Why Burial Insurance Is an Important Investment

5 minute read

By HealthVersed

Insurance can help to make burials more affordable by dividing mortuary costs across several decades. Finding the right policy requires a little research. Fortunately, you can find the best burial insurance policy with a search online.

Whether you plan to get buried or cremated, you can buy insurance ahead of time that will cover the cost of your funeral without burdening your estate or family members. Some burial insurance providers even work directly with funeral homes.

What Is Burial Insurance?

In a world where 65 percent of Americans have less than $5,000 in their bank accounts, paying for the costs associated with a burial and funeral can be difficult. Many people die unexpectedly from a stroke, heart attack, car accident, or other cause of death that cannot be planned for in advance. If you pass away without having the financing secured for your funeral, your family could face the nightmare of having to rush to come up with the money to cover your mortuary services. Insurance companies, therefore, offer burial insurance to divide the cost of your funeral services into affordable monthly payments.

With burial insurance, you simply pay a monthly or yearly fee to maintain your policy. Your family members or a prearranged funeral home will, then, receive the funds necessary to cover your burial costs when you pass away. Most plans do not charge a down payment or ask for a deductible when you die. Insurance costs vary dramatically by age, but plans covering $10,000 in funeral expenses can be as little as $15 to $30 per month.

The average burial costs about $10,000 while an open-casket funeral can add another $5,000 or more to your funeral bill. Prices can be as affordable as $1,100 for a direct cremation but adding funeral services can increase costs substantially.

Most people get insurance policies covering $5,000 to $20,000 in mortuary costs, so insurance rates can vary from a few dollars per month to over $100 per month depending on your age, gender, credit score, funeral budget, and other factors. Some burial insurance providers partner with certain funeral homes to reduce costs. Furthermore, many funeral homes have a preferred insurance provider that can offer favorable insurance rates on future services from their establishment.

How to Secure the Cheapest Rates

Although burial insurance is inexpensive on a monthly basis, you should still shop around to save money on your policy. If you are buying insurance at a young age, it makes sense to find a great deal because the small monthly payments you make over several decades can add up to a significant amount of money.

Most importantly, some insurance plans offer fixed payments that do not rise with inflation or as you age. Finding a cheap burial insurance plan today can, therefore, be an excellent investment when you plan ahead.

Conduct Thorough Research Before You Begin

You should carry out your own research prior to searching for the right burial insurance plan.

Begin by talking to your doctor to discuss the quality of your health relative to other people who are in your same age group. You can expect better rates when you live a healthy lifestyle and have no history of serious medical conditions. Your credit score can also impact burial insurance rates, so you should get a credit report from the three major credit agencies recognized by the Federal Trade Commission. Finally, you will need to decide exactly how much insurance coverage you will need. Talking to a funeral director or family member who has organized a funeral in the past can help you decide on a realistic budget for your mortuary expenses.

Use Comparison Shopping

Many people shopping for burial insurance make the mistake of assuming that all insurance providers charge similar rates. Although profit margins in the insurance industry are generally less than 10 percent, the reality is that rates can vary widely. Buyers who fail to do their due diligence can easily get tricked into buying from an unethical provider that earns enormous commissions on insurance plans. Likewise, you can save a lot of money when you shop around to find a provider that is offering substantial discounts.

Before agreeing to move forward with a particular insurance plan, you should be sure to do thorough comparison shopping to find the best deal available.

Pool Costs with Relatives

Insurance companies are generally willing to reduce their prices when you offer to buy in bulk. For health insurance, for instance, employers ordinarily negotiate rates for their employees that are dramatically cheaper than what a single individual could buy on their own. Large extended families can get similar discounts on burial insurance by coming together to purchase a group plan. Some people have also been able to get similar discounts by pooling costs with co-workers, neighbors, or community organizations.

If you can find a way to bring a large group of people together to purchase a burial insurance plan, you can usually find astounding rates.

Talk to a Funeral Director

When making a significant purchase, it often makes sense to talk to an expert.

Funeral directors work with insurance companies on a weekly basis, so they tend to know how to get the best deals. Most funeral directors are happy to help you find the cheapest rates on burial insurance when you are willing to use their funeral home in the event of your death. Some funeral homes are even willing to offer their own burial insurance plans that can guarantee you a proper burial at no cost when you pass away.

Whether a funeral home partners with a bank or offers its own financing, the bottom line is that you can get some great deals from these establishments when you are willing to shop around.

Secure Cheap Rates at a Young Age

According to the latest actuarial life table from the Social Security Administration, a person’s annual odds of dying are less than one percent until 59 years of age. Additionally, below 42 years of age, your annual odds of dying are less than .25 percent. Many people can, therefore, lock in burial insurance at very inexpensive rates when they begin their policy at a young age.

As you get older, the cheapest fixed rate that you will be able to find on a new funeral insurance policy will continue to increase with each passing year. Try to lock in cheap rates on a lifetime plan as soon as you can so that you can save money on your future funeral.

Choosing the Right Burial Insurance Plan

Many people are understandably uneasy about planning for their own death but taking the time to identify the right insurance plan now can save you a significant amount of hassle in the future.

When you are still healthy, you can plan ahead with a clear mind while also reaping the benefits of an advantageous insurance policy. Additionally, burial insurance can act as an important investment by leaving your heirs unburdened with the necessity of using your remaining assets on your burial and funeral services. The best path forward is to begin your search for burial insurance by conducting thorough research online to find the plan that is right for you.