Do You Need Burial Insurance? It’s Probably a Good Idea
In the U.S., the average cost of a funeral is $7,000. However, that is a conservative estimate, with many costing close to $10,000. Additionally, depending on where you live, the cost of a funeral and burial can be as high as $20,000. The uncomfortable truth is that dying in the United States is a business like any other. How much money you pay for a funeral also depends on the primary rule of real estate.
That is location, location, location. Where you live dictates how much you will pay for a funeral. If you live in a sparsely dense rural area, then the cost of a funeral is reasonably low. Living in a densely populated metropolitan area means that there are too many people and not enough burial plots. So, supply and demand take effect. If you live in a metropolitan city, then the cost of a funeral will be more expensive than in a rural area.
Death Is a Business
There are almost 20,000 funeral homes operating in the United States. It is a business that makes over $13 billion a year. Why should this information worry you? Well, because all of us will die one day. Although, not all of us have made arrangements to pay for our own funerals. A morbid detail to think about. But if you don’t make such considerations now, you burden loved ones with the cost and logistics of such later on. Or risk ending up in a “pauper’s grave.”
Each state has a process for financing and managing burial plots for the indigent. Such mass graves for the poor truly do exist in the United States and are usually not open to the public. As hard as it is to do, you need to make plans for your eventual burial as soon as possible.
Deciding If You Need Burial Insurance
Over 40% of Americans have no life insurance at all. Life insurance is a financial product for easing the worry of leaving loved ones with financial burdens after your death. Like paying for a funeral. Another thing to consider is that life insurance is very affordable to get when you are young and healthy. The older that you are, the more expensive life insurance becomes. Also, many senior citizens live on fixed income and can’t afford another bill, like an expensive premium.
A more affordable alternative to life insurance is burial insurance. Burial insurance is a truncated version of life insurance. The average life insurance policy is about $250,000. An average burial insurance policy is about $25,000. Burial insurance is often a last chance option to pay off your final expense. You can pay all of your funeral costs with a burial insurance policy.
Troy Thompson of Burial Insurance Pro’s mentions ” most seniors will have a plethora of choices in terms of companies to choose from. Many well known companies such as Mutual of Omaha, Gerber Life, and Colonial Penn offer affordable plans to consumers. It’s important to compare pricing and policy features before selecting a company.”
Anyone can apply for burial insurance. You can be approved over the phone. There is no medical exam required. Any named beneficiary should be charged with paying your funeral expenses after your passing. Most people who apply for burial insurance are part of what is called a high-risk applicant pool. These are people who are elderly, in poor health, financially struggling, and who can’t be approved for a traditional life insurance policy easily.
Is Burial Insurance Right for You?
Burial insurance can become much more expensive than life insurance if you buy a policy over $25,000. As long as you buy a policy under that amount, your monthly premium could be tens of dollars a month or less. You can use the policy to leverage a loan or name beneficiaries, but it should be solely for your eventual funeral. If you don’t have any life insurance or loved ones to facilitate your final expenses, burial insurance could be an affordable option for your needs.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.