Burial insurance is a type of life insurance, but it has a much smaller benefit amount than traditional life insurance policies. This is because burial policies are meant for taking care of final arrangements only, while life policies are taken out to cover a wide array of needs such as income replacement.
If your loved one had a burial or funeral insurance policy to help cover the cost of their funeral, your job will be much easier. Reach out to the insurance company where they took out their policy, and they will help you understand how much benefit is available and how it can be paid.
Keep in mind, though, that it may take longer for an individual to receive a life insurance payout than a funeral insurance payout depending on the insurance company. If you plan on having your funeral expenses covered by your life insurance, be sure you know all of the details about how long it will take for your loved ones to receive funds.
The average funeral in the United States ranges from about $7,000 to $10,000. This includes funeral home services, burial or cremation, a casket or an urn, and the purchase and installation of a headstone at the cemetery. You may need more or less than this to carry out your final wishes, but in general, getting a burial insurance policy for $10,000 should cover these expenses.
Burial insurance, also called senior life insurance, funeral insurance, and final expense insurance, is a small whole life policy designed to cover the immediate expenses your beneficiaries may face when you pass away. Like other whole life policies, burial insurance policies have a cash value and permanent death benefit (meaning coverage lasts your whole life, as long as you pay your premiums on time).
If you have health problems and have been refused life insurance coverage in the past, a guaranteed-issue policy may be your only option. Just be aware that if you die of natural causes during the graded death benefit period, your beneficiaries will only receive the premiums you paid into the policy (plus a small percent) in lieu of the full death benefit.
If you incurred COVID-19-related funeral expenses on or after January 20, 2020, and those expenses exceeded the funding intended to pay the costs, FEMA may evaluate your receipts and other documentation for eligible costs not covered by those funds to ensure there is no duplication of benefits. For example, if you incur expenses for a $10,000 funeral, where the funeral or burial insurance covered only $8,000, you may be eligible for up to $2,000 in COVID-19 Funeral Assistance.
Any funding designated specifically for funeral costs is considered a duplication and is not eligible for reimbursement. This includes burial or funeral insurance, a pre-planned or pre-paid funeral contract, a pre-paid trust for funeral expenses, or an irrevocable trust for Medicaid.
The two most common types of funeral insurance, which are considered funeral expense life insurance, are standard funeral insurance and pre-need funeral insurance. These types of plans help cover costs associated with your funeral and any final expenses. However, there are differences to note.
This is a life insurance policy you buy to cover the cost of your funeral or cremation cost when you pass away. Insurance companies generally offer this type of coverage in the form of term life or whole life. The death benefits for a standard funeral policy are typically low and range from $5000 to $25,000. After you die, funeral insurance pays the death benefits directly to the person you named as your beneficiary. Your beneficiary can use the proceeds in any manner, including funeral expenses, medical bills, legal costs or any outstanding debt you owed.
Family members of some vets buried in private cemeteries may be able to get a veterans death benefit, or burial allowance. Eligible vets include those who received a VA pension or disability compensation when they were alive. The burial allowance can help pay for burial, funeral, and transportation costs.
Eligibility for burial at Arlington National Cemetery is stricter than for other national cemeteries. Only active duty, military retirees, former prisoners of war, and recipients of the Purple Heart and other top awards may be buried at Arlington.
According to Mississippi law, a burial association may offer contracts in three amounts: $150, $300, and $450.Regardless of how much money is paid in premium, the contract only pays the face amount at the insured's death. It isimportant to note that burial contracts require payments throughout themember's lifetime and do not "pay up" before the member's death.
Burial association contracts pay toward the cost of a funeral. Some contracts pay only the expenses of a funeral; however,the average cost of most funerals today far exceeds a single burial contract amount. As a result, several burial contracts may be purchased to pay the expenses of the funeral home you want to provide the service. It is important to understand the differencebetween life insurance and burial contracts. Life insurance pays a cash payment to any beneficiary designated in writing by theowner of the policy, while a burial contract pays burial costs to a designated funeral home. Generally speaking, the burial contractis honored by the funeral home named on the contract form.
However, you should realize that the casket provided with this service may be a low-grade wooden or cloth-covered cardboard casketonly. This kind of burial contract will not entitle you to select any casket you want. This older type burial contract may also have otherrestrictions on the type of funeral provided. If the next-ofkin decides to change any of the items provided under a complete funeral inone of these older type burial contracts, the funeral home may not be required to provide the complete service but only credit the amount of the burial contract towards a more expensive funeral. It is important to read a burial contract very carefully and clarify any questionswith the issuing burial association.
Family Contract - This type of contract provides benefits for those family members listed as named insureds. The contract remains in forceuntil all named insureds are deceased, as long as premiums are paid to the burial association.
Section 83-37-13(8) of the Mississippi Code states that if death of the insured occurs more than fifty (50) miles fromany location of the funeral home named in the contract and should the beneficiary elect to not use the services of the funeralhome listed in the contract, the burial association must pay in cash for the member's final expenses a minimum of fifty percent(50%) of the contract face amount; or furnish the full return of the premiums paid by the member, not to exceed three-fourthspercent (3/4%) of the contract amount, whichever is greater.
If death or burial occurs within fifty (50) miles of any location of the funeral home named in the contract, and thebeneficiary desires to use a funeral home other than the funeral home named in the contract, the burial association is only requiredto pay the full return of the premium paid by the member, not to exceed the contract face amount.
Class A burial contracts written prior to 1974 do not have this provision. It is important to discuss with the funeralhome how much they will pay towards your funeral expenses if your next-ofkin does not use the funeral home listed in the contract.Some burial associations have mutual agreements to pay the full face amount of the contract to another funeral home; otherburial associations will not pay the full amount. You should discuss this matter with the person who will be responsible for these final decisions so you will not be prevented from receiving the full amount which you are entitled to receive.
Licensed insurance agents who work for a funeral home commonly sell these policies in the form of a whole life insurance policy. If there is no price guarantee, then the insured should insist on naming their own beneficiary instead of naming the funeral home as beneficiary.
If you (or your spouse) own life insurance polices or have other burial arrangements in addition to your $1,500 burial funds, some of the money in the burial fund may count toward the resource limit of $2,000 for an individual or $3,000 for a couple.
If a person lived in Massachusetts at the time of their death and there are not enough resources to pay for the funeral and burial costs, you can apply for payment assistance. You might be able to get help paying for up to $1,100 of the cost. There are rules that apply, which you can learn about on this page.
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