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How much burial insurance do I need?
Planning for end-of-life expenses is an essential part of ensuring that your loved ones won’t face financial difficulties when it’s time to say goodbye. Burial insurance, also known as final expense insurance, can help cover funeral costs, burial fees, and other related expenses. But one of the most common questions people ask is, “How much burial insurance do I need?” The amount of coverage required depends on several factors, including the type of funeral you prefer, your local costs, and any other financial obligations you may want to account for. In this article, we’ll explore the factors to consider when determining how much burial insurance you need.
What Is Burial Insurance?
Burial insurance is a type of life insurance specifically designed to cover end-of-life expenses. It typically offers coverage amounts between $5,000 and $25,000 and is intended to cover the costs associated with funerals, burials, and cremations. While some people use it strictly to cover funeral costs, others may use the payout to cover unpaid debts or other financial obligations, helping their family avoid unexpected expenses during a difficult time.
What Does Burial Insurance Cover?
Before determining how much burial insurance you need, it’s important to understand what these policies typically cover. Burial insurance can be used for:
- Funeral Services: This includes the cost of the funeral home, embalming, body preparation, viewings, and other services provided by the funeral director.
- Burial or Cremation: Whether you choose to be buried or cremated, the associated costs can be covered by burial insurance. This includes cemetery plot purchases, grave opening and closing, or cremation services.
- Caskets or Urns: Burial insurance covers the cost of purchasing a casket or an urn for your cremated remains.
- Grave Markers or Headstones: The design, production, and installation of a grave marker or headstone can also be covered.
- Transportation: If you pass away in a different location from where you will be buried, the cost of transporting your remains can be paid with burial insurance.
- Other End-of-Life Expenses: This can include legal fees, unpaid debts, or the cost of securing multiple copies of the death certificate for legal purposes.
How to Determine the Right Amount of Burial Insurance
Now that you know what burial insurance covers, let’s look at how to determine the right amount of coverage for your needs.
1. Estimate Funeral and Burial Costs in Your Area
The cost of a funeral can vary widely depending on your location and the services you choose. The national average for a funeral with burial in the U.S. is around $7,000 to $12,000. A cremation with a basic memorial service tends to be more affordable, costing between $6,000 and $7,000 on average
These estimates typically include:
- Funeral home service fees
- Embalming and body preparation
- Casket or urn
- Transportation of the body
- Gravesite fees or cremation costs
- Memorial service
To get a more accurate estimate, it’s important to contact funeral homes or burial service providers in your area to find out the costs for the specific services you prefer. This can help you choose a burial insurance policy that will fully cover those expenses.
2. Consider the Type of Funeral or Memorial Service You Want
The type of funeral or memorial service you prefer will play a significant role in determining how much burial insurance you need. For example:
- Traditional Funeral and Burial: If you prefer a traditional funeral with embalming, a viewing, and burial in a cemetery, you will likely need a policy with a higher coverage amount to account for the various costs involved, including the casket, cemetery plot, and headstone.
- Cremation: If you prefer cremation, the overall costs may be lower. However, you will still need to consider expenses such as the cremation service, urn, and memorial service. Some people opt to have their ashes interred in a cremation niche or buried, which may increase the total cost.
- Green or Natural Burial: If you are interested in a green or natural burial, which focuses on environmentally friendly practices and often avoids embalming or expensive caskets, the costs may be lower, allowing you to choose a smaller policy.
3. Include Additional End-of-Life Expenses
While the main focus of burial insurance is to cover funeral and burial costs, many people use it to cover additional expenses. For example:
- Unpaid Medical Bills: If you pass away with unpaid medical bills, your family may need to cover those expenses. Including a bit of extra coverage in your burial insurance policy can help ensure that these bills are paid off.
- Debts: Some people choose to use their burial insurance payout to cover outstanding debts, such as credit card balances, car loans, or other personal debts. If this is important to you, factor in those amounts when choosing your coverage.
- Legal Fees: Settling an estate often involves legal fees. Adding additional coverage can help your beneficiaries manage these costs without dipping into their savings.
4. Evaluate Your Financial Situation and Family Needs
When determining how much burial insurance you need, it’s essential to consider your overall financial situation and the needs of your family. If you already have savings or other life insurance policies in place to cover end-of-life expenses, you may only need a small burial insurance policy to fill in the gaps.
On the other hand, if you don’t have other financial resources available, a larger burial insurance policy can provide your family with the financial protection they need.
5. Choose a Coverage Amount That Fits Your Budget
While it’s important to ensure you have enough coverage, you should also choose a burial insurance policy with premiums that fit comfortably into your budget. Burial insurance is often affordable, especially for seniors, and many policies offer fixed premiums, meaning your payments won’t increase over time. When comparing policies, balance the amount of coverage you need with a premium that won’t strain your finances.
Example Coverage Scenarios
Here are some example scenarios to help illustrate how different coverage amounts might work:
- Basic Cremation Service: If you’re looking for a simple cremation with a memorial service and an urn, you might choose a policy that covers $7,000 to $10,000, depending on local costs.
- Traditional Funeral and Burial: For a traditional funeral with a burial, embalming, and a gravesite service, you might need a policy that covers $10,000 to $15,000.
- Funeral and Additional Expenses: If you want to ensure that your funeral costs are covered and that there is some additional money left to pay off debts or cover legal fees, you might opt for a policy that covers $20,000 or more.
How We Can Help
At Policy Ocean, we specialize in helping individuals determine the right amount of burial insurance coverage for their unique needs. We compare rates from multiple insurers to ensure you receive the best policy at an affordable price. Whether you’re looking for a policy to cover basic cremation costs or a more comprehensive plan that includes funeral and additional expenses, our team is here to guide you through the process.
Contact us today to learn more about your burial insurance options and find the perfect policy for your situation.