Seniors between 80 and 85-years old have lived a great life! You’ve seen it all and done it all, and now you’re in your later years. It’s time to think of what’s coming – including the unpleasantness of dying. Have you prepared your family for your death financially?
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You may think you have, especially if you set your estate up, including the funding, but what about your final expenses?
Have you thought of how your loved ones will pay for your funeral and burial? According to the National Funeral Directors Association, the average funeral costs $9,100, but they can get as high as $20,000 depending on your last wishes.
Do you have that type of money, or do you need to provide your family members with a way to get it? 🤔
Funeral or burial insurance is one of the best ways to ensure your loved ones have the funds needed to give you the send-off you deserve. There are thousands of policies available out there. Click here to help you compare your options all in one place.
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Why Burial Insurance is Important
At age 80 and above, your only option for life insurance (in most cases) is burial insurance. Most term and whole life policies max out at a much younger age. At this point in your life, it’s obvious you don’t have a lot of time left. The insurance company will have to pay out on a claim at some point that is likely sooner rather than later. There’s reason number one it’s important – it’s the only coverage you can get.
It covers, as the name suggests, your burial costs, but it may also cover other things including:
- Funeral costs including the cost of the casket, viewing, funeral service, and director’s services
- Final medical expenses
- Any expenses you didn’t cover, such as credit card bills or other liabilities
Burial insurance specifically at 80 to 85, helps reassure your loved ones that there are funds available to tie up all the loose ends while giving you the send-off you desire.
What are the Benefits of Burial Insurance?
Why should you consider burial insurance? Here are a few of the largest benefits:
- The benefits go to your beneficiary, not the funeral home. Your beneficiary uses the funds as needed for your funeral, burial, medical costs, and any other unmet business.
- The premiums are affordable since the coverage limits are low. Most policies provide coverage up to $20,000 maximum.
- The policy lasts for your lifetime, unlike term life insurance that expires after a specific term. As long as you pay your premiums, you have the coverage.
- Your premiums remain fixed for your lifetime and benefits are typically payable until 100, sometimes up to 120-years old.
- You can get covered in as little as a week. You don’t need a medical exam. You simply answer a few basic questions about your health and lifestyle as long as you don’t have major health issues, such as a terminal illness, HIV, or End-Stage Renal Disease.
- Your premiums don’t go up as you age. Your policy also can’t be canceled because of illness or age.
The Best Type of Burial Insurance for Seniors Over 80 to 85
There are two types of burial insurance for seniors – standard and pre-need insurance.
Standard burial insurance is a whole life insurance policy. Your named beneficiary receives the benefits within a few days of the claim. The beneficiary may use the funds as they see fit. Your beneficiary can use the funds for any funeral services or other final arrangements. You don’t have a contract with any specific provider.
However:
Pre-need plans are different. The insurance company pays the funds directly to the funeral home. There are a few differences here. First, your beneficiaries must use the chosen funeral home. Also, you lock in the rates today for a future funeral, with a date to-be-determined. It has its downsides, though, since your loved ones have little to no say in the arrangements, it can frustrate them.
What’s the Best Coverage Amount for Seniors?
Every senior will have different needs, but in general, buying coverage for the funeral cost is ideal. But think about what you’ll want to leave your loved ones. Are they paying for just your funeral or other expenses, like:
- Medical bills
- Outstanding credit card bills
- Other arrangements outside of the funeral, such as a trip to scatter your ashes
Consider anything above and beyond the funeral expenses. Did you already set aside funds for these expenses, aka self-insure, or do you need more coverage to ensure your loved ones have the money required?
The Average Burial Insurance Premiums
The average burial insurance premiums range from $50 to $280 for seniors age 80 to 85. But women are cheaper to insure than men. Women have average premiums of $50 to $175, and men have average premiums of $65 to $280.
The amount of the premium depends on a variety of factors, including:
- The amount of coverage. A policy of $5,000 costs less than a policy of $20,000, for example.
- Can you answer basic medical questions? If so, and you’re in good health, you’ll get lower premiums. If you need guaranteed coverage, your premiums will be on the higher end. For example, an 80-year-old male could pay up to $250/month for guaranteed issued life insurance according to Secure Senior Life Insurance.
What Affects your Premiums at this Age?
Like any life insurance policy, there are ways you can lower your premiums. Since insurance companies insure the likelihood of your death, they reward you with lower premiums if you have lower risks and higher premiums if you’re high risk.
Age
The older you are when you buy final expense insurance, the more insurance companies charge. Since you’re already in your 80s, you’re looking at higher premiums than most. Shopping around to find the most affordable policy is crucial.
Health
You don’t undergo a medical exam, but you still answer questions about your health. If you have issues or chronic illnesses, you may pay more for insurance than someone in good health.
Lifestyle habits
Do you drink or smoke? These habits will increase your premiums because you have a higher likelihood of chronic illnesses and premature death.
Weight
Try to get to a weight that is average for your age and height. If you’re overweight, you’ll pay higher premiums, because your risk of severe illnesses increases.
Gender
There’s nothing you can do about it, but men naturally pay more than women because men have a shorter life expectancy than women.
Waiting period
If you choose a policy with no waiting period, you’ll pay higher premiums because the insurance company has a higher risk of paying out on a claim. If you choose a policy with a waiting period, the insurance company gets 2 years with no payments required.
Understanding Waiting Periods and Graded Benefits
While most final expense policies are the same, despite the various coverage amounts, there is one thing to consider – does it have a waiting period?
A waiting period gives the insurance company time that it doesn’t have to pay a claim. For example, if you have a 2-year waiting period and you die within that time, the insurance company doesn’t have to pay out your full benefit.
This is important:
Fortunately, most insurance companies offer what they call graded benefits. Each insurance company provides a different amount of graded benefits. Typically, they’ll pay the premiums you paid until that point plus a percentage of the coverage amount, such as 10%.
For example, if you have a $20,000 policy with $25 per month premiums and you paid for 12 months, you paid in $300. If the insurance company offers graded benefits of 10%, your beneficiaries will get $2,300.
Choosing your Coverage Amount
Knowing how much coverage to buy is essential and is a personal decision. To make it easier on yourself, try estimating your final costs that include both your burial costs as well as your family’s expenses for a few months after your passing. This gives them time to grieve while ensuring they are financially cared for in the interim.
- What are your monthly costs? Take that amount and multiply it by 3 months. This is the amount your family may need to get through the grieving period.
- How much is the funeral you want? Do you want something extravagant that exceeds the average $10,000 funeral, something simpler, or something in between?
- Multiply the total amount from the above two scenarios by the inflation rate, which for men age 80 and over is 1.27, and women age 80 and over is 1.34.
Should you Get Burial Insurance?
Do you have any life insurance right now, or do you assume you have enough money set aside for your loved ones? Maybe you have a term policy, but it’s set to expire soon. Whatever the case may be, burial insurance can fill the gaps.
It helps your loved ones have the money necessary to pay for your final expenses, which may or may not include the burial itself. Think of burial insurance as a way to ensure that your family has enough money to cover all of your expenses without causing financial stress.
When you pass away, it’s a stressful time for your loved ones; if you can help ease the stress by offering final expense insurance, it will help them. While it’s not a high amount of coverage, it’s enough to get everyone through those first few months without breaking your budget.
As with any insurance, make sure you shop around to get the lowest premiums and the best coverage possible. No two insurance companies are created equal. Make sure you choose a reputable company that offers a policy you can afford. Do you need help with shopping for a policy? Use this tool to get the coverage you need if you’re a senior age 80 to 85.