Burial insurance refers to a kind of life insurance wherein the recipient's expenses pertaining to the funeral are covered for by the insurance company. There are certain plans known as guaranteed issue, which are nothing but term life or life insurance policy, except that in this case, there will be no medical underwriting issues or questions asked. Hence, if a person is a terminally ill patient or wants to plan towards expenses for a crisis contingency should they pass away, the burial insurance guaranteed issue policy works in their favor. While burial insurance is not cost effective per se, you can find ways to get cheap burial insurance rates.
Typical Burial Insurance Programs
Typically an average burial insurance program will cost anywhere between $10,000 and $15,000. However, it is necessary to check with the local funeral directors to check what the prevailing rates are for funerals in the market at that particular time. If the candidate is an elderly person, then a typical burial insurance policy costing should cover a majority of the funeral expenses. These days, it is easy to get cheap burial insurance provided that a price comparison is performed across many companies. If the person is on the younger side there is something called a prepaid burial expense. This is not an insurance product or policy but rather a program where it is possible to prepay the burial expenses over a certain period of time.
Guaranteed Issue Programs
One of the best ways to get affordable burial insurance is with guaranteed issue policies or programs. The reason these insurance policies are called guaranteed is because one gets the insurance irrespective of their current health condition. While this might seem like a risky proposition (because seemingly anyone can get the insurance), insurance companies follow ways to prevent malpractices.
Graded Benefits
The guaranteed burial insurance has graded benefits. This entails that should the person insured die within a particular time span, beneficiaries receive only a small portion or sometimes no money out of applicable death benefits. Most of the guaranteed issue type policies will pay complete benefits only after the initial two years of the policy have been completed.
Higher Premiums
One way the guaranteed issue insurance organizations make more income is by charging more for premiums. There are also age limits set for policies and someone who is more than 70 years of age would not be provided the insurance.
The Advantage of Guaranteed Insurance
One of the main reasons why people choose guaranteed life insurance is because it provides an easy way to get cheap burial insurance. There are also no questions asked about the medical history of the applicant. Questions asked tend to revolve around generic aspects such as age, name and address. These policies come with a limited amount of death benefit and the maximum that one can hope to get coverage for is around $50,000. The cash values obtained from a guaranteed issue program can also be used for emergency medical expenses while the person is alive.
With a guaranteed issue type of program one can choose to withdraw the cash, terminate the policy or choose fewer death benefits. An important note to consider is that, the smaller the death benefit, the cheaper the burial insurance.
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