Peace of Mind Knowing Funeral Costs are Covered
Having a plan in place to cover funeral or burial expenses ensures that you have some control and choice in what happens after your passing. Taking steps today to plan for the future will ensure that you and your loved ones have the peace of mind of knowing that funeral costs are covered. Read on to learn more about the benefits of having a funeral insurance plan in place and to learn which companies offer the best plans.
What does funeral insurance cover?
Funeral or burial insurance is a type of life insurance that helps cover end-of-life costs, including insurance for burial, cremation, memorial, and/or funeral costs. Funeral insurance can also be used to pay off any outstanding debts you may leave behind from credit card debt, mortgage, medical debts, etc.
You will pay a monthly premium based on how much coverage you would like. You will also name a beneficiary who will make decisions about how to spend the money from your plan. Some plans may ask a few health questions, but generally, rates are determined based on sex and age and don’t require a health exam.
Why should you have funeral insurance?
Having funeral insurance ensures that your loved ones won’t be faced with expensive funeral costs upon your passing. According to the National Funeral Directors Association, the median cost of a funeral with viewing and burial was $7,848 in 2021. Without burial insurance, this cost is left to your beneficiaries. Having a plan in place means that your beneficiary can make a claim to your insurance provider to help with funeral costs and other expenses related to end-of-life care.
These plans are appropriate for older adults who may have significant health conditions and who have not already paid into a life insurance policy that would cover funeral expenses. For younger adults, choosing a life insurance policy is often a better choice as it offers more coverage and better value over time.
The pros and cons of having funeral insurance
- The cost of funeral insurance is often less than life insurance as it only covers the cost of end-of-life expenses. This can be useful for those who cannot afford an expensive life insurance plan.
- Burial insurance can sometimes be used to pay off any debts you may have left behind (ex. credit card debt, legal debt, medical debt, or a mortgage).
- Funeral insurance plans typically don’t expire, whereas life insurance plans can expire if you outlive the coverage term.
- Health conditions may make you ineligible for many life insurance plans, whereas funeral insurance typically has fewer criteria for acceptance.
- Burial insurance does not cover any other expenses, particularly if you are leaving behind family members who you would like to financially support after your passing. This is the main difference between burial insurance vs. life insurance. For this reason, it is often not the right option for those with young families as it does not provide any additional support to spouses or children for expenses such as a mortgage, tuition, and loss of a dual income.
- Funeral insurance plans also get more expensive the older you are, so to get the best rates, it is best to start paying into a plan earlier in older adulthood.
Where to purchase funeral insurance?
There are several types of plans available from several different providers, and it is important to do your research to find the plan that will work best for you. Investopedia has done an excellent job of reviewing 91 insurance companies, looking at 54 different features. They have rated the following four companies as the best options for burial insurance in 2022.
Mutual of Omaha
Mutual of Omaha was rated the best overall funeral insurance plan of 2022 by Investopedia. You can apply online to receive coverage up to $25,000 or apply through an agent for coverage up to $40,000 and other possible benefits.
There are three features of Mutual of Omaha insurance plans that stand out from the others. To begin, they offer funeral insurance up to age 85, while many other insurance companies have a younger age cut-off. Secondly, they offer some plans without a graded death benefit (a graded death benefit means that your beneficiary will only receive a portion of your insurance payout if you pass away within the first few years of your plan).
Lastly, Mutual of Omaha also offers some plans with a terminal illness rider (this allows your beneficiary to access up to 50% of your coverage if you pass away within 12 months of diagnosis of a terminal illness).
Learn more about Mutual of Omaha’s Living Promise (Funeral Insurance) Plans.
SBLI Life Insurance
SBLI Life Insurance offers funeral insurance plans with up to $35,000 in coverage. Investopedia notes that SBLI Life Insurance has fewer customer complaints than Mutual of Omaha. With SBLI, you can apply online and receive confirmation right away if you have been approved for burial insurance with or without a graded death benefit. Unfortunately, if your plan includes a graded death benefit, that period lasts for three years (one year longer than most other funeral insurance plans).
Learn more about SBLI Life Insurance Final Expenses Insurance.
Investopedia ranks TruStage as the best insurance company for guaranteed-issue funeral insurance plans. TruStage has a simple application process that is entirely online and has no health questions. With their plans, the maximum amount of coverage for funeral costs is $20,000, and all plans include a two-year graded death benefit.
Learn more about TruStage Final Expenses Plans.
State Farm is a trusted insurance company who have proven to be trustworthy and consistent in paying out insurance, with low customer complaints, according to Investopedia. The highest coverage they offer is $10,000, which is much lower than the companies listed above. Additionally, you will have to apply for a plan through an agent as State Farm does not offer an online application.
Learn more about State Farm’s Final Expense life insurance.
Knowing that you have options for funeral or burial insurance can help alleviate some of the stress of planning for your end-of-life expenses. If you haven’t already paid into a life insurance policy, a funeral insurance plan may be a better option for you. Take the steps today to ensure that your loved ones won’t be faced with expensive funeral costs and instead can focus on honoring your memory.