While there is no doubt that everyone needs burial insurance (as they say, death and taxes are the only things constant in this world), not everyone has a fair idea of how much it costs to bury a loved one. In order to come up with this figure, we need to take a look at the average cost of burial in the country.
How Much Burial Insurance Do I Need?
In 1960, families needed $708 for a proper burial of a loved on. With inflation, the cost has skyrocketed to $5,180 in 2000. Still, fast forward to 2016, burial costs have all shot up to $8,343. There should be differences in the actual figure depending on which state you live, the kind of service you want, and few more factors. The figure we are quoting is for bare-minimum costs to cover the most affordable caskets, funeral service, and burial plot.
If you search for information, you will see that a casket can cost you anywhere between $500 to $10,000. A service can run from $2,000 to $8,000. Burial plots, on the other hand, can cost $2,500 and $10,000, with a memorial costing anywhere between $500 and $4,000.
As you can see, the costs can quickly add up. And it is incumbent on the one paying for the insurance policy to determine the kind of arrangements that he wants for the insured person.
Burial insurance pays out a lump sum to the beneficiaries of the insured when the insured dies. It can be used to pay for whatever expenses there are related to the burial, and even beyond. If you need to pay for someone to fly in, you can pay for it with burial insurance. The same is true if there are debts by the insured- that need to be settled.
Before you go out to get burial insurance, make sure to do the math on the expenses that you will incur. Aside from the casket, the funeral service, burial plot, and the memorial service, there is also a matter of feeding your guests. These items should be calculated well in advance.
Once you get a figure, add 10% to that amount for incidental expenses. The total will be your basis for getting a quote. The insurance person you talk to will then calculate how much you will be paying in premiums.
Types of Burial Insurance:
Just know that there are basically two types of burial insurance: guaranteed no medical insurance and medical insurance. The former is best for seniors who cannot get the latter type of insurance because of some condition. Take note, though, that while you will not be asked medical-related questions, there will be a waiting period of one year or so, which means that no lump sum will be paid out if the insured person dies during the waiting period.
With medical-based insurance, the policy takes effect almost immediately. The specifics of the different plans vary from insurer to insurer, so make sure to get at least three quotes.
As much as possible, talk to an insurance broker so you can be advised on which policy from which insurer to get.