The CSGroup Life Insurance

Why Burial Insurance is the better product verses Pre-Need Funerals.

Burial Insurance vs. Pre-need Funeral Insurance

Burial insurance and pre-need funeral insurance are two different products. The biggest difference is burial insurance makes a payout to your beneficiaries, while pre-need insurance typically pays a funeral home where you have arranged funeral details.

If flexibility is a concern, burial insurance is a better purchase. Here’s a look at the major differences between the two.

Burial insurance:
Purchased from a life insurance company
Your beneficiary receives the payout and can spend it how they choose
If you move, your beneficiary has the flexibility to pay for a funeral in a different state
Preneed funeral insurance:
Purchased from a funeral home
Funeral options are chosen and paid to a funeral home ahead of time
Difficult to make changes if locked into a contract
Your plan may not be “portable,” meaning you won’t be able to take it to another state
How Much Does Social Security Pay for a Funeral?

Social Security pays a small lump sum payment of $255 to a surviving spouse if they were living with you. If your surviving spouse was not living with you, they may be eligible if they were receiving certain Social Security benefits on your record. If you do not have a surviving spouse, the payment can be made to a child who is eligible.

Check with the Social Security Administration for eligibility requirements.

How Does Burial Insurance Work?

Burial and funeral insurance policies generally do not require a medical exam, and the application may ask only a few health questions — or no questions at all. Rates are based primarily on age and gender. Burial insurance is typically one of these varieties of whole life insurance:

Simplified issue life insurance: The application will have no medical exam and only a few health questions, but a “yes” answer to any of them could disqualify you. For example, simplified issue applications often ask if you’re currently living in a nursing home, or if you have HIV.
Guaranteed issue life insurance: There are no health questions or a medical exam to apply for guaranteed issue life insurance. You can’t be turned down.
The downside to these easy applications is that the policy will usually have “graded death benefits.” If you pass away within two or three years after buying the policy, your beneficiaries will receive only a refund of the premiums you paid, plus some interest, or a small percentage of the policy’s coverage amount. However, accidental deaths are typically covered in full from the start of the policy, such as a death in a plane crash.