Burial Insurance, also known as final expense or funeral insurance has become very popular lately because of the TV advertising we’ve seen from several of the major insurers. Regretfully, most of these advertisements are from companies that push “guaranteed issue or guaranteed acceptance” insurance policies which are very expensive and should only be considered as insurance of last resort. Most of the advertisers are also known as direct writers which means they eliminate the advocacy of an independent agent and force the consumer to buy directly from the insurer.
In this article, we will strive to provide consumers (especially seniors) with the information they need about burial insurance so they can make an informed decision about their purchase of valuable life insurance.
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What is Burial Insurance?
Burial insurance is a life insurance policy that is purchased specifically to pay for a funeral and burial when you die. Some people know this type of policy as final expense insurance and others know it as funeral insurance.
Whichever way you refer to it, a burial insurance policy is typically whole life insurance with a death benefit between $3,000 and $50,000. In almost every case, the applicant will not be subject to a medical exam and in some cases, the applicant will not even have to answer medical questions in order to get a policy. Although we use the term “burial insurance,” most applicants buy extra coverage to take care of other final expenses that are typically associated with a person’s death.
Why Use Whole Life instead of Term Insurance?
The primary purpose of using whole life insurance for your burial life insurance is because the policy will cover you for a lifetime as long as you pay the premiums. The insurance company cannot cancel your burial policy for any reason other than non-payment.
A whole life burial policy also has a level premium for the life of the policy. This means that no matter how old you get or how sick you may become, your insurer cannot increase your life insurance payment. Even if you must live the balance of your life in a nursing home, your coverage cannot be canceled and your premium cannot be increased.
Unlike whole life insurance, term insurance is temporary and even if you are offered a renewal, your policy’s premiums will increase with age and likely end up unaffordable. Additionally, term insurance has no cash value component which means your premiums are being used to rent your insurance.
I have Life Insurance at Work, why Buy Burial Insurance?
Having life insurance through your employer is certainly a good thing. However, group life insurance is typically term life insurance and not portable. This means that when you leave your employer (for any reason) your life insurance policy will not follow you to your next employer or into retirement.
Also, employer-sponsored insurance does not build cash value so you cannot borrow against the policy or make any kind of cash withdrawals. It’s certainly great that your employer offers group term insurance but it will not last forever like whole life burial insurance.
Even if you have already purchased individual life insurance, it makes sense to consider a burial insurance policy so you know that your funeral and burial expenses will not be passed on to surviving loved ones. In fact, it makes very good sense to go ahead and pre-arrange your funeral so that loved ones will not end up debating the type of funeral service to purchase on your behalf.
The Best Burial Policies for 2019
Let’s first talk a little more about buying burial insurance directly from an insurance company. If you elect not to use an experienced and reputable independent insurance agent, you will be subject to several disadvantages:
- You will not have an experienced agent to advocate for you
- You will have to contact several companies directly to find the best rates
- You will likely only be offered guaranteed issue life insurance which is the most expensive
- You will typically be offered one-size-fits-all coverage and no additional choices
As independent insurance professionals, BurialPolicy360 specializes in Final Expense and Burial Insurance and we primarily sell to seniors. Simply put, we know our stuff. We represent many life insurance companies that offer burial insurance and we are pleased to list the top five companies we recommend for 2019. This list of companies is in no particular order:
American was established in 1946 and has continually ranked high in our list of companies that offer affordable rates for burial insurance.
The company has earned an “A” rating from A.M. Best rating services which indicate they will be able to pay all insurance claims and operating expenses in the future. Americo also provides outstanding customer service to their agents and their policyholders.
Americo offers burial insurance to applicants age 50 to 85 with death benefits between $2,500 and $35,000. They offer multiple types of policies to accommodate applicants who have severe or multiple health issues.
Foresters Financial was established in 1874 and is owned by a fraternal organization known as the Independent Order of Foresters. This A+ rated company offers a complete portfolio of life insurance and investment products and is especially known for its affordable final expense and burial insurance.
They offer policy types: Level benefit, graded benefit, and modified benefit to accommodate applicants in three separate health categories.
The company offers coverage amounts from $2,000 up to $35,000 and can issue policies very quickly since underwriting decisions are made the first day of contact. Foresters is a go-to burial insurance company for us because their rates continue to be extremely affordable.
Established in 1909, Mutual of Omaha is a well-known insurance company that offers a comprehensive selection of insurance products and maintains an A+ rating from A.M. Best rating services. Mutual of Omaha also offers three types of final expense and burial insurance which means practically any applicant, even with significant health issues can purchase affordable life insurance.
Mutual’s issue ages are 45 to 85-years old and their coverage amounts are $2,000 to $40,000. Mutual of Omaha remains a top contender for affordable burial insurance and provides exceptional customer service to policyholders and their agents.
Prosperity Life is another highly-ranked carrier we represent that continues to show financial stability with an “A-“ A.M. Best which is 4th out of 15.
The company offers coverage to applicants age 50 to 80 with available face amounts of $1,500 to $35,000. Like our other favorite carriers, Prosperity offers three different whole life insurance plans to accommodate applicants in good, average, and bad health. The company’s underwriting guidelines are liberal and the company can typically offer a life insurance policy to almost all applicants.
AIG is one of the largest insurance companies we deal with and they are well known and represented by almost every independent insurance broker in the marketplace. AIG offers only guaranteed issue insurance coverage which means they can insure virtually anyone between the ages of 50 and 85.
AIG offers burial insurance policies with face amounts from $5,000 up to $25,000 and policies are generally issued the same day. Their insurance applications are quick and easy and the applicants do not have to deal with medical questions or exams. Like many other insurers, AIG offers a chronic and terminal illness rider free of charge which provides for the company to advance a large portion of the death benefit to the insured to help deal with medical costs.
BurialInsurance360 is pleased to represent an extensive list of insurance companies that offer burial insurance and although these are our top five companies for 2019, the carrier we help you select will always be the best match for your individual circumstances and budget.
Our mission remains to only represent highly rated insurance companies that deliver outstanding customer service and maintain very high insurance ratings from all of the national rating services.
Doug Mitchell, President of Ogletree Financial, holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent over 20 years in the life insurance industry and has also held licenses to sell securities, long-term care insurance, and home and auto insurance. For two years, Doug served as President of the Auburn Opelika Association of Financial Advisors and has been a member of the Million Dollar Round Table. He obtained Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award. Later in his career with New York Life, he was an Executive Council Member. Doug currently serves as President of Ogletree Financial, a life insurance marketing organization with over 1000 life insurance agents. Today, Doug’s main focus is servicing 1000s of policyholders and growing his agency through the reach of several insurance-related websites.