Seniors have two types of burial insurance to choose from – standard burial insurance and pre-need burial insurance. Both are meant to cater to the final expenses, with a difference in who gets the insurance sum when death occurs. Gary P. Cubeta from Insurance for Final Expenses says that providers like Colonial Penn Burial Insurance offer both options for the convenience of the seniors who plan to take burial insurance, however not without a catch.
The catch is there’s a waiting period of two years, and if death occurs any time before the waiting period, you (your beneficiaries) are not entitled to the payment. If you are moderately healthy and want to take this policy, there’s an inherent risk involved.
On the flip side, Colonial Penn has a policy where it doesn’t ask any health-related questions, regardless of your health condition. However, they charge a slightly higher premium, which most people don’t mind paying.
What Is Meant By Burial Insurance For Seniors?
Also called final expense insurance, burial insurance is life insurance where the end-of-life expenses are covered. Not just the funeral expenses, but the medical bills, credit card bills, mortgage, other loan dues, etc., are all covered.
The typical expenses include:
- Memorial Service
- Urn or Headstone
- Outstanding Bills
- Cremation or Burial
Burial insurance is for your whole life, and you will be paying premiums until your last day. The benefit is that the premiums are fixed and do not fluctuate, regardless of how long you survive.
Choose the Right Benefit
However, what’s crucial here is choosing the appropriate death benefit for your burial insurance. This helps prevent paying an excess amount in premiums. Also, it makes sense to research the current prices of everything required to conduct a funeral. After getting quotes from half a dozen companies, you should calculate the other expenses that need to be covered after you pass.
Check if there’s a provision to pay off your credit card dues and other loans. If such debts are not taken care of, they become your next of kin’s liability, which is not a great legacy to leave behind.
Assuming the funeral costs should be within $9,000 (at current costs), you can easily calculate the other expenses and check if the total matches the payout for the policy you plan to select.
What If I Have Life Insurance Already?
Most people would have been prudent enough to take life insurance during their prime years for $100,000 or $200,000, which would have come in handy to cover the kids’ education expenses if death had occurred. However, since you’ve survived it all, it makes sense to have an additional policy solely for burial insurance.
This way, the other policy remains intact, and your loved ones can use that as they deem fit. It is better to take a fresh policy for burial expenses based on your current health condition and your capacity to continue paying the premiums until the end.
The premium depends on age, state of residence, and gender in policies like Colonial Penn Burial Insurance.
Is There Any Burial Insurance With No Waiting Period?
Getting burial insurance without any waiting period is possible. However, it involves undergoing a medical exam and filling out a lengthy questionnaire before the company can decide. Otherwise, a guaranteed burial insurance policy has a minimum waiting period of 24 months and can go up to 36 months.
This is not meant to deter seniors but is a sort of insurance for the insurance company itself, which can’t afford to insure terminally ill persons and payout a considerable sum in a short period.
Which Is Better – Pre-Need Or Standard?
When selecting between pre-need and standard, the former is beneficial for the funeral service providers. They get the full sum and can provide the services at a lower cost and pocket the balance. While the next of kin can ask the funeral providers to include all the services listed, they don’t have a say on the quality of services provided.
The standard burial insurance is advantageous and beneficial for your beneficiaries who can take care of the funeral expenses; and pay the other loans and credit card bills, if any.
Summing it Up
Burial insurance is a safe way of safeguarding the interests of your loved ones after you pass. They don’t have to be burdened with your final expenses as the insurance takes care of it.