Should you consider burial insurance?

If you were to die tomorrow, would your family have the money to cover your funeral costs? Or will they be left scrambling to find the cash? The fact is, while nobody plans on dying unexpectedly, it can happen. And when it does, your loved ones will need to cover the costs - immediately.

What does the average funeral cost?

According to the National Funeral Directors Association (NFDA), the average cost of an adult casketed funeral in 2017 was $7,360.¹ If that price tag isn't staggering enough, it doesn't get any better. For starters, because the NFDA doesn't conduct surveys every year, this figure is a few years old. Moreover, it doesn't take into consideration the additional expenses associated with burial in a cemetery and the purchase of a headstone. The reality is, that once all funeral-related costs are factored in, the typical traditional funeral service can cost the average family closer to $8,000 - $10,000.

What is burial insurance?

Burial insurance (sometimes referred to as funeral insurance) is an insurance policy that helps cover the costs associated with your funeral so that your loved ones won't be burdened with the expenses. It can be used to pay for the cost of the funeral and burial, or any other final expenses such as outstanding medical bills.

How does burial insurance work?

According to the Insurance Information Institute, burial insurance typically comes in the form of a whole life insurance policy, with benefits ranging from anywhere between $5,000 and $25,000.² Generally, policies go through a simplified underwriting process, meaning that you may be able to buy a policy after answering just a few health-related questions on the application and with no medical exam.*

Who should consider burial insurance?

Your need for burial insurance depends on your individual situation. You might want to consider a burial insurance policy if:

• You have no other life insurance coverage in place
• You have limited savings with no other means to pay for your funeral expenses and outstanding debts
• You want a separate policy to specifically cover your final expenses

Burial insurance can be part of an estate plan and an ideal way in which to manage your final burial and funeral expenses.

 

*Burial insurance policies will differ between insurance companies and underwriting requirements may be different.

^1. http://www.nfda.org/news/media-center/nfda-news-releases/id/840/nfda-releases-results-of-2015-member-general-price-list-survey

^2. http://www.iii.org/article/what-%C2%93burial-insurance%C2%94

 

WEB.1516.06.15