The Life and Health Guru - Answering Life's General Insurance Questions

Burial Insurance - What You Should Know About Burial Insurance

More and more individuals have determined to take charge of their own end of life expenses by purchasing burial insurance for their families.  Burial insurance provides a way for the deceased to assist in the expense of their funeral, and to help ease the burden of their passing.  This type of prepaid burial insurance has allowed families the opportunity to grieve over the loss of their loved one without having to shoulder or worry about the financial burden their passing has required.  It is one way to provide comfort for your family from beyond the grave.

Why Is Burial Insurance Necessary Or Important?

More than one family has been hit by sticker shock when the daunting task of preparing a loved one's funeral falls upon them.  Most people do not realize the great expense that funerals require of the family.

According to various websites around the internet (among them funeraltips.com) that gauge this sort of thing, the average funeral cost for 2009 is roughly $7500.  See the next section of this article for more information on the various costs associated with a funeral.

This $7500 is often a sizable and difficult amount for the family of the deceased.  To assist in paying for this necessary expense, many insurance companies now offer a life insurance product called burial insurance, or final expense insurance.  For a very reasonable premium, the deceased (or their family members) may "prepay" for the expenses of the funeral.

Burial life insurance allows the individual to make period payments into an account that is then intended to pay for the funeral expenses upon the death of the account holder. This allows the family to pay with insurance the burial needs of their loved one.

Not only does this lift the burden of finding the funds to pay for the funeral, it also lessens the stress of this already difficult time.

How Much Burial Insurance is Needed to Pay For a Funeral?

As stated above, the average insurance need for burial is roughly $7500.  This number will vary greatly depending on the specifics of the funeral and burial.  Location can also play a significant role in determining the final cost of burial.  There are areas of the country that the burial expense will be much greater, as the availability of land is much less.

The plot of land can be anywhere from a couple hundred dollars to several thousand dollars (there is also the possibility of extravagance in burial plots that goes far beyond this average), and the gravestone can fall in a similar range.  The burial plot will often have a fee of several hundred dollars to open and close the grave as well.

The other fees that quickly add up are:

• Casket - the casket can be one of the most expensive items in the funeral, depending on the quality and style purchased.  Some caskets can range upwards of $10,000 or more.
• Funeral Director - the funeral director has an important role in the process, and handles all of the more unpleasant things that must be done.  He is there to give guidance, do the necessary preparation, and sort through the sea of documentation.  The funeral director will often place the obituary for the family as well.  As such, the funeral director's fee may be several thousands of dollars as well.
• Gravestone - the cost of the gravestone is also dependent upon the quality and design required by the family or the deceased.

The burial insurance is setup to anticipate all of the cost associated with the funeral.  These cost can best be estimated by speaking with likely funeral homes in the area of the family.  Determining beforehand the estimated cost of the funeral in your area will go a long way in determining how much burial insurance to purchase.

Types of Burial Insurance

There are a couple of different types of burial insurance, depending on the specifics of how you want the policy to function.

The two most typical types of burial insurance are: burial life insurance and pre-needs insurance.  Burial life insurance is generally just a small insurance policy that is design to function life a normal life insurance policy, only on a smaller scale and with a more direct purpose.  The death benefit is paid to the beneficiary upon the death of the policy holder, and the proceeds are then free to use for the expenses of the burial.

The pre-needs or final expense insurance can be setup to pay the proceeds directly to the funeral home.  Upon the death of the individual, rather than add the step of paying the death benefit to the beneficiary, these burial insurance policies pay to the funeral director established by the contract.  This can be convenient for family members that anticipate being too overwhelmed by the death of their loved one to have the mind to worry about these financial complications.

These final expense burial insurance policies are often sold by the respective funeral directors.  They will add up the estimated costs of the funeral and burial and suggest the insurance amount that would be appropriate to cover the costs.

Be cautious with this type of policy however.  End of life issues can leave you feeling vulnerable and out of control.  Be sure that you are paying a reasonable premium for the amount of "coverage" that you are receiving.  Burial insurance is meant to be a cost-effective supplement to your regular life insurance needs.  It shouldn't be a standalone policy on its own.

Burial insurance can be an important step to take for those individuals ready to approach end of life issues.  Carefully selecting and purchasing a burial insurance policy can provide your loved ones the peace and comfort that you cannot otherwise provide at your passing.

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