We take care of the financial issues circumnavigating our family, those depend on us, and of course, us. Unfortunately, we are bound to take care of a few obligations when we’re no longer around.
You can neither escape death nor the expenses that follow after the funeral. So, how do you meet your burial expenses? To address this afterlife issue, the insurance industry has some final expense plans.
Irrespective of the name and reputation, these policies are just variants of whole life insurance policies that are supposed to pay for certain expenses like the funeral, cremation, and burial.
No medical exam
Burial policies are quite unlike than its counterparts - funeral policies. The underwriting process that burial insurance involves is quite simple and the applicants just need to answer a few basic questions about their health. Significantly, a burial insurance never asks you to complete a medical investigation. Since the termination of the medical exam almost makes everyone eligible for a policy, the costs of burial insurance policies go up by as much as 20 times than a completely underwritten term life policy. According to most experts, it’s the unhealthy mass who usually get attracted to burial policies, and hence, they tend to be expensive. If you’re healthy, you can opt for better deals - policies that are fully underwritten. For instance, a 60-year-old might pay $5 for each $1,000 worth of coverage for a 20-year term life policy or $200 a year for $50,000 worth of coverage. However, if it’s a burial coverage, the same person might pay $20-$30 for $1,000 worth of burial policy or $100 to $150 a year for $5,000 in coverage. If you’re sure that you’re going to pass on in the next 5 years, this might work out. If not, you should keep your money somewhere else so that it may grow. Usually, burial policies are opted by policy owners as last resort when they find that they can’t qualify for term life. Else, most go for an accidental death policy and some final expense. However, just because the underwriting process is simple, burial insurance isn’t a sure shot. Your application can be rejected if you disclose things like cancer, drugs usage, or hospitalization for more than 20 days during the past year.Do you have a better alternative?
Once you’re approved of a policy, you’re usually subject to a 2-year contestability and suicide clauses. During this time, the insurer has the right to investigate and fight a claim. For instance, if someone is aware that he or she is suffering from an incurable disease, buys a policy, and passes away within a year, the insurer will investigate the veracity of the claim. Although burial insurance policies appeal to most of the population with limited means who otherwise have no other option, most industry experts see such kind of policies as of low stature and value. It’s the less educated and people from low-income groups who tend to buy this predatory kind of insurance, according to the experts. As per industry professionals, it’s better to try and purchase an underwritten term life policy than going after burial insurance. Saving the money yourself can yield a better return than putting into a burial policy.Blog Category