Burial Insurance Information

Have you ever imagined what your funeral would be like? What would the service be like? Who would be there? Have you thought about the type of coffin that you would want? The flower arrangement? The music that would be playing? The location?

While these questions are indeed morbid, this does not diminish their importance. The simple truth is that everyone dies. In fact, the death rate is 100%. There are a myriad of reasons to start planning, and even paying, for your final arrangements before you need to. There is a product called preened insurance, also known as burial life insurance, which is specifically for this purpose. Burial insurance is something you should look at if you care about the financial future of your family.

Burial insurance is different from other kinds of insurance because everyone will eventually pass away. The advantage of burial insurance is that you can be in control, giving you the option to plan and pay for your final details.

“People aren’t buying this for the financial benefit, but rather to lock in and prearrange their funeral their way”. Whether it’s a velvet-lined casket or a particular type of service, it guarantees they’ll have the funeral they want,” says Kevin Gough of Conning & Co.

When buying burial insurance for seniors, or anything else for that matter, you must always do your homework. Burial insurance is no different. In fact, a string of burial insurance scams has been sweeping the nation which further highlights the need to keep your guard up and do some smart research. Recently elder people have allegedly been tricked into paying higher premiums than they actually receive in benefits. The problem is so serious that some states, such as Florida, have tried to pass legislation that would ban this practice.

Funeral prearrangement is not new and over the last 30 years more and more Americans have decided to start looking into burial insurance.

Funerals have traditionally been paid for by using trusts (money that is set aside to cover final expenses). Trusts are easy to form, however, you need to consider possible tax liabilities if you ever plan on moving out of your home state. Some people take a different route and buy “final life expense” insurance. This type of insurance has a small coverage limit ($100,000) and are designed to be used for burial expenses.

According to AARP, burial expense insurance is one of the big ticket items that Americans over the age of 65 buy. The average cost of a funeral today averages about $4,500-$5,500. Up to one third of that price is for the cost of the coffin alone. Also, if you opt for an in-ground burial then you should add another $2,400 to your bill.

Due to the fact that burial insurance costs are still rising, a $10,000 policy that you buy today may not cover the full cost of your burial when the time comes. In order to cover the cost you may have to use funds from your life insurance and not just a national burial insurance company. The director of Homesteaders Life Co says, “When that lump sum goes to the family, they will spend it on whatever they have to. They shouldn’t have to spend it all on the funeral, but that might be the case. If they are grieving, they may not make the most informed choices, perhaps spending more than they should”.

If you take a minute to look at the preened industry as a whole then you will see why they are not feeling the effects of this recession. Baby boomers are getting older and are approaching the end of their lives. As a result, burial insurance and burial related products are in great demand. This fact coupled with the reality that burial costs continue to rise means that the burial industry will be doing just fine for years to come.