Burial insurance is a type of insurance policy designed to cover the policyholder’s funeral expenses. Seniors above 60 generally take burial insurance to ensure their loved ones can manage the funeral expenses comfortably after they leave this world.
There is a lot of confusion about how these burial insurance policies work. To make things easy for you, we have shed light on the working of funeral insurance policies.
How Does It Work?
Many insurance companies offer burial insurance policies. It provides a specific limit of benefits to the beneficiary mentioned in the policy. When the policyholder dies, the beneficiary can cash the policy. Burial insurance is generally marketed to seniors.
One of the temptations in purchasing burial insurance is the insurance company makes it easy to set up. You can order burial insurance by email or phone, and there is no physical examination required. Since the policy is targeted at seniors considered a high-risk group, these policies’ premiums are higher.
As per the information given in Mutual of Omaha burial insurance reviews, the policy does not immediately kick in after purchase. It has a specific wait period time set after which a full death benefit is provided. However, you also have burial insurance products with no waiting period, and the full death benefit is available from day one of the policy’s purchase. Burial insurance only offers coverage of up to 100 years of age.
Type of Burial Insurance Policies
The way the burial insurance works also depends on the type of insurance you are buying. For example, if you buy a single-premium policy, you need to pay a large upfront sum, but you get immediate coverage. According to insurance experts, graded death benefits increase as you continue paying premiums over the years.
Like traditional insurance policies, the policyholder’s coverage from the start till the policyholder’s death as long as you pay premiums on time.
Burial Insurance Costs
As per the information from burial insurance experts like Gary P. Cubeta, Insurance for final expenses, and many Mutual of Omaha burial insurance reviews, burial insurance is offered at a rate tad lower than life insurance. While life insurance has thousands of dollars payout, the burial policy gives a few thousand dollars. The burial policy cost depends on factors like your answer to medical condition related questions, age, and gender. The insurance costs are around $15 to $80 per month. However, the average cost of burial police hovers around $50 per month.
How to Cash Burial Policy?
Burial insurance builds cash value over time. The policy provides permanent coverage, and the premiums stay the same throughout the policy period. Some insurance companies allow the policyholder to opt for a partial payment of the death benefit to meet the end of life expenses.
The money provided to the policyholder while he/she is alive is known as the policy’s cash value. Remember, you do not get a policy cash value option in every burial insurance. The reason is that not every burial policy builds cash value.
To sum up, burial insurance is an excellent option for seniors above 60. The fundamental objective behind taking the burial policy to ensure the survivors have enough money in hand after their death to settle bills and pay for the funeral.