As a specialist in the burial insurance business, people often ask, “What is the BEST kind of burial life insurance?”
That’s a great question. And more likely than not, you see numerous options for burial insurance for seniors every single day. For example, there are endless advertisements on TV from Colonial Penn, MetLife, Mutual of Omaha, and Physicians Mutual. And don’t forget all the junk mail that you receive daily from a variety of burial insurance companies.
Sometimes, when there are too many options, it’s downright confusing, and can cause people who really need a burial insurance policy to not do anything at all.
In the following article, I will go into detail about different options for burial life insurance coverage. Naturally, the goal is to give you as much information possible on how different final expense burial insurance policies work, as well as how to better examine what your best options are for burial life insurance coverage.
Term Life Burial Insurance
The first final expense burial insurance for seniors option I’ll cover is what’s known as term life insurance. Perhaps you’ve received mailers from AARP or Globe Life Insurance. Upon reading the letters they send, many times you’ll discover these companies only offer coverage up to and no further than a certain age in the future. This is what we call “terminating,” or term, insurance. The key word is TERMINATING.
What’s the problem with term life insurance?
First of all, term life insurance for final expenses do not appropriately match the primary reason people buy burial insurance for seniors. And here’s the truth – the primary reason behind buying a burial insurance policy is to guarantee a death benefit, no matter at what age you pass away.
Why do you need your burial insurance’s death benefit guaranteed? Because death is uncertain! You WILL die, guaranteed!
Therefore, getting a term life insurance policy for burial insurance begs the question,
“Why take the risk of not having coverage when you need it?”
How A Term Life Insurance Policy For A Senior Went From $50 to $350 A Month!
Several years back as a new burial insurance agent, I met a very nice 82 year-old lady. She worked in the cleaners her entire life, and was still working 20 hours a week dry cleaning. Her health was great and all was well.
Regarding her burial insurance policy, she had a plan from a very well-known company. Her plan was a term insurance plan. And while this plan didn’t cancel until she reached 90, the term insurance premium increased annually for the past 12 years.
What started off around $50 a month for her term insurance was now $350 a month. Nevertheless, she could afford it since she worked part-time and had drew Social Security.
How Burial Life Insurance Can Become Affordable Overnight
Unfortunately, her health took a change for the worse. The doctors recommended open heart surgery to fix a blockage. And since she was 82, the doctor ordered her into retirement.
Since she lost her income from her part-time job, she was now in a tough position. Bills had to be paid, and there was no room to afford a $350 term insurance premium. And to add insult to injury, she could get to replace her term insurance policy with immediate coverage with another burial insurance policy option. Due to her recent open heart surgery experience, her only option was a 2-year waiting period burial insurance policy (which will discuss in more detail shortly).
This sad story happens daily. People do a good job of having burial insurance policy in place. However, they don’t understand how it works. And usually it’s because the final expense burial insurance agent didn’t explain it. Even worse, the agent may have purposely hid the facts from them.
Now well into retirement, this lady doesn’t have either the means to pay for expensive term life insurance, or the health to qualify for something better. Whatever you do, don’t be this person.
Permanent Burial Insurance Policy Options
Regarding burial insurance for seniors, the opposite of a term insurance policy is a permanent policy. A permanent burial insurance policy is permanent as long as you pay the premium. For your whole life, regardless of how long you live, you receive guaranteed coverage to provide a specific death benefit payable to the beneficiary of your choice.
Like myself, burial agents commonly recommend permanent burial insurance for seniors to those looking for final expense coverage. Why? Because the design of the policy matches the reality of the problem.
Guarantees In Your Burial Insurance Policy
As mentioned earlier, a burial insurance policy that does NOT cover you past a certain age doesn’t do you any good. With a permanent burial insurance policy, as long as you pay your premium, you have coverage. And you’ll never be in a situation where you outlive it! When you do pass away, assuming the premiums are current, the policy pays the death benefit as directed in the policy.
Within the category of permanent coverage, there are several different options. Your goal is to find a policy you or your loved one (if your a spouse or child shopping for burial insurance on a parent) can qualify for.
What follows is a breakdown of the different options for permanent coverage.
Guaranteed Acceptance Burial Insurance Policy
First of all, you have guaranteed acceptance whole life insurance.
Guaranteed acceptance insurance means that the policy will be issued under any circumstance, regardless of health. Beyond age limits, the company cannot decline you. Simply put, if you have a pulse and can sign your name, you’re approved. This is a great policy option for people who are otherwise uninsurable, like those with Alzheimer’s, current cancer (those who have been cancer-free for over a year have better options), and kidney dialysis.
As you can imagine, there are drawbacks. Let me explain. Generally speaking, a guaranteed issue burial insurance policy provides first-day 100% full coverage for accidental death only. Death caused by natural reasons are not fully covered for minimum of the first 2 years.
Here’s the truth. Most seniors die from natural reasons, and not accidental death. Therefore, if guaranteed acceptance burial insurance for seniors is your only option, you won’t have natural death coverage until 2 years after the effective date of the policy.
Why would one get a guaranteed issue burial life insurance policy?
The main reason to buy a guaranteed issue policy is because one has tried other options first. They’ve tried to get full coverage elsewhere and have simply not qualified for it. Therefore, a guaranteed acceptance life insurance policy is the last choice you should pursue.
The big problem with no questions asked life insurance is this: it is commonly offered to the public as the first choice for burial insurance! Shockingly, the most common options available for burial insurance for guaranteed acceptance insurance.
You should highly consider talking with a burial life insurance agent that may have the option to provide you full first-day or even partial first-day coverage. Why? Because death is uncertain. And while many of us assume we’ll live a long time, we all know deep down that we’ll never know our final day. Our time is limited. We don’t know when it’ll be, and we have to be prepared regardless, which brings us to the next option: full coverage burial insurance for seniors.
Burial Insurance With Whole Life
The ideal scenario is to qualify for a day-one, full-coverage burial insurance whole life policy. Luckily, this is not a very difficult process.
However, not all burial insurance whole life options are equal. Let’s break it down further, and explain the difference between working with a broker versus a captive agent.
If you are beholden to one insurance company or agency, then you are a “captive” agent. In the world of burial insurance, the captive agent typically represents only one company. Since captive agents’ options are limited to one company, they must only offer one coverage option to you, the client.
And while that may sound fine, the problem is this: one option is usually not a good option for the vast majority of people!
If working with a captive agent is not in your best interest, what is?
You want to work with someone who offers more than one choice for burial life insurance. Why? Because with a captive agent, you lose, either on quality of coverage or pricing.
Let’s compare buying burial insurance to buying groceries. When it’s time to shop, would you go to a store that only sells one type of meat, one type of bread, and one type of vegetable? Or would prefer a store with a variety of options for food at better prices?
It’s the same with burial insurance. To clarify, if your agent only offers one type of product, you’ll most likely end up paying more for less coverage. Whereas if you worked with an independent agent, you may have had a much higher chance for the best combination of pricing and value for your burial insurance.
How To Get Low-Price, High-Quality Burial Insurance
So, what is the solution? The best option is to work with an independent agent. An independent agent is somebody who offers the best burial insurance policies available. And “best” defined as a variety of competitively priced products that have flexible underwriting. An independent agent is somebody who doesn’t just work with one insurance company. They work with many burial insurance companies. And they take the client’s needs and goals into consideration when helping them select a burial insurance policy.
Many times, a person working with an independent burial life insurance agent will get more coverage and save hundreds of dollars year! Also, the burial insurance policy will often cover issues that the captive agent could not cover.
For example, common issues that can be covered with an independent burial insurance agent include conditions such as COPD, heart history issues, diabetes, cancer, kidney and liver problems, neurological problems, and mental health problems. Unfortunately in many cases, captive agents can only offer you high-priced guaranteed acceptance policies. However, an independent agent may be able to offer you full first-day coverage policies!
Ultimately, if you think burial insurance whole life is right for you, find an independent agent who shops the major companies for you to find you the best price and the best coverage.
Other Burial Insurance For Seniors Options
There are other options for burial insurance for seniors, beyond term life and whole life options. Read below for more information on other types of burial life insurance options, chiefly designed for very healthy applicants, and those who have more means to pay higher premiums.
Pre-Need Burial Insurance Policy
The first option is pre-need insurance coverage.
Pre-need insurance is a burial insurance policy purchased through a funeral home. Pre-need policies are a bit different than burial insurance policies. First, pre-need plans are designed to lock in your rates for all the items associated with your funeral. Items like your casket, cremation expense, the service itself, etc. are locked in and guaranteed.
The policy also is a paid-up policy. This means you pay premiums over 5 to 10 years before paying it off completely. If death occurs prior to you paying the policy off, in most circumstances the policy pays the death benefit to cover the funeral expense of death. With pre-need burial life insurance policies, they act as an insurance policy, but also has the added advantage of combating the inflationary costs of funerals.
The pros a pre-need funeral policy is that your premiums will eventually end, and you’ll pay the funeral off completely. Many people opt for a 3- to 5-year payoff plan. However, the less financially able choose the 7- to 10-year payoff plans.
Pre-Need Life Insurance Can Be VERY Expensive!
The cons of pre-need plans is that they are generally 2-3 times as expensive. And while many people like pre-need policies, they cannot comfortably afford it.
To make matters worse, when the premiums paid into a pre-need policy are added up, the total exceeds the actual cost of the funeral.
I’ve seen many pre-need policies where premiums paid in are more than DOUBLE than the cost of the funeral. Also, I’ve seen instances where the total cost of the funeral was $8000-$10,000 whereas the actual premiums paid in was $15,000-$20,000!
In my mind, these plans are problematic for most. Certainly, fending off inflation is great. But one must believe it’s worth paying nearly double the current price for a funeral to do so. I think not!
Pricing for funerals has remained pretty stable since I’ve been in the business back in 2011. And as long as that’s the reality, I don’t see pre need insurance as an option, unless you pay it up in under 5 years or less. At those levels, the premiums paid in are more sensible.
The biggest advantage to pre-need insurance is paying it up. Luckily, you have access to the same paid-up options with a burial life insurance plan. And in many cases, the premium for a paid-up burial insurance policy is much lower. Also, the underwriting regarding burial insurance for seniors is more flexible than pre-need insurance plans. So consider working with an independent burial life insurance agent if you like the paid-up concept.
Guaranteed Universal Life For Burial Insurance
Are you in good health and interested in burial insurance policy sizes in excess of $25,000 in coverage? Consider a guaranteed universal life insurance policy.
The idea behind a guaranteed universal life insurance policy is similar to a burial insurance whole life plan. However, the biggest difference is minimal access to cash value. And the reason for this is that a guaranteed universal life plan maximizes the amount of death benefit payable. In return, you see limited cash value access.
I only recommend guaranteed universal life insurance if someone is looking for a substantial amount of coverage. The applicant also needs to be in very good health. Underwriting is a bit tighter, and the client needs to clearly understand the lack of long-term cash value access.
Nevertheless, guaranteed universal life insurance plans are great for people who want a large death benefit.
Summary On Burial Insurance Options
Now you must ask, what is the best course of action to pursue?
Start with an analysis of your needs. For example, what do you want to accomplish with your burial insurance policy?
Maybe you want only enough coverage to pay for your burial. Or, maybe you don’t want to leave a legacy to a child or grandchild. Furthermore, you may want to leave a nice death benefit to replace your family’s income. Establish what your personal goals are, then select a burial policy above that best fits you.
For most people I work with, a burial insurance whole life product is the best coverage option. Why? Burial insurance whole life combines easier underwriting, competitive pricing, and permanent coverage without future rate increases.
Ideally, work with an independent agent to give yourself the best shot for first-day full coverage. If you end up only qualifying for guaranteed acceptance life insurance, make sure your agent shops other companies. But if they do and all you can get is a guaranteed issue burial life insurance plan, then highly consider keeping it.
Interested in learning more about burial insurance policy options for you or someone else? Call at 888-626-0439 or send me a message here.