If you are thinking of getting burial insurance in Texas, you will have plenty of company. A growing number of people are signing up for this type of insurance. The reasons are simple. Having burial insurance forestalls the inevitable conflict in some families about who will pay for the funeral when the time comes. It also resolves the financial difficulties that many families would encounter in paying the expensive funeral rates.
While some people leave money in their savings account for the funeral expenses, their family may not be able to use it for that. Banks are legally obliged to freeze the financial assets of the deceased. They can release these only after receiving the death certificate and other documents. It may take a few days to process these, and the funeral happens before that. It is necessary to have ready funds to meet the immediate expenses, and burial insurance will make those available.
Here is what you need to know about burial insurance.
Burial Insurance: What is it?
Burial insurance is a type of life insurance that pays for the funeral expenses of the insured person. As the costs of funerals are now in the $10,000-$20,000 range and beyond, not having burial insurance could very well put the deceased’s family in serious financial difficulties.
On the other hand, by having burial insurance in Texas, they won’t incur too many out-of-pocket expenses. It will pay for the funeral and, also, in some cases, for any outstanding debts that the deceased person might have left. It will depend on what they paid during the term of the plan, of course.
What Types of Burial Insurance Are There?
Most burial insurance plans have a cap of $50,000. It is usually sufficient to cover funeral expenses. Unlike regular life insurance plans, which can offer coverage of $50,000 and up to sustain the surviving family or beneficiaries, the purpose of burial insurance is not meant to provide an income.
Here are the available burial insurance types:
• Simplified Issue Policy
• Guaranteed Issue Policy
• Level Benefit Policy
• Term Life Insurance
• Whole Life Insurance
Simplified Issue Policy
The insurance company will review the applicant’s medical history to determine if they should underwrite a burial insurance policy for them. While the company won’t require the applicant to get a medical check-up, they may refuse to insure them if the applicant smokes or is engaged in physically risky undertakings.
Guaranteed Issue Policy
Even if the applicant has a medical history rife with health issues, the insurance company will underwrite them a burial insurance policy. However, they will charge them a higher premium.
Level Benefit Policy
The company will grant this policy only if they are satisfied with the applicant’s medical history. On the death of the applicant, their family or beneficiaries will receive the full death benefits, beginning from the date of policy issuance.
Modified Benefit Policy
For the beneficiaries to receive the full death benefits from the burial insurance, the applicant must have taken the policy at least 36 months before death. If they pass away before 36 months have elapsed, their beneficiaries will receive only a specific, limited sum. On the other hand, if the applicant dies in an accident, their beneficiaries will receive the full burial insurance benefits. In that instance, the period of the insurance policy does not matter.
Term Life Insurance
The beneficiaries will receive a policy payout from the insurance company if the applicant dies during the term of the insurance plan. But if the policy ends while they are still alive, they will need to buy a new term life burial insurance. Also, as insurance companies increase the premium amount by age, the applicants will have to pay a higher premium as they grow older.
Whole Life Insurance
This type of insurance policy provides coverage for the applicant’s whole life.
How to Find the Best Burial Insurance
It will help to contact the local insurance companies in Texas and have a look at the burial insurance policies they offer. By comparing the prices and services of the different deals, it may be possible to find a policy that is both affordable and offers decent terms.