Other Insurance Options: Comparable Prices, Greater Benefits
Here are some reasons why burial insurance may be a terrible investment. First, the lack of a medical exam indicates that you are being covered as part of a high-risk group of people.
Despite this, many people, especially those with health difficulties, are eligible for plans that provide a better value regarding the payout your beneficiaries will receive about the premiums you pay. Don’t believe that your poor health prevents you from obtaining other types of life insurance. Consider dealing with a broker who sells a variety of life insurance policies (not just ultimate expense) to determine your eligibility.
Term life insurance is sometimes mentioned as an option, but because it expires after a certain time, it may not provide adequate coverage for someone who wants to ensure that their heirs receive cash when they die. If you die after the expiration period, your heirs will not get a settlement. As the name implies, permanent life insurance is guaranteed to cover your death at any age as long as you pay the premiums. Term plans may also be unavailable to older persons, or the premiums may be too expensive.
Burial insurance is intended for a certain group of people. It can be a valuable product if you are that type of person. The problem with burial insurance is that certain insurers, brokers, and salespeople are more concerned with making a sale than matching their customers to the optimum insurance plan for their scenario.
The typical death payout of burial insurance coverage is $5,000 to $25,000.
The Savings Account Alternative
If you are concerned about funding and carrying out your requests for burial, cremation, and a memorial ceremony, consider opening a savings account or trust and designating the person who would ordinarily pay your final expenses as the beneficiary. This money can be withdrawn promptly if needed after your death, saving your survivors from having to wait for an insurance payout or probate.
You might also look into prepaying funeral charges at the funeral home that your family usually goes to. This, however, entails putting money into a business that may or may not be profitable or well-run by the time your family wants to plan your funeral. Again, a savings account or trust allows us greater flexibility.
It is equally critical to discuss and document your wishes with your family. Planning your funeral is just one aspect of a larger estate planning process that ensures your loved ones know what you want and that your assets are distributed to the appropriate individuals when you die.
