What is Burial Insurance?
The rising costs of funerals and burials in modern times have made burial insurance a valuable tool for end-of-life financial planning. Simply put, burial insurance is a type of life insurance that pays out a lump sum benefit upon the death of the policyholder to their beneficiaries. This lump sum payment is meant to cover the final expenses associated with a funeral, burial plot, headstone, or cremation. While life insurance provides financial protection for loved ones, burial insurance focuses specifically on covering the direct costs of bodily disposition.
Factors Driving Up Funeral Expenses
Burial Insurance are several reasons why funeral costs have increased dramatically over the years. Inflation has steadily driven up prices for caskets, vaults, services, and more. Advances in embalming techniques and facilities have made modern funerals more elaborate productions. This has raised the bar for expectations, particularly as people live longer and farewells become more drawn out occasions. Additionally, burial plots in desirable locations have become more scarce and expensive to obtain. All of these cost pressures are why the average funeral now exceeds $7,000 according to the National Funeral Directors Association.
Burial Insurance Plans to Fit Every Budget
Considering average burial expenses now surpass many individuals' savings, having a burial insurance plan in place helps protect loved ones from shouldering this unforeseen financial burden. There are burial insurance options available at varied price points to suit budgets of all sizes. The most basic plans offer coverage of $5,000 or less and have affordable monthly premiums as low as $15. More generous policies providing $10,000 or higher in benefits require higher but still reasonable premiums in the $30-50 range. Custom plans can be tailored to the insured's specific coverage needs and budget.
Applying for Coverage
The application process for burial insurance is fairly straightforward. Applicants need to provide basic identifying and medical information as part of the underwriting process. Coverage is usually approved quickly with minimal paperwork. Those in good health can often qualify regardless of age. Insurers do not require medical exams for plans with relatively low death benefits. Premiums are then locked in for the life of the contract, providing excellent long-term value. Policyholders maintain control and ownership of their burial insurance with no risk of rate hikes.
How Payout Benefits Are Received
When the insured passes away, their designated beneficiaries simply contact the insurance provider to file a claim. Required documentation usually includes a copy of the death certificate and proof of the insured's identity. Beneficiaries then receive the policy's pre-agreed lump sum through check or electronic payment. This finances the costs of final arrangements without further delay at such an already difficult time. The resources are there to focus on mourning and celebrating a loved one's legacy rather than financial practicalities.
With the high and ever-increasing price tag now associated with funeral rites, having an affordable burial insurance plan offers invaluable protection and peace of mind. For just a few dollars per month, coverage is available to cover up to tens of thousands in costs upon one's eventual passing. Taking out a policy ensures funds are set aside to honor the end-of-life needs and wishes of the insured without placing undue financial burden on grieving family members. In an era of rising funeral prices, burial insurance has become an important part of a thoughtful estate plan.
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