Burial insurance is one of the most important types of life insurance. In fact, it’s the only kind of life insurance that focuses on paying for your funeral. However, there are some common questions about burial insurance that people have. We’ll try to answer your most frequently asked questions about burial insurance below!
Burial insurance is a type of life insurance policy that covers the cost of a funeral. You may have also heard it as “death coverage,” “funeral insurance,” or “final expense coverage.”
Burial insurance policies have many similarities to other forms of life insurance. After all, experts have designed them to pay for your final expenses as well as help with any debts you leave behind. Burial insurance is only meant to cover your own funeral costs. However, other types of life insurance that provide protection for your loved ones in case you die.
The average cost for an adult funeral in 2020 was around $7,500. Dallas was highest at around $8,000 while San Francisco was lowest at $5,100. However it could be more or less depending on where you live and what kind of services you want to include. Also note that when it comes to burial costs this price includes cremation. This generally runs about 1/3rd less than traditional burial services.
How much does an average funeral cost?
As we discussed above, an average funeral costs $8,000 if it includes a burial. The average cost of a funeral that includes cremation is about $7,000. Additionally, the average cost of a burial plot is $3,000 while the average cost of a burial casket is $2,500. A vault to go under the casket can add another $1,500 to your expenses.
What happens you can’t afford a funeral?
If you can’t afford a funeral, there are options. First, check with your state or local government to see if they offer assistance for funerals. Specific groups, such as veterans may have access to such funds. You may also want to take out a personal loan from a bank or credit union in order to pay for the funeral services.
Have you perhaps prearranged your funeral through a funeral home? What if they end up having to step in and cover the cost of the service on your behalf? Then, they will typically do so by charging an additional fee called “mortuary charges” or “final expense fees.”
What is a death benefit?
A death benefit is the amount of money a life insurance company will pay out when you die. It’s usually paid out to your beneficiaries. If your policy has a death benefit, it’s often the case that no taxation applies. Make sure we check what applies to you.
How much does Social Security pay for a funeral?
What you should know: Social Security may pay up to $2,000 for funeral and burial expenses. This amount is not enough to cover the costs of a funeral, which can range from $7,000 to $8,000. However, it’s a considerable contribution.
The bottom line: If you’re not prepared for your final expenses, you may need Social Security benefits to help cover them.
Is a beneficiary obligated to use my life insurance payout for a funeral?
It depends. Some policies require the beneficiary to use their payout for funeral expenses, but others allow them to use the money for any purpose. If your policy does not require the beneficiary to spend their payout on a funeral, they can do whatever they want with it. This is why choosing an appropriate beneficiary is so important. Only then you make sure that your beneficiary will follow your wishes and no mismanagement takes place.
Do I still need burial insurance if I’m young?
This question is one of the most common ones we hear. And it’s a good one! The answer usually depends on your situation.
If you are single or childless and have no dependent upon your income, burial insurance may not be essential for you. At least not at this point in life. However, let’s say you have a spouse or children to support. Their financial needs most probably change over time depending on their stage of life (such as having children). Then it may be wise to consider purchasing some type of death benefit that would help them out. Your relatives will definitely appreciate any financial aid during these times of mourning.
The key thing here is for each person to figure out what makes sense for their unique situation. You can do that by talking with an experienced agent who can give useful advice. After all, individualized knowledge and experience with many different types of people over many years is irreplaceable.
Whether you’re young or old, it’s important to protect your family from the financial burden of a funeral. You can get burial insurance even if you have other life insurance policies or if you don’t have time to shop around. There are many providers who offer affordable plans that cover everything from cremation to burial costs. So, what are you waiting for?
We hope that you now have a better understanding of how burial insurance works. Do you wish to learn more about burial policies? Or want help finding one that meets your needs? Feel free to contact us today or check out our other articles on this topic.