Between burial and life insurance, which one do you choose? A lot of people confuse to choose one of them as a protection for their loved ones when they have passed away. Burial insurance VS life insurance here helps to find the right choice for you and your beloved people.
Some life insurance companies add the burial or final expense inside their life insurance products. However, some of them offer it as a separate insurance coverage product and emerge new questions. Do the applicants purchase both insurance policies at a time?
Contents
What Are Burial and Life Insurance Policies?
To know which one is the best and decide to purchase a burial or life insurance, people should understand the meaning of both.
What Is Burial Insurance?
It is known as a final expense plan and it is considered a type of life insurance policy. But, the benefit amount is smaller than traditional life insurance as its focus is smaller too. The burial insurance coverage cost is according to the age and health when applying.
However, this kind of life insurance policy does not require a medical exam. The applicants just need to give their medication history and medical questions. As long as the applicants are qualified, most insurance companies will issue the burial insurance policy just in a few days.
A burial insurance benefit is given to the beneficiaries quickly and it can cover many funeral expenses cost. The coverage allows cover burial plot, cemetery fees, casket, grave marker, flowers, cremation, embalming, hearse, and others. Until here, the difference between Burial VS Life Insurance is seen clearly.
Further, a burial insurance plan only needs as fast as 24 hours to get the death benefit without showing a death certificate. Direct payment without additional requirements becomes a great advantage for most funeral homes to cover your death-related expenses.
Burial benefits cannot meet beneficiaries’ life expenses or take them as their main income. It is as this type of policy is designed to cover short-term and one-time expenses. Nevertheless, the death benefit may use to pay unpaid medical bills and credit card debt.
Alongside that, it is not designed to cover various bills accrued in the month of your passing including phone bills, utility bills, or car payments. Thus, the burial benefit cannot replace income, purchasing a home, paying for college, retirement plan, or investment. In this case, the burial insurance is not equal to whole life, term life, and universal life policies.
What Is Life Insurance?
Life insurance is an insurance product with a larger focus and coverage amount. It is offered with the purpose of family protection after the applicant dies during the period. Different from burial insurance, the coverage amount can be used to pay funeral costs, pay off debt, clear the mortgage, or spend as an inheritance.
Depending on the life insurance product to choose, it can replace beneficiaries’ income or use it as retirement fees. Life insurance is offered as the term and permanent life policies with different limitations. Term life usually has a premium payment limit from 10 to 30 years while permanent life insurance plans do not expire.
It implies that permanent life policies like whole life and universal life will pay the death benefit until the last day. Burial insurance VS life insurance policies are different in the requirement. The applicants may have to take a medical exam to qualify for the policy.
The medical exam will dictate what rate applicants qualify for or it is just a reason to stay in good health. Applicants with better medical records will get better rates. Once approved, the applicants must pay a preset amount of money periodically to the insurer.
Differences between Burial and Life Insurance
Truthfully, the definition of burial and life insurance policies above has explained little few differences. But, a detailed explanation is presented below!
Burial Plan
The company pays guaranteed funeral service costs at today’s rate and it has no cash value. It is due to the funeral plan payment being merely used for the applicant’s funeral. Dependents get two options of payment such as paid in full or in monthly installments. Further, the payment ends after the burial plan has been paid in full.
The burial plan provides guaranteed acceptance without medical questions. The most important thing is policyholders allow choice the plans based on their needs and budget.
Life Insurance Plan
Mentioned beneficiaries will receive a cash lump sum if applicants pass away during the term of the policy. The life insurance company provides financial support for beneficiaries and it may be spent how they see fit. Applicants have to pay their monthly premium whilst the cover is still in place.
According to the policy, policyholders must continue to pay the premium until expire or pass away. The life insurance policy needs requirement underwriting to secure cover and how much it will cost. Lastly, most life insurance plan offers different policy types to suit different needs and budgets.
Pros and Cons Burial Insurance Plan
Each insurance policy always comes with pros and cons as not all products offered suit people’s needs. Burial insurance also carries advantages and disadvantages to pay attention to.
Pros Of Burial Plan
The burial insurance plan will give peace of mind as policyholders will be paid for in advance and guaranteed at today’s price. It implies they can avoid any future price hikes and protect loved ones from the large expense. Those are a few advantages of a burial plan and the others are such as the following.
No Medical Or Health Question
Burial insurance VS life insurance notes funeral plan does not need heath or medical questions when applying. It is because the plan guarantees acceptance and does care for policyholder health conditions. Having a pre-existing medical condition or having a health problem remains to get a burial plan with the same price as any other applicants).
Plan Your Funeral (Your Way)
Next, a burial insurance plan is supported and guided by a professional funeral planner for you and your loved one when you pass away. You may also get free bereavement advice for loved ones from some burial plans.
Applicants know Well Burial Plan Price
The funeral plan always has a fixed price so it eases applicants to know how much they will pay in total. The insurer allows them to spread the cost in monthly payments or choose to pay in full for immediate cover. The payment ends when the burial has been paid in full and it keeps in place until your services are needed.
Cons of Burial Plan
There are two things included disadvantages of a burial plan to know. Firstly, the funeral plan can be a more expensive option in certain circumstances. It will be more expensive when it is included in a term life insurance policy with good health when applying. But, the payment is only as much as you have paid in.
Some life insurance plans do not guarantee all funeral costs. Secondly, the burial plan forces applicants to think about their mortality. It sounds uncomfortable to talk about mortality with family and friends in a short time but it will give a serenity mind in the long term.
Pros And Cons Life Insurance
Burial insurance VS life insurance also informs on the pros and cons of the life insurance plan. It is such as providing a cash lump-sum payout for broad expanses. The family or beneficiaries may spend it for burial expenses, income replacement, debt payments, and others.
The life insurance plan offers comprehensive financial protection to pass financial hardship after the applicants pass away. According to applicants’ circumstance, the type of policy likely pay out the coverage higher than required for your funeral. Later on, life insurance allows adding additional cover.
Generally, the life insurance policy can be added with critical illness cover with additional cost. Or, terminal illness cover comes with a standard with all term policies through Reassured.
Some policies provide additional benefit options to help you make the most of the cover but will cost extra. The additional benefits include separation benefit, waiver of premium, and special events option (guaranteed insurability).
Cons of a life insurance policy are started with the requirements of applicants and the expensive price. Not all policyholders, turns out, can be eligible for life insurance due to their ages or health condition. Most life insurance plans are provided for applicants until the age of 80 or 85.
If the insurer allows older people to apply for life insurance, the premium will be more expensive. People at a younger age when applying will get cheaper premium rates. Burial insurance VS life insurance also rates higher costs caused by the applicant’s health condition like healthy or unhealthy.
A life insurance policy may ask for paying more than what’s paid out. This case is influenced by a guaranteed payout. For instance, a whole of life or over 50s cover usually requires premium payments up until you pass away.
But, it depends on how long you live to pay out more for the policy than what should be paid. Otherwise, the applicants have to pay in but do not receive a payout if they purchase a term-based policy and outlive the policy term.
Purchase Burial Insurance And Life Insurance Policies At A Time
Applicants can purchase burial and life insurance policies at once as long as the budget allows. Although both serve different purposes, the applicants get death benefits for their beneficiaries.
The dependents, at least, do not need to worry about the funeral expenses to payout. The burial insurance plan ensures the burial expenses will be paid for in advance and the arrangements also have been taken care of.
Meanwhile, the life insurance cash payout works as additional financial support for your family. Burial insurance VS life insurance adds the company allows beneficiaries to use the coverage to meet their living expenses. Additionally, they can use the death benefit as an inheritance to enjoy.
Research Before Purchasing
However, make research before purchasing burial insurance or insurance life, or choose both insurance plans. You should find the right insurer with the insurance plans based on your need and budget. Quite choose one of them but it truly suits you and your family’s needs.
Understand your insurance plan properly or you will just make your family sad. The burial insurance plan is suitable for you without thinking about your dependents’ future. But, life insurance not only covers your funeral expense but also your living expenses.
Final Words
A burial insurance policy can be an additional plan in the life insurance with smaller coverage. However, some insurers also provide it separately and people must choose one of them. Fortunately, you can purchase both to cover your funeral expense and guarantee your family’s future.
Burial insurance VS life insurance comes with detailed information on both insurance plans. They come with a detailed definition, pros, cons, differences, and how to purchase it. Now, it is time to consider which one fits you and your loved one.
