyone will recognize the name, but Baltimore Life offers outstanding burial insurance coverage and a generous menu of plan options under the name Silver Guard. For Silver Guard coverage, which is a level benefit plan, you’ll need to answer a brief health survey.

If you can’t pass the survey, there are graded plans available under the names Silver Guard II and III, with a benefit payout of 25% the first year, 50% the second year and the full 100% thereafter. Another feature is the ability to write an immediate draft for up to $1,000 of the full benefit if needed. If you die accidentally, the coverage is 100 percent on all policies.

4. Americo

This company also offers a variety of funeral insurance plans with different benefits. Americo’s whole life burial insurance covers anyone ages 50 to 85 with level premiums no matter how long you have the policy. Coverage goes from $2,000 to $30,000 depending on how high a premium you want to pay.

For those who don’t qualify for the level premium coverage, Americo also offers a three year, graded benefit option. If you are terminally ill, you can get an accelerated death benefit from their Ultra Protector I & II policies.

5. Sagicor

This relatively unknown insurance company has great plans for anyone looking for simplified burial insurance. For anyone under 65 years old, a simple set of medical questions is all it takes to qualify. If you’re over 65, Sagicor offers an underwritten plan or a No Lapse Universal Life policy for up to $25,000.

If you are relatively healthy, Sagicor is a great option because they have several health classes with premiums scaled to your health level. You can save significantly on premiums with Sagicor, and they will write a policy starting with benefits starting at $25,000 and going as high as you want them.

Their accelerated death benefit option applies to both terminal and critical illnesses, giving you the option to claim your benefit if you have a critical illness and need funds.

6. United Home Life

If you’re looking into purchasing burial insurance at a younger age, United Home Life has you covered. For a simplified issue policy, you can be anywhere between the ages of 20 and 80.

Their burial coverage is also broader than other companies. You can get up to $100,000 of protection with United Home Life, which is the highest coverage we’ve seen for a funeral expenses policy.

7. Amnico (American National Insurance Company)

This company offers burial insurance with no medical exams and they consistently rank high with AM Best and Standard & Poor’s.

They offer a guaranteed burial policy for anyone ages 50 to 80, even if you have a pre-existing condition. Although it offers a graded death benefit for the first two years, it can be very helpful if you’ve been turned down elsewhere.

8. Gerber Family Life

You’ve probably seen the ads on television for this company’s burial insurance, which doesn’t require a medical exam. If you have a pre-existing medical condition or are simply suffering from health issues, you can still qualify for coverage of up to $25,000 if you’re between 50 and 80 years old.

There is a waiting period, however, so if you die before you’ve paid the premiums for two years, no benefits will be paid unless you die accidentally.

9. Foresters

There is a very easy health survey to complete for burial insurance from Foresters, but it’s just a few simple questions. If you meet their criteria, you can get some excellent rates for your funeral insurance coverage. In many cases, they offer the lowest premium rates available.

If you’re less than 80 years old, you can get as much as $35,000 in coverage with their PlanRight Whole Life. From 81 to 85, the amount drops to $15,000, so buy early to get the best deal.

10. Assurity

This company is one of the best insurance companies around whether you’re looking for burial insurance plans, no physical exam plans or both. Once you have a policy, the premiums never increase, and the plan’s value will never decrease.

They offer an impressive $50,000 in coverage for anyone under 65 years old.

If you’re older, you can buy as much as $25,000. If you want low premiums and have relatively good health, Assurity may offer the best burial insurance plan for you. As with Forester, purchasing it when you’re younger will get you the best rates.

How Did We Determine The Best Burial Insurance Companies?

We looked at five key features when looking for good burial insurance:

  • A highly ranked insurance provider
  • Competitive pricing
  • A premium that won’t increase
  • Coverage that won’t lapse with age
  • Total amount of coverage available
  • Any additional benefits

Best Burial Insurance Rates – Wrapping It Up

Now that you have a better understanding of what burial insurance is, who it is right for, what coverage is available to you, and who the best burial insurance companies are, you are ready to move forward and find the right policy for your needs.

While comparing rates on the internet is now easier than ever before, and you can have dozens of rates available to you in just seconds, we still always recommend working with an insurance agent.

While many sites may claim to offer you the best rates, this is just after a quick process and does not include some of the finer details that really determine what the best coverage for you is.  That being said, an insurance agent is free to speak with, and can give you valuable insight into the types of life insurance available to you, and which one best fits your needs.

Speak with an insurance agent today and find the best burial insurance rates for you!

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