Do Seniors Need Burial Insurance?
I have seen a lot of articles for seniors life insurance recently, and that insurance is usually marketed as a policy that will provide money for funeral expenses and other bills that come up at the end of the life. This topic is certainly worth considering since funerals average over $8,000 in the US, and also since many senior citizens live on fixed incomes. They do not want to burden their children or grandchildren with this expense, but they also do not know how they can save the money when their incomes are low and other expenses keep rising.
A senior’s burial policy is, simply, a whole life insurance policy with a small face value. It has been designed to accept most older people with simplified underwriting that asks few health questions. In fact, only simplifed issue policies even ask health questions. Guaranteed issue policies do not ask any health questions but they use a waiting period instead of underwriting by health.
But a simplified issue policy will pay out an immediate death benefit upon issue. A guaranteed issue policy may have a 2 or 3 year waiting period before the full face value will be paid to beneficiaries. If the insured person passes away before the waiting period expires, the policy will usually refund the premiums, sometimes with interest.
Simplified issue policies cost less too, and they have been designed to accept most seniors who are reasonably healthy and active. So before you, or somebody you know, buys the first guaranteed issue policy that is advertised on TV, be sure and look into simplified issue policies for seniors.
Now a burial policy can be a very affordable way to plan for a funeral’s cost and other final expenses. The face value, or death benefit, of the policy can also include other planned expenses like travel, food, and paying off debts. Most of the time, a policy can be issued with a face value of anywhere from $2,500 to $25,000. Any money that is left over, after paying for final expenses, belongs to the benficiary to use as they please.
Many seniors purchase this coverage for themselves, but just as often, grown children will purchase the policy to cover their aging parents. The covered person must answer any application questions, and of course, they must sign the policy, so they will be aware of the coverage. But mo
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st of the time, the elderly people are happy and relieved that this important obligation has been taken care of.
Both senior citizens and their caretakers may find that burial policies are an affordable way to plan for a major expense. It is a relief to everybody that nobody has to worry about where to come up with thousands of dollars in cash at a time of loss.
Just be sure to inquire about different policies to make sure that you find the best coverage that you can qualify for, and also shop around to get that coverage at the best possible rate!
By: Marilyn Katz
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If you have been thinking about buying life insurance, but for whatever reason, have delayed your decision, you may want to read the following 10 important reasons to buy life insurance. Regardless of your situation, at least one reason will apply to you.
Funeral Costs
Let’s face it; we are all going to die one day. Nobody knows when. The cost of a funeral today is thousands of dollars and likely will rise in the future. Don’t leave that financial burden to your spouse or parents. Life insurance funds in place can cover the cost of your funeral.
Are you a Homeowner?
As a married homeowner with a mortgage, advance planning will ensure that in the case of your premature death, the mortgage is paid off, and there is enough money remaining for your surviving spouse. If you are single, and own a home with a mortgage, you certainly would not want your heirs to assume the burden of your debt. Having life insurance in place to pay the amount of your mortgage at the time of your death is really important.
Outstanding Debts
The reality is that in today’s world, it is tough to get ahead. Regardless of any outstanding mortgage balance, you may also have lines of credit, car payments or credit card balances that must be paid off by your estate or spouse. Adequate life insurance can be put in place to take care of debts upon your death.
Do you have Children?
You have a responsibility to provide for your kids. Make sure there is money left for your spouse, the primary caregiver, to provide for your children in the same way as when you were alive. You may also want to ensure there are funds available for their future education, particularly if they are still very young.
Lifestyle
If you are married, and/or have children, I am sure you would want your spouse and kids to maintain or improve the lifestyle you gave them. It would be an added burden, and major adjustment at a difficult time, to have to sell their home, move, and downsize in order to maintain the lifestyle you provided. If you do not have adequate insurance in place, downsizing may be the only way they will manage to have enough funds.
Replace Lost Income
How much income do you earn? How much do you expect to earn over the course of your working life? If you died prematurely, how many years of income would you like to leave to your family so they would have time to readjust? Proper planning with a life insurance policy can take care of this for your family.
Security
Let’s face it, we all like security and peace of mind. Just to know that if the unforeseen did happen, the fact you had life insurance in force on the adult caregivers and providers, should give security to you, and definitely to your spouse.
Estate Planning
Whether you are a multimillionaire, or middle class, your assets will be redistributed at death. Regardless of your situation, make sure there are enough funds to help ease the transition. You pay enough taxes throughout your life. At death, your estate may attract taxes, probate and legal costs. Life insurance is an opportunity to leave tax free money to your beneficiary to deal with any estate settlement costs.
Are You Still Insurable?
The time to purchase life insurance is while you are still young and in relatively good health. It is a fact that as we grow older, whether we like it or not, we are more likely to develop health challenges. Don’t risk delaying purchasing life insurance only to learn you are perhaps in a higher class risk and insurance is more expensive. Worse yet, you may not be insurable. Guaranteed to issue policies are available, but there are limitations and they are very expensive. Don’t put it off!
If Not For Your Family, For Your Parents
Parents do a lot for their kids. You do, and likely your parents did for you. Wouldn’t it be nice to be able to give back? As baby boomer parents go into retirement and beyond, they may require some financial assistance. Many in this age group find the pension plans they counted on, fall far short of their needs. Perhaps you can foresee your parents will require care and you are prepared to help them, maybe even have them live with you. This is a great plan, but if you die prematurely before your parents, who will be there to help them out? An insurance policy naming them as beneficiaries would be the answer.
I hope this article has given you a bit of insight about how insurance can financially help you with some of the unexpected events in life. I have always said, buying life insurance is an unselfish decision. It is the purchase of which you personally will never reap the benefit but your family and loved ones will. But then, the knowledge you’ve provided adequately for them, really is a benefit to you!
For more information, feel free to visit our website.
Jordan Kovats B.Sc.
The Benefit Guys
Jordan has been involved in the Insurance industry for over 10 years. He specialized in Disability Insurance, until he went on to be a Co-Founder of The Benefit Guys.
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