Talking about death is unnerving for many people. It often involves discussions regarding what needs to be done after you pass by your loved ones. This emotional conversation is a necessary one.
Planning for after-death can help your loved ones grieve without the additional stress of finances. Burial insurance in Texas can cover funeral costs so your loved ones don’t have to.
Keep reading to learn what to know about this type of insurance.
What Is Burial Insurance?
Burial insurance is a type of whole-life insurance that covers the cost of end-of-life expenses. Also known as final expense or funeral insurance, burial insurance is designed to cover funerals and burials.
Given the high funeral costs in Texas, these policies can relieve some stress. Generally, there are three types of burial insurance.
Simplified Issue
To get simplified issue insurance, an insurer will evaluate your health by asking a series of medical history questions. A medical exam is not required.
Pre-existing conditions, risky activities, and smoking can lead to policy denial.
Guaranteed Issue
To get a guaranteed issue insurance policy, you don’t have to answer medical questions or take an exam. This policy brings more risk to the insurer so the costs are significantly higher.
It’s common for this type of policy to have a modified benefits provision. This provision prevents the full death benefit from becoming available until the policy has been in effect for at least 24 or 36 months.
If you pass away due to natural causes before the waiting period, the beneficiaries receive only a portion of the payout. The premiums paid plus interest are reimbursed to the beneficiary instead.
Full benefits are often still paid out in the event of an accidental death even before the waiting period.
If you want to get burial insurance with no waiting period, consider one of the other two options.
Pre-Need Insurance
A pre-need insurance policy involves a contract with a funeral service provider. The agreement includes specific services and products selected by you.
The policy’s payout will go directly to those services and products. Your beneficiaries won’t have to plan anything for you which could significantly reduce their stress levels during a difficult time.
How Does Burial Insurance Work?
Once you determine the burial insurance in Texas that is right for you, you’ll decide who will be the beneficiary upon your death.
Following the death of the insured, the beneficiary should connect with the insurance company to start the claims process.
A beneficiary is often required to provide identification and a certified copy of the death certificate to submit the claims form.
What Does a Policy Cover?
The cost of burial insurance in Texas depends on the type of policy you choose. Final expense in Texas is designed to cover the costs faced by your loved ones upon your death.
There aren’t restrictions on how the payout can be used. Unless you opt for pre-need insurance, your beneficiaries might choose to use the payout to cover:
- Burial costs
- Funeral arrangements
- Cremation costs
- Outstanding debt
- Legal costs
- Medical bills
Burial insurance comes with a low coverage amount so there might not be any money left after these expenses. If you want to leave behind a sum of money to your beneficiaries, consider a traditional whole-life policy.
How Much Are Funeral Services in Texas?
To determine the amount of coverage you need for a funeral and burial, it’s important to understand the average costs. These are the typical expense ranges in Texas:
- Traditional full-service burial: $7,000-$12,000
- Direct burial: $1,000-$4,000
- Cremation with service: $2,000-$10,000
- Direct cremation: $600-$3,000
Decide what type of funeral service you want to have to ensure your policy amount covers the fees. Share your burial insurance plans with family or friends in advance to avoid complications in the future.
How Much Is Burial Insurance in Texas?
Compared to other types of insurance, burial insurance is considered one of the most affordable options. This is largely due to the lower coverage amounts.
Final expense life insurance rates typically start around $50 a month with coverage amounts ranging from $5,000 to $35,000. Premiums can be paid monthly or annually.
Final expense insurance is almost always less than $100,000 of coverage. Pay attention to the fine print when purchasing a policy.
If you need more than $100,000 worth of coverage, you’ll have to search for other life insurance policies. Traditional life insurance policies require you to take a medical exam to receive coverage for non-burial insurance.
You’ll need to make sure the price fits your budget so you don’t have to worry about missed payments that could cause you to forfeit coverage.
Coverage is available for those between the ages of 50 and 85. Your rates will be determined by your age and health.
What if I Have a Health Issue?
If you have health concerns, it can be more challenging to find an affordable final expense policy.
Guaranteed coverage policies will accept you regardless of your health, but cost more to maintain. The benefit is that the rates don’t increase over time.
Guaranteed issue policies are typically the only option available to people over the age of 80.
If you only qualify for expensive rates because of your health, self-insurance is an option to consider. Self-insurance is the concept of saving enough funds to insure yourself.
Save the amount of money each month you would spend on insurance premiums. Let it accumulate in an interest-bearing account. Tell your beneficiaries about this account and what it should be used for.
Is Burial Insurance Worth It? The Bottom Line
Purchasing burial insurance in Texas is worth it for people who want to prevent passing on substantial debt to surviving family members.
Burial insurance is a whole-life policy that lasts until you pass away. If you want to make sure your funeral costs are covered, this coverage makes more sense than a term life policy.
Now that you know more about final expense insurance, you can decide which policy is right for you. Determine your ideal funeral plans to choose an adequate coverage amount.
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