I know there’s nothing more cringe worthy then thinking about our parents passing away. I have parents as well, and had to discuss the very same issues a few years ago with my parents. However, have you ever thought about how you would pay for all the
final expenses ?
Finding burial insurance for your parents is not as hard, or difficult that you probably think it is . Not only that, but it may cost less then you might have initially thought.
With the help of a qualified agency like
Burial Insurance Pro's , you can find out what types of policies your parents may qualify for. The ultimate goal is for you to find a plan that provides adequate coverage, and a plan that fits your financial budget.
It also would be wise for a child, to be the owner and payor of a policy. This way, they are in control of the policy, and can guarantee that it is in force. Often times, a child may find out that their parents policies lapsed, and there is no coverage. This could leave the family in a difficult spot, to cover the various burial and final expenses.
What are the Steps to by Burial Insurance For Your Parents?
Once you’ve had a discussion with your parents, you can formally apply to an individual insurance company. Many companies have a basic paper application, that you can complete with them. The forms will gather their pertinent information, as well as your information as the Owner and Payor.
These types of policies do not require a medical exam. They will simply do a prescription background check, and review a MIB ( medical information bureau) report. This information along with the health questions on the application, will determine elgibility.
Also, you do not have to worry about waiting weeks for a decision. Companies will make their decision in about 3-5 business days. If your parent gets declined by one company, don’t worry. Another company may be able to offer coverage. Since there are over a 100 companies out there, a person can usually find one that will offer coverage.
What does the Average Funeral Cost
As you are aware, Funerals aren’t cheap. They also tend to rise in costs, over time.
Funeral expenses may double in cost, approximately every 15 to 20 years. When looking at a policy, you probably would want to take out a policy that would meet your needs in the coming years, as opposed to just meeting your needs today.
The National Funeral Directors Association’s latest report showed the difference in costs for the years 2010 and 2013. They indicated about a 7.7% increase in the last three years.
Difference Between Cremation and Funeral
Depending on where you live in the USA, your costs for services will vary.
An average Funeral may run from $7000 to $12,000.
The average cremation costs anywhere from $3,000-$5,000.
Every familily’s final wishes are different. So the costs will vary from family to family
With Burial Insurance Policies, if there’s any money left over, that is for the family to use as they choose.
How are Costs Determined?
With all types of life insurance, a premium is calculated based off a person’s age at application, health, and amount of insurance. If a person is in “fair” to ‘great’ health, they would be eligible for preferred rates.
rnIf a person is in below average health, they may still be eligible for coverage, but their rates may be higher.
Each insurance company will have their own set of underwriting guidelines. Every company will also have their own set of rates. So popular companies like Mutual of Omaha would have different guidelines and premiums compared to
Lincoln Heritage.
If you qualify for an immediate death benefit policy, your death benefit is effective Day 1. The only exclusion is if death occurs to suicide in the first two years. This gives you an immediate peace of mind knowing coverage is in place.
If your parent is in poor health, they’d be only eligible for what’s considered a Guaranteed Issue policy.
With these products, they do have some drawbacks.
The first is that the death benefit does not pay out until after the first 2 policy years. If death occurs, only premiums plus 10% of interest is refunded.
The second drawback is how expensive these these plans are. They are considerably more expensive.
Companies such as American General and Gerber Life are two of the more competitive plans.
What is the Maximum Age a Parent would qualify?
Surprisingly, if your parent is age 89 or younger, they may qualify for an immediate death benefit plan. We wouldn’t recommend waiting this long to start a policy, as the premiums are expensive.
If your parents are in poor health and need a guaranteed issue policy, the cut off age is 85.
It’s always best to start a policy like this, when your parents are younger, and healthier.
How long for death claims to be paid?
Assuming your parents are beyond the initial 2 year waiting period, most companies will pay the death claim in 3-5 days. These policies were designed to help people pay for burial costs, so they want the beneficiary to know they’ll receive the payments in a timely manner.
Death claims are paid in a lump sum, tax free benefit. It’s paid to the named beneficiary.
Why Should I Buy Burial Insurance For My Parents?
The first reason we’d recommend coverage, is to be 100% sure there is “money” to cover these costs. Often times parents may tell their children that there’s money set aside, but that may not be the case.
It’s probably best for a child to have control of a policy, and be the owner/payor, so they can again be 100% certain there is coverage.
Losing a loved one is difficult enough. The last thing you want to do is to worry about how funeral, and burial costs will be paid. Coming up with $10,000 out of pocket could put a strain on a person’s finances.
Consequently, family members are often stuck in the precarious situation of dealing with the emotions of losing their loved one while simultaneously trying to guess how they would want to be remembered and how to pay for the funeral and other costs.
In general, most kids choose to buy a funeral policy on mom or dad for one simple reason.
Their parents have no means to pay for their final expenses. Rather than being stuck with a massive bill one day, kids take out a funeral policy on their parents now to ensure those expenses are covered whenever they pass on.
Burial Insurance For Parents
Being hit with a sudden $7,000-$10,000 bill can be a huge financial windfall for most American families. All too often we have had personal conversations with kids whose parents left them with a mountain of debt.
It’s sad to hear, but it can be avoided. This is why more and more kids today are preparing by buying funeral insurance for parents.