We don’t like to talk about death very often, therefore we’re often surprised by how much everything can cost. Headstones, flowers for the funeral, a casket or urn, labor fees to dig the burial site or run the cremation services—all of it adds up. Losing you will be hard enough for your loved ones, so if possible, you’ll want to help them avoid any financial stress surrounding your death. This is where burial insurance comes in.
What is Burial Insurance?
Burial insurance is a type of life insurance policy that covers burial, cremation, and/or funeral expenses through a “death benefit,” usually ranging anywhere from $5,000 to $25,000. You might think $25,000 is an awful lot, but there are a lot of potential expenses that could accompany your death, and a burial insurance policy can cover more than just you; it can apply to anyone or everyone in your family.
Burial Insurance Coverage
Despite its name, burial insurance can be used even if you choose not to be buried; a more accurate term for it might be death/funeral insurance. Over 50% of Americans choose to be cremated, and even though cremation does not require all of the costs of burial, your loved ones may still wish to perform a funeral or memorial service. Whether you choose to be cremated or buried, burial insurance is intended to cover any costs following your death, including:
- Casket or urn
- Cost of cremation
- Cost of embalming
- Headstone
- Hearse or other vehicles necessary for the funeral service
- Grave plot
- The cost to dig the grave
- Flowers for the funeral, memorial service, or headstone
If I Have Life Insurance, Do I Need Burial Insurance?
This is a great question. The answer is maybe. It really depends on your situation and how you would prefer your life insurance to be used. It is possible for you to mention in your will that you would like your life insurance to be used for your death expenses. However, if you have set aside just enough money in life insurance to take care of your loved one’s immediate needs, there probably isn’t enough extra to cover your death expenses. In that case, a burial insurance policy is recommended.
Another alternative to burial insurance is pre-arrangement. If you know where you would like your funeral to take place, or if there is a family plot you know you want to be buried in, many funeral homes and cemeteries accept pre-payment, and you can pay for your headstone, urn, or casket in advance as well.
However, if you don’t have that kind of money right now and would be more comfortable paying a weekly or monthly premium, burial insurance is the best option for you.
3 Main Types of Burial Insurance
1. Pre-Funded Funeral Insurance
This is similar to pre-arrangement because it is associated with a specific funeral home or crematorium, but it can be paid in installments over a few years. This tends to be the most expensive option.
2. Final Expense Insurance
This insurance is not linked to any particular death service provider, and you can buy it as term life insurance or as a whole life insurance policy.
3. Burial Insurance
Similar to final expense insurance, burial insurance is not associated with any one funeral home, crematorium, etc., and it can be a term or whole life insurance. The main difference is that burial insurance is usually anywhere from $5,000 to $25,000. Other forms of life insurance can cover much greater amounts, but the premiums will also be higher.
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