Saturday, February 7, 2015

Burial Insurance Costs

And is even the least costly burial insurance a good buy? Be sure to compare it against term life or permanent life before you sign up.
Burial insurance is a type of life insurance marketed to seniors and their families that is used to pay for funeral expenses.
At various online independent agencies and insurance companies, you can get instant quotes on burial insurance policies that will give you a basic idea of how much this type of insurance would cost. Of course the rates that you are quoted, as they are based just on brief questionnaires, are not a guarantee. Before you sign up for anything, get a careful explanation of any policy you’re considering from an experienced professional.
Sample Costs
The prices quoted here are for a $20,000 policy for a 65-year-old male nonsmoker who lives in Florida. The three companies on the bottom of this chart say that they offer “guaranteed issue,” and Gerber and Kemper say they ask “no health questions.” These guarantees are a key reason burial insurance policies attract seniors who are concerned about being screened.
Monthly premium

SI _Provider Simplified Issue
Vantas Life
Gerber Life Insurance

Doing the Math
Is burial insurance a good buy?  Probably not, compared to other forms of life insurance that you can buy. Consider that the cheapest option listed here, Foresters, would cost $1,227.48 a year. If the 65-year-old lives for 20 more years, he would end up paying $24,549.60 in premiums for a $20,000 payoff.
Compare these figures to an automated quote from Prudential for a $100,000, 20-year Term Essential Life Insurance policy. The premium is $113.58 a month or $1,362.96 a year. If the person lives for 20 years he would pay in $27,259.00. If he dies while the insurance is in effect, his beneficiaries would get $100,000.
Not Underestimating Your Lifespan
The Prudential policy quoted above is for survivorship to 100 year of age. The company also offers a slightly more expensive option that insures you to 121. While that may seem laughable, keep in mind that a person who turned 65 in 2008 can expect to live, on average, until age 84.3 if he’s male and 86.6 if she’s female. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95, according to data compiled by the Social Security Administration.
Finding Help
On-line quotes are a convenient way to get a general idea of costs. It's wise to start your shopping that way so that you can get a sense of the marketplace. But most insurance companies offer a range of products with subtle but important differences among them. You're unlikely to pick up these fine-print differences by comparison shopping on your own.
An insurance broker who deals with multiple companies can help you find the best deal. Bring your research to a broker and search together for the best options for someone in your situation. One possibility is a term life insurance policy with a clear renewal process if you outlive the term. Another is a permanent life insurance policy.
Some policies accrue cash value and can be expanded to cover accidents and disability. One possible approach: Instead of choosing a benefit amount, tell the insurance broker how much you’re willing to pay in monthly premiums and ask for the best deal for the money. See Burial Insurance Vs. Life Insurance.
The Bottom Line
Don’t be wooed by “easy” insurance. Take the time to research your options and see what kind of deal you can get.
Even if you have health problems, you may still qualify for term or permanent life insurance and avoid the higher prices of “guaranteed issue” burial insurance policies. An independent insurance agent who deals with multiple companies can help steer you to the best buy for your situation. Ask the agent for quotes on a variety of insurance options that could cover funeral expenses.

Let Insurance Be Your Peace of Mind
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