The following article we address those who are looking for burial insurance or funeral insurance for seniors. A lot of times we speak with clients or client’s children who are trying to tie up any loose ends upon dying. So we put together this article to answer many of the common questions we get as well as provide information that will be valuable for anyone trying to find this type of coverage.
Finding the Best Burial Whole Life Insurance Policies for Seniors
Please note: for the purposes of this article, burial insurance and funeral insurance will be used synonymously. We are referring to small whole life insurance policies that cover burial costs and funeral expenses. We are NOT referring to pre-paid burial or funeral plans.
Thanks to a recent survey and related report, we now know that an average funeral has the potential to reach $10,000. When the family is trying to cope with the death of a loved one, this is a huge amount of money to find and often causes significant damage.
As well as threatening the financial future of those left behind, the family members often don’t have a chance to grieve when trying to arrange the funeral and find money which can lead to mental health issues (think stress and anxiety) in the years to come.
However, there is a solution so that the loved ones left behind do not have to handle the financial side of the funeral – burial insurance for seniors.
This may be for you or life insurance on someone else, such as a parent, grandparent or even an uncle.
Burial Insurance Overview
As soon as society classes you as a ‘senior’ and you haven’t got a life insurance policy in place, it is often too late. If you apply for life insurance as a senior, your age will work against you and the premiums may be extortionate.
However, this is just the tip of the iceberg because they will increase even more if you have any health problems. Sure, you could buy guaranteed issue life insurance but the cost would be too high and the death benefit doesn’t activate for around two years. Therefore, another solution is required.
For many, they choose to go on with nothing in place at all. This being said, it isn’t a great solution if you want to avoid all the problems we discussed in the introduction. Therefore, more and more seniors are choosing to go for burial insurance and this is a much smaller type of simplified issue life insurance policy.
Once set up, this ensures that some money will be available for a beneficiary in the shape of a death benefit. When the policyholder dies, the money will be paid out and can be used towards medical bills, debts, funeral costs, and any other final expenses or burial costs that arise. Today, we have useful information for you on this topic including where to go, what policies are available, and more.
Burial Insurance Considerations
Before you go ahead and start researching the best burial insurance policies and companies, we believe that everyone should start with a simple piece of paper and a pen. Once you are ready, take some time to consider exactly what you need from your policy.
At first, your answer is likely to be simple – ‘I want my family to have money after I pass’. However, you need to think about exactly how much coverage is needed. For this, you need to decide whether you want to be buried or cremated first and foremost. When planning your insurance, this decision will affect your policy because of the difference in cost between the two.
After this, you also need to think about burial location, funeral service, memorial service, casket, flowers, arrangements for the wake, etc. With all these expenses, it isn’t hard to see why funerals can be so costly, as well as why having a good final expense policy is important.
Although it may not be nice, you should sit down with family members to discuss these decisions. Once you know these details and your family has them clear in their minds, you can better understand the sort of coverage you require.
Burial Insurance Companies Review
Before we head into the costs of burial insurance and many other factors, we should attempt to answer the question ‘who provides the best burial insurance for seniors?’.
Nowadays, there are numerous companies on the market all suggesting that they offer the best coverage so what is the actual answer? In truth, it can be difficult because every single one of these companies has happy customers. Despite this, we are going to show you their A.M. Best ratings for finances as well as their options when it comes to burial insurance.
AIG (Excellent – A)
In total, up to $25,000 can be found with AIG for those aged between 50 and 85; this is seen as guaranteed acceptance whole life insurance. Chronic Illness and Terminal Illness riders are included at no extra charge. AIG offers a fantastic funeral insurance policy or burial policy if you fit into the age requirements. The policy is issued by American General Life (AGL) in all states except New York.
Foresters (Excellent – A)
For Foresters, there is a little more movement with a total of three different plans within their PlanRight policies: level, graded and modified. While some have the death benefit available from the very first day, others will have it held for a certain amount of time.
From $2,000 all the way up to $35,000, options should be available but many factors will be considered including your age; once again, it normally falls within 50 and 85, with the modified contract available for ages 50-80.
MetLife (Superior – A+)
For whole life insurance policies, MetLife has guaranteed acceptance for all customers between the ages of 50 and 75. Regardless of your circumstances, there is no way to get rejected from this as long as you fall in between the age parameters. As you can see, MetLife cut the higher band down to 75 years of age. The MetLife Guaranteed Acceptance Whole Life Insurance policy has a two year graded death benefit.
For healthier clients, MetLife Promise Whole Life 120 is a great permanent life insurance policy. It offers the following guarantees: guaranteed death benefit, guaranteed cash value, guaranteed level premium, and the potential to earn annual dividends.
Settlers Life Insurance Co. (Excellent – A-)
From all we have seen so far, Settlers Life Insurance Co. offer the most amount of packages with four. As whole life insurance policies once again, you can find a maximum coverage of $50,000 – this falls all the way down to just $1,000. Whilst there is no minimum age limit, it cuts off at 85 years.
- Good health the past 5 years
- Up to 85 years
- Good health the past 2 years
- Up to 85 years
Silver II Plan
- Some health issues
- Ages 50-75
- Non-smokers only
- Current health issues
- Ages 40-80
- Two health questions
- 2 year graded death benefit
Bronze Plan II
- Current health issues
- Ages 40-75
- 2 year graded death benefit
AARP/New York Life (Superior – A++)
As you can see, AARP life insurance sold through New York Life has the best financial rating we have seen and they also offer guaranteed policies from New York Life for final expense. From $2,500, they range up to $25,000 and cannot be rejected regardless of circumstances. In the majority of the country, you will have to be between 50 and 80 when buying a policy through AARP.
Colonial Penn (Excellent – A-)
Stopping at 75 years of age, Colonial Penn is one of the rare companies that chooses to drop below 50 years and continues all the way down to 40 years of age. With guaranteed acceptance for whole life policies available (50 to 85), they offer coverage of up to $50,000. However, gender and age play a large role in determining the policy offered from Colonial Penn.
State Farm Life (Superior – A++)
Once again, we have another A++ rating in terms of financial security according to A.M. Best and State Farm has policies for final expense, such as a $10,000 basic whole life insurance policy. In terms of ages, there is a thirty-year buffer from 50 to 80.
And there you have a small overview of the top companies that offer burial insurance for seniors. As you can see, they all have their different terms and conditions to follow but they also seem to follow a general formula. Although different amounts of coverage are available and the age ranges can vary slightly, they are all made in a similar vein so you will need to work out your needs and find a plan that is right for you.
Furthermore, you should assess the pre-need and pre-paid plans available and really find one that suits your needs both now and in the future.
Types of Burial Insurance Coverage
Now that you have your needs all written down, you can choose the type of burial or funeral insurance and there are two main options – pre-paid and pre-need.
Pre-Paid Coverage – With a pre-paid policy, there will be an opportunity to pay for the funeral in advance – with this option, the details do not necessarily have to be finalized. When the insured passes, the details can then be confirmed by family members. If you know exactly what you want at your funeral, there is no reason why you can’t have it all arranged and paid for in good time and this will remove a lot of the stress for your loved ones.
Benefits – When it comes to pre-paid funerals, there are some key benefits and we should start with the fact that it provides peace of mind for all involved. Not only will you feel relieved that your family members won’t have to worry about finding money after you pass, your family will also feel relieved that they don’t have to guess your last wishes. If you have an existing health condition, this is also a great way to prepare for the inevitable which will make it that little bit easier for the family.
Furthermore, the price of the funeral will remain the same regardless of how many years it is until you actually pass. Because it will not be affected by inflation, you can secure your funeral at today’s rates as protection. Therefore, last wishes and the finer details can be secured without worrying about price changes. Finally, we should also note that this type of arrangement allows for payments in installments which can be a great help.
Drawbacks – Sadly, there is often an issue with flexibility with this type of policy because some will not move as you move. Although some options today are transferable, there are still many that cannot be transferred so this is something you might want to consider when setting up the coverage.
In addition to this, refunds may not be available which means that you have to be absolutely sure that you want this coverage. In most cases, there is only one chance to get this correct so you are absolutely right to be researching this topic right now.
Finally, one major drawback of pre-paid funeral plan vs burial life insurance is the inability to pay for final expenses. With a good policy, such as burial whole life insurance for seniors, the death benefit can be used for whatever the beneficiary wants to use it for. In contrast, with a pre-paid funeral policy the only thing it buys is typically the specific funeral at that specific funeral parlor.
Pre-Need Coverage – On the flip side, you will also see an opportunity to buy a pre-need burial policy and this allows all details to be confirmed in the future. Instead of making huge decisions now, the policyholder can sit down and make decisions with their family a little later on. If you would prefer this type of plan, it gives you that extra time to make your mind up and then the arrangements can be put into place as soon as the time comes.
Benefits – With this plan in place, you can be confident that all of your desires will be fulfilled in terms of the funeral and all the other arrangements. Whether it is important documents, flowers, or even the music that will be played, this will all be settled beforehand. Often, there is a focus on making it easier for the policyholder but let’s not forget that this will make it easier for your loved ones too. While trying to cope with losing a family member or friend, the last thing they want to be doing is making huge decisions that affect how you will be remembered so this plan lifts the pressure a little.
Drawbacks – If we look towards the negatives, you could say that the lack of payment at the time of installing the policy is a downside. Instead of getting the payments out of the way, they have to be made at the time of death which means that costs may rise from the start of policy to the date of the funeral. With a regular burial insurance in place, this should cover all the major costs we discussed before.
Cost of Burial Insurance
Overall, the cost of your plan will completely depend on what policy type you choose, be it guaranteed issue vs simplified issue, the face amount you have chosen, the provider of the insurance, as well as your age and health at the time of opening the plan.
For most companies, you should have a little lower cost with the premium payments by paying annually, but with many you can also pay monthly, semi-annually, or even quarterly.
If you happen to use a price comparison website such as this one to assess numerous different burial insurance quotes from different companies, you will also have to remember not to take these amounts at face value.
Nowadays, some insurance companies are known for increasing their prices over time, such as Globe Life, so you may want to avoid these types of policies. As long as you know exactly what plan you have, you should be confident that the price will remain fixed throughout the duration of the policy.
Burial Insurance Policies for Seniors
When we took you through the different companies that offered burial insurance, you would have noticed that some allowed you to receive a plan regardless of your health condition. Ultimately, these are called ‘guaranteed issue’ plans and it is important to discuss because this will be important if you currently have a health condition. All things considered, there are a couple of types of policy depending on your circumstances.
Level Benefit Plans – Otherwise known as ‘Simplified Issue Life Insurance’, the process of assessing your health has been simplified when compared to full life insurance where you receive a medical exam. Instead, this normally leads to a few health questions to get an overview of your condition.
Although some people panic as soon as they hear this, more general health issues such as high cholesterol or any other minor health problems are normally fine. The main point of health questions for smaller simplified issue products is to vet out potentially high risk life insurance clients, such as those with cancer or heart disease.
Graded Benefit Plans – Otherwise known as ‘Guaranteed Issue Life Insurance’, this is when there is no health section to your application at all either because you want to avoid it or even if the questions cannot be answered to a satisfactory standard. Because the application cannot be rejected, they suit those with serious health conditions.
However, you will see some downsides to this including a higher premium.
Furthermore, there may be a certain amount of time before the death benefit becomes ‘active’. If you were to pass before this date, called the graded death benefit limitation, the beneficiary would not receive the death benefit but would typically receive all premiums paid plus a percentage added on top. A graded death benefit limitation is to protect the risky investment for the insurance company. In most cases, this time period will be two years (sometimes, it can be just twelve months or as long as four years—read the fine print).
What Does Burial Insurance Include?
As we have seen throughout, the different policies available will vary in their included terms and conditions. Despite this, there are some standard inclusions that will come regardless of the policy. If you were to take out burial insurance, you should expect your life insurance beneficiary to use the proceeds to pay the following costs:
- Service Fees
- Facilities Cost
- Staff Fees
- Embalming Costs
- Burial Plot
- Cremation Costs
- Digging/Filling of Grave
- Funeral Hearse
Choosing the Right Coverage Amount
With all of this information in mind, you might decide that you want to go ahead and get some coverage. However, how do you know how much you will need? When first deciding to get burial insurance as a senior, you should asses the current prices on the market for everything that will be needed for the funeral. Once you have an idea, you will be able to calculate how high the coverage should go if you adjust for inflation at around 3% per annum.
In addition to the cost of the funeral, you should also look into other costs that may arise such as medical bills and any outstanding debts you may have in this regard. Although you won’t be able to come up with completely accurate figures at this point, you should be able to calculate a ball-park figure to then go ahead and make a decision for your plan.
How to Get Burial Insurance
So you have worked out how much coverage you will need in a burial insurance plan, what now? As long as you fall into the age categories we mentioned earlier, typically between 45-85, you should be able to get yourself a policy.
Years ago, the process of getting quotes from insurers took a long time because you would have to contact each one individually, tell them all of your details, and then see a quote in return. Nowadays, you simply need to enter all of your details once into an online life insurance price comparison site and then you will be given quotes from many of the top companies in the industry.