Central Florida Insurance & Loan Rates

Burial Insurance, AKA Funeral Insurance, AKA Final Expense Insurance as well as many other terms is simply a smaller life insurance policy to pay any final expenses when someone dies; funeral expenses, credit card debt, etc.

Policies usually range from $5,000 to $25,000 and can be purchased at almost any age.

What is different about Final Expense Insurance compared to Term Life Insurance is that almost anyone can buy Funeral Insurance, no matter how bad their health is.

The way the insurance company makes sure they stay in business is to limite the policy benefits for 2 or 3 years.

If you are in poor health and purchase a final expense policy, the policy will only pay out limited benefits in the first 2 or 3 years (depending on the company).

Usually, if you buy a final expense policy and die within the graded benefit period (the 2 or 3 years) your heirs will only receive the premium you paid plus interest (usually around 7%-10%).  After the 25th or 37th month, you would be paid the full amount of the policy.

These types of policies are commonly sold on television by Alex Trebek for Colonial Penn and AARP.  No Health Questions Life Insurance is the typical pitch.

These types of policies are more expensive than ordinary term policies, but they are good for people who would not otherwise qualify for a life insurance policy.

It all depends on your financial responsibilities and your family’s needs.

Generally, people need more life insurance in their younger years.  If you are married and have children, if one of the parents died, it would create financial hardship on the surviving spouse.  Mortgage payments, car payments, credit card bills, college tuition, etc.

If you are independently wealthy, you don’t NEED life insurance, but it can also create tax benefits for your estate to have life insurance.

Once you get older, your life insurance NEEDS tend to get lower.  Although this is common, it is not always accurate.  If you retire at 65 with a $300,000 mortgage, can your spouse pay all of your bills with the income they would receive after you die?  Remember social security payments for your spouse may go up if you had a higher benefit, but the whole amount they were receiving would disappear from the budget.

If your house is paid off, kids are all out of college, and you have relatively no debt, you may just need burial insurance which is also known as final expense insurance.

You buy $10,000-$20,000 in Final Expense Insurance to pay for funeral expenses, maybe any credit card debt, or a really cool casket: