Burial Insurance For Seniors… Is it a good choice for me?
In this post, I will discuss this very difficult to talk about yet very specific life insurance product. Yes, Burial Insurance is a very focused type of life insurance designed for applicants typically in their senior years.
The typical and best burial insurance policy is designed on a whole life insurance platform and usually simplified for seniors who are no longer in excellent health any longer. This means that there are less health questions and no medical exam required. In some cases, it can mean no health questions at all.
Death benefit amounts run from about $3,000 to more than $25,000. Appropriate policies will only be based on permanent life insurance to avoid unintended expiration and guarantee level premiums for life.
Burial Insurance plans are designed to be easy to understand and apply for. This is one of a few reasons they are typically designed with whole life insurance at the core.
The most common, non-expiring form of permanent life insurance, is whole life insurance.
There is a lot of confusion with burial insurance these days. Homes are flooded with commercials and mailers for “affordable” life insurance with no health questions and high paid spokespeople encouraging seniors to overpay for coverage. Even the mailers include teaser rates designed to entice consumers to buy coverage that is not recommended by senior life insurance professionals.
Be careful who you are dealing with ladies and gentleman!!
With that all said, these are key features of premium, burial insurance, seniors can depend on:
- Monthly premium cost will never increase
- No examinations necessarily required to qualify
- Permanent policy. You will not outlive the benefit payout.
- The death benefit to the beneficiary is guaranteed to never decrease provided the policy owner does their part
- The full benefits are available upon your acceptance…your first payment to the last. No waiting periods (2 or 3 years) for full benefits (guaranteed acceptance life insurance policies).
The way your family benefits here requires you make a firm commitment to keep the selected (monthly, annually, etc.) payments up. Insurance companies make huge profits over time with people not keeping the coverage for the duration of the contract.
Never take out a burial or funeral insurance policy unless you are comfortable with paying the premium. The only one who benefits if you drop the burial policy is the life insurance company! How does that help you or your loved ones? Make the commitment before you buy any coverage.
How To Put Burial Insurance to Work For Your Family:
According to the NFDA (National Funeral Directors Association), the average cost of a funeral is about $8755 as of 2017. Of course this varies from place to place, it is expensive to leave this world. With costs on the rise, it is important than ever to have a plan in place to take care of our responsibilities not only to protect our loved ones, but make sure our financial obligations are covered as well.
Like any life insurance policy, burial life insurance is a legal binding policy stating the insurance company will pay the named beneficiary(s) a specific death benefit upon the loss of life of the insured individual.
You may take the burial policy to any funeral home of your choosing to plan a funeral and burial if you would like. The director will attach your planned arrangements to the policy so when end of life has come, it is clear as to what your final wishes are. You have now completed all the burial planning upfront and the policy will deliver the funds to carry out your wishes.
Upon loss of life, the life insurance company will promptly remit a check for the full death benefit amount to the named beneficiary…tax free to them. Be sure to provide all requested information regarding beneficiary(s) so that monies do not go thru probate. A properly named beneficiary will bypass probate and insures that your loved ones will have the funds promptly. A good life insurance agent should make sure all necessary information is gathered and recorded to avoid problems down the road.
How Can The Policy Benefits Be Used?
None of these funds must be used for burial. It just ensures money is there for your loved ones at a stressful time. Often, the cost of a funeral and burial are near $10,000 nationally. Since the death benefit is a cash payout, the beneficiary can use the money anywhere they see fit… to settle other debts, pay off final bills etc. The cost in your area may be a bit higher or lower than $10,000 with an apples to apples comparison.
Anything that remains from the policy after covering death related expenses can be kept by your family/beneficiary to help in adjustment from their loss.
Of course, no amount of money will ever replace a life, but most of us would feel a lot better knowing we did not leave a large financial crater behind either.
Example: Say you purchased a $15,000 final expense, burial insurance policy. Now, let’s assume that the full cost of your funeral, plot and headstone totaled $10,000. The remaining $5,000 can be used for any other purpose your loved one’s believe to be appropriate in the scenario.
Sometimes a larger or even more than one policy is purchased to help create a financial legacy/inheritance. Remaining funds after the outstanding expenses for burial are covered can be passed on specific loved ones.
For some seniors, leaving behind an additional legacy for their family or other beneficiary is important to them. A larger Guaranteed Universal Life Insurance (GUL) policy is probably a better choice if you would like to build in an inheritance or a legacy. These policies are more affordable and guaranteed coverage to even age 121. These can be used for burial coverage as well but have death benefits starting at $25,000 typically. GUL is not designed for smaller policies.
The 4 Standard Ratings For Burial Insurance
The 4 options that are available are determined by your general health and the answers to the health questions on the application. Each life insurance company will have some differences in how they question their applicants and apply a specific “rating” to your health respective of being a senior citizen.
Simplified issue policies like these are meant to be senior friendly. It is expected that your not in the same health as your were at age 25.
A typical burial policy will qualify you based on your honest answers to the specific health questions contained in the application. Life Insurance companies have differences among their questioning. Be sure you find a professional that can shop your case for you so you are not overcharged.
Answering “yes” to a typical health question on a burial insurance application will move you up to a higher rated class. Again, be sure to be totally honest. Do not even sugarcoat anything. Everything is investigated.
- Level or “Preferred” Benefits: You are able to answer “no” to all of the insurers health questions. You are covered for the full death benefit from day 1 and pay the lowest premium the life insurance company offers for a simplified burial policy.
- Graded Benefit Policy: This is a popular plan for those seniors that have a more significant, but not fatal health condition. It is the middle of rating classes but is quite different than Level Benefits. With a Graded policy, the first two years or so of coverage have reduced benefits. If death occurs during the “graded” period, the life insurance company will return all premiums paid plus interest. After the 2-3 year “Graded” period (depending on insurer) the policy will pay out the full benefit amount to the beneficiary.
- Modified Policy: This is an upper risk category for applicants in questionable senior health. These policies also have limited benefits the first couple of years. What this all translates into is return of all paid premiums plus interest if death occurs during that time. We sometimes recommend that you avoid these policies. Often times, they cost more than the next category and just don’t make any financial sense. Don’t get overcharged.
- Guaranteed Issue (Acceptance) Policy: These are the savior policies for those with a very, very tough to insure health condition(s). These are high risk life insurance policies in pure form. There are NO health questions to qualify for and it is designed for people that cannot qualify medically. They are “Graded” the first couple of years so the full benefits for natural death are not available until the policy matures further. After that period (2 or 3 years), full benefits will be paid out.
Burial Insurance is typically a no medical exam type of policy. It promotes ease of issue. However, in the case of guaranteed universal life for seniors, you will likely be required to have a nurse come to your home for an exam.
However, no insurance company will issue a full benefits life insurance policy without medically underwriting your application (health questions).
Guaranteed issue whole life insurance has a waiting period you must make it through before the policy will entitle your beneficiary to full benefits. You must understand, they are operating with little to no information about you. Gauging you as a risk is tough as a result. They apply a higher premium and waiting period to offset this risk.
During the waiting period, if natural death occurs to the insured, the beneficiary of the policy will receive a refund of all premiums paid plus a typical 7-10% interest rate compounded annually.
Who is Eligible to Apply For Coverage?
Anyone to age 89 may apply.
Whether you will be accepted depends on:
- Your health. Most plans will require you to qualify based on your current health. There are higher priced, no health question policies offered as well.
- Your Age. Some plans are not available to certain age groups.
- Your State of Residence. Many insurers do not market coverage in every state.
If you are in the age bracket of 50-85 we can get you covered. Outside of those ranges, we have to explore different options to see what is best for you.
Our team is very experienced at finding the best policy for even the toughest of health conditions. It is a rarity if we are unable to secure a medically underwritten policy for our clients Roughly 90% of applicants have full, immediate benefits.
Is there a difference between Burial Insurance, Funeral Insurance or even Final Expense Insurance?
While the uses of the terms may create confusion, any of the 3 policies can be designed with death benefits that will get the job done. What they all do in the end is the same. This article will discuss this in a bit more detail and the marketing terminology insurers and agents use. Personally, I tend to throw the terms Burial Policy and Final Expenses around a lot interchangeably. Don’t get caught up in the marketing of the product. Real burial insurance is built on dependable, permanent life insurance for seniors, most often simplified issue whole life insurance.
Ladies and Gentleman… The Word of Warning
There are a few companies and organizations out there aggressively marketing life insurance policies for burial and final expenses that actually expire on your 80th birthday!! Premiums often go up every five years as well along the way to expiration.
This low grade type of coverage is certainly not the best burial insurance for seniors. It benefits those who sell it and is not even priced reasonably. In no way is this type of product in your best interest. This is not reliable burial insurance for any senior planning end of life needs. How much does an expired policy help your loved ones when someone passes away after expiration at the age of 81, 82, 83? Good luck getting affordable coverage unless you have very good health at age 80. It can be done, but many 80 year olds have more serious health issues that hamper them. Guarantee acceptance policies are available, but have a 2 or 3 year “waiting period” before full benefits are available. The kicker is, guaranteed acceptance burial policies are very expensive by that point.
Run away from anyone, any insurance company or organization trying to sell you one. There is a big push, for “cheap” term life insurance. Term means temporary. Your actually renting coverage for a fixed period of time.
Understand, your loved ones will not get any money back unless you die prior to age 80 with a policy like this. Instead, the coverage cancels automatically and now at age 80, your health is not as good due to advanced age leaving nothing but very expensive options to you. At age 80, burial insurance becomes considerably more expensive. These “little details” are carefully tucked away. As a result, many seniors and/or their families are real upset to say the least when they learn the hard way.
This is why you need to have an independent agent/broker who can shop the market so you don’t have to settle for being overcharged for questionable coverage.
The 10 Best Burial Insurance Companies Plus a Bonus
Who has the best burial insurance? Well, that is a bit of a vague question. Knowing a little bit about your health helps match your needs to the right product(s).
One of the challenges seniors face is having the time it takes to investigate and determine which burial insurance carrier will offer them the best rates. Remember this advice…there is no “Best” insurance company. Many times, people associate a recognized name with “best.” Do not make that mistake. What you are really looking for is the ideal product first and then determining its cost to see if it is a good solution for your family needs.
There are many factors that go into determining the ideal life insurance company that are best left to working with an independent agent/broker who specializes in senior health issues. They can quickly identify who may be your best option. However, for your reference, here are the 10 + different companies that offer excellent burial insurance for seniors at a very affordable rate.
AIG came out of nowhere in 2017 announcing their Guaranteed Issue policy. Burial Insurance is now available from the life insurance giant, American General with absolutely no health questions and no medical exam required.
This particular policy is for ages 50-85 and has coverage amounts available up to $25,000. As is the the norm for guaranteed issue coverage, this policy is graded and will pay 110% of the premium paid in if the insured dies in the first two years of coverage. The full death benefit will be paid out after the 2 year waiting period expires. The person paying on the policy can be someone else other than the actual insured. This makes this a good option for adult children looking to plan for a parent or parents inevitable passing who may not be able to afford the costs associated with death.
Americo has designed a few different burial insurance products for ages 50-85. All these products are designed to cover final expenses and or burial expenses. The premiums are as such guaranteed to never go up and the coverage amount can never be reduced unless you take a cash loan out against it. (Not recommended) Applicant age range is 50-85. Coverage can never be cancelled due to your health or age. Policies as low as $2000 and as high as $30,000 are available from Americo. On their Ultra Protector Series, an accelerated benefit rider is available that allows up to 50% of the death benefit to be paid if the insured is diagnosed with a terminal illness. The Ultra Protector I and II do require all applicants to pass the medical underwriting portion before coverage can be issued. No medical exam is required.
For level, graded and modified death benefit burial policies, American National offers permanent coverage with benefit amounts from $2000 all the way to $50,000. Specifically up to $25,000 for grades and modified and $50,000 for standard whole life coverage with full death benefit availability upon acceptance. All policies build cash value and offer an terminal illness rider for policies of $25,000 and greater.
Assurity is a top life insurance company for a simplified issue, no-medical exam policy. These whole life products offer affordable answers those those who need, burial, final expense or funeral insurance. Coverage can begin as soon as you are accepted and issue amounts range for $5ooo to $50,000 for those under age 65 and under. From 66-80, the maximum benefit amount to your beneficiary is $25,000.
Baltimore Life offers a permanent, whole life, burial insurance plan called “Silver Guard.” Silver Guard I is a policy that will require all applicants to qualify based on health questions contained in the application.
For those individuals that have a serious condition that can be maintained, the Silver Guard II and III could be good options. While these are both graded death benefit policies, they offer 25% of the full death benefit in year 1, 50% in year 2 and the full 100% in year 3. The full death benefit is payable in the case of accidental death.
Foresters offers a competitive simplified issue burial policy which will require health questions to be answered, but there is no medical exam required. Again, as a simplified issue plan, it is designed for seniors age 50-85. Foresters health questions are quite liberal so often times they can offer coverage on standard rates versus a more expensive graded policy. Even with the more liberal underwriting, Foresters can be very competitive for Burial Insurance. Maximum coverage is $35,000 to age 80 and $15,000 for age 81-85.
Gerber is probably best known for its very competitive guarantee issue whole life policy. It suits individuals with very serious health issues and provides low rates for being burial insurance issued with no medical questions or exam required. Coverage is available for people age 50-80 with death benefits ranging from $5,000 to $25,000. As with any guaranteed issue policy, the coverage is graded for the first 2 years. If death occurs due to an accident, the policy will pay the full amount. If the insured passes away due to natural causes during the first 2 years, the beneficiary(s) will receive all premiums paid plus 10% If your needs require a guaranteed issue policy, you can do a lot worse than Gerber Life.
Mutual of Omaha
Here is another one of the big names out there in the life and health insurance business. A Fortune 500 company at that. Mutual of Omaha offers their own whole life burial policy for ages 45-85. Burial insurance in the amount of $2000-$40,000 is available on this standard simplified issue policy. An accelerated benefits rider allows the policy owner a one time option to receive a large lump sum payment in the event of a terminal illness. Mutual of Omaha has random phone interviews and prescription drug screening for their policies. You should be prepared for a 20 minute conversation with someone in the underwriting department to verify the information provided in the application is accurate. Little more red tape, but Mutual of Omaha offers an excellent peace of mind combined with competitive rate.
Sagicor Life offers a simplified issue, guaranteed universal life insurance product for people 18-65. Individuals age 66-85 will be required to go thru full medical underwriting during the application process. While this is more involved for many to get issued, be aware that these policies start at a minimum of $25,000. This is a no lapse, universal life product meant for higher death benefits.
Sagicor’s offering makes a very good option for those needing a larger amount of coverage than typical burial insurance policies. The company has many rate classes to qualify people and does take higher risk conditions in many cases. An accelerated benefit rider for terminal illness/chronic illness is included in the policy at no cost to you.
One of the most well known and highest, financially rated insurance carriers out there, Transamerica has provided top notch coverage to people all across the country for over 100 years. Though the “power of the pyramid” is still their symbol, Transmerica is no longer headquartered there. One of the pointers that sets them apart from their competitors is that they offer burial insurance plans that are considerably larger than most other companies in the industry.
Under age 55, you can purchase up to $50,000 of coverage which doubles the offerings of most other carriers offer. At age 65 you may purchase up to $45,000.
These are policies with a few extra bells and whistles not found elsewhere and receive positive reviews here.
United Home Life
United Home Life offers their Express Issue Premier series of Burial Insurance. It is a simplified issue policy and covers people age 20-80. Death benefit amounts start at $5,000 all the way to $100,000 for ages 20-60 and $5,000 to $50,000 up to age 80. This makes United Home Life a good option for seniors. It is favorable product for a bit healthier applicants that are looking for a very competitive cost of coverage.
Big Household Names That Masquerade…
…Masquerade as Burial Insurance. You have probably heard of them. Companies that are supposedly looking out for you. One of them is supposed to be an advocate for senior citizens. They are not included above for very good reason. They offer low initial premiums that increase every 5 years until they are either unaffordable or the policy expires. So, the insured loses coverage because they can no longer can afford the higher premium or it simply expires ag age 80. Your notice of expiration will be in the original policy. Mark your calendar…when you turn 80, coverage terminates and there are no refunds and no cash value though that is not a key factor with burial insurance. Cost of ownership ends up being high for the benefits received.
The sad thing is, these companies allude to the coverage being designed for burial or final expenses, but in fact are poor quality products that reputable agents would not suggest let alone market to a trusting consumer. Yes, many “cheap” policies are masquerading as a burial insurance solution that expires, gets expensive or even inserts a limited benefit period for natural death.
Avoid these products. They are enticing, due to be “cheap,” but under the hood, not appropriate for burial insurance. These products have absolutely no business being termed as burial policies!! This is why you speak to a licensed professional who is independent and not limited.
How Much Does It Cost For Burial Insurance
There are a number a variables that would affect your rate. With that said, your age, sex, age, tobacco use, type of life insurance applied for (term, guaranteed universal, whole life), death benefit amount, overall health, guaranteed issue product will all impact the result. The best burial insurance quotes will be from medically underwritten products. No medical exam, medically underwritten policies for seniors are easy to come by with us.
The easier a burial, final expense or life insurance policy is to qualify for, the more expensive per thousand dollars of coverage you elect. Remember that rule. No exam policies with no medical underwriting are absolutely the last resort. These include such plans as Colonial Penn’s Guaranteed Acceptance Life Insurance. Avoid these types of products unless you cannot medically qualify. Medical qualification should be done with a reputable, independent agent. You have everything to gain from this relationship. See what you qualify for that gives you full coverage for the best premium upon acceptance.
Burial Insurance For Seniors – Conclusion
We do not know when we are going to die. End of life planning would be so much simpler if we all had a crystal ball. To ensure benefits for our loves ones, permanent insurance coverage is needed. Be sure you are only working with a senior benefits specialist that can help you make a good decision that is best for you, not some insurance company pushing a very questionable product. It costs you nothing to have the expertise of an independent agent who specializes in coverage like burial, funeral or final expense insurance.
I started working with seniors in the later 90’s. Since then, observations have shown that many clients live well into their 80’s. Male and female alike. Don’t get sucked into the teaser price. Your not going to save all but a few bucks a month at best and may create a big financial problem for your loved ones if you outlive the coverage. Term insurance can expire when your family needs it the most. Getting burial insurance in your 80’s will be considerably more expensive and possibly unavailable to you. Reputable agents and agencies will refuse to market low quality or inappropriate products all together. The alternatives are clearly superior for seniors. Don’t take a chance, do it right from the beginning. Get the right product, insurance amount and then focus on getting a competitive price. You can simply start by using the instant quoting form on the right sidebar. Be reasonable about your health and you have a starting point to work from.
Feel free to contact us for help or guidance. We’re here to help. Phone or email are both fine. If you would like to leave a comment below, feel free.