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Burial Insurance Plans

What makes a policy, a Burial Insurance Plan?


I am often asked this question, What is Burial Insurance and how does it differ from other Whole Life Plans?. Great question and I will offer a nice simple explanation of these plans.


Types of Life Insurance


First , there are really only two types of Life Insurance : Term and Whole Life. Term last for a contracted period of time. Whole Life insurance plans are designed to last the insured’s lifetime.


Burial Insurance Plans


Life Insurance carriers have created a niche market by developing a lower policy face amount (Maximum benefit amount) , Whole Life insurance policy. Face amounts generally range between $30K and $50K. These plans were designed to specifically take care of finalexpense costs of the insured. Final expense costs can include: Funeral / cremation, ceremony , flowers, travel expenses of other relatives etc.


Unlike standard Whole Life Insurance policies , to qualify for a Burial Insurance plan , carriers set up a list of conditions that allow someone to apply for their plan. Each carrier is different but here are some common guidelines:


Issues ages start at 50 and go to 80 - Some carriers will issue up to age 85
No Medical Exam

Simplified Yes and No answers on the application

Immediate full face amount of the benefit , if you qualify, will be in force from day one.


I would say that the most common components , regardless of the carrier, are the age of issue and Face amount offered. Most carriers consider a plan to be “Burial Insurance” if issued at 50+ and the face amount does not exceed $30K - $50K


Health Impairments


Even if you have major health problems, there is a probably a plan that will accept you. Those with health impairments may be offered Graded or Guaranteed Issue Life Insurance policies.


Graded and Guaranteed Issue life insurance plans


The basic feature of Graded policies is that the full face amount will not be in-force until after a period of , depending on the carrier, 24 - 36 months. During this time , if death should occur, carriers will return the premiums paid, plus interest. As an alternative, some carriers will pay out a percentage of the policy during this period. The bottom line is that your beneficiary will get premiums back plus some additional funds.


Graded or Guaranteed issue plans generally have smaller maximum face amounts. Some carriers will only offer up to $10K in coverage. Beyond the 50+ age of issue and no medical exam life insurance feature, some carriers will only ask a couple of health questions while some carriers will ask no health questions.


Cost of Burial Insurance Plans


Depending on the plan the premiums can be very reasonable. If you move into a Graded or Guaranteed issue plan the premiums can quickly rise. If the premiums get to expense it may be well worth your time to consider other options.


Summary


Obtaining the right life insurance for seniors can be a challenge. Make sure you work with an independent insurance broker who has access to multiple plans. I, for example, work with 15+ plans. There is no “One size fits all” plan. Everyones situation is different and you need to get a plan that fits your specific needs.


About Tom Poblano - I am an independent life insurance agent and owner of M2 Insurance. I specialize in No Medical Exam and Burial Insurance plans. I am licensed nationwide.