Funeral insurance is a specially packaged life insurance policy mainly for adults age 65 and over. It is designed to be sold to people who probably have not taken care of this previously, and have now decided that it needs to be addressed.
Many people will put off the purchase of life insurance just because death is a very difficult thing for them to think about, and if they don’t have to deal with anything to do with it, then they don’t have to think about it. There is also the fact that life insurance, in general, can be a mystery to many people, which just adds to the reasons that many people do not deal with it.
But, as people get older, they start to lose their friends and people they know, and the real story about how a person has or has not been able to take care of their affairs comes out, and this is when many people start to consider their situation.
The average funeral in the United States costs in the range of $7,000 to $10,000, whether or not you are cremated. The fact of the matter is that there is more to a burial and a funeral than just planting your body or what is left of it in the ground.
The old wisecrack of, “Just throw me in a sack and toss me in a ditch somewhere,” just is not very realistic.
There is the cost for retrieving the body, cremation or embalming, casket, or urn, the extras such as a ceremony, a headstone, flowers, a preacher, and other items. Plus, there will probably be a dinner and guests which means renting a place to have the dinner.
These costs can vary, but an effective way to pay for all of this is to shop for a burial life insurance policy because it will always pay for these items at a steep discount.
Plus, the fact that you might have debts and taxes that are due and your loved ones will be obligated to settle up in these areas. Very seldom will anyone pay into a life insurance policy the amount of money that a beneficiary will receive upon the death of the insured.
Funeral insurance is simply going to provide the money to your beneficiary the moment you pass on. To make things simpler, you can also pre-plan your final arrangements and have the policy paid out directly to the funeral home to get things started once you are not here.
The biggest problem most elderly people have is that their state of health does not always lend itself to the purchase of life insurance. In order to purchase life insurance, a person has to be in reasonably good health, and that is not always the position of many elderly people.
So, this type of life insurance has some special provisions that help in this area.
First of all, the face amount, or the death benefits of these policies are usually limited, so the company’s risk is small per policyholder. The range of coverage is in the $3,000 to $25,000 limit.
Many insurance companies will then issue policies that will classify different health conditions and allow certain restrictions on policies based on the level of health a person is in. For example, a person who has moderate health issues such as blood pressure or ulcers might get a regular policy with no restrictions, but the premium is a little higher than normal.
However, if a person has had more serious issues such as heart trouble, but is on medication might get a policy with a waiting period of two years, and then after that period full coverage is available. If the person should die within that two-year period, the full amount of premiums will be paid back to the beneficiary, plus a nice amount of interest in the 10% to 12% rate per year.
In this way, people are able to get coverage, but the life insurance company is also able to offer insurance to just about everyone. The only people who are ineligible for these funeral insurance for adult’s programs are those who are in the hospital or in a nursing home.