When it comes to choosing the right Burial Insurance Plan, it is a very personal decision and there are many important factors you should consider when making your decision, including:
- How much coverage you need
- Whether or not the insurance provider has support services for your family
- Whether or not you want to take a medical exam
- How much the average cost of a funeral is in your area
Shopping for burial insurance is like shopping for a car. Every policy will have the same basic features, but the finer details will separate one policy from another. Make sure you choose a policy that supports the specific reason you’re insuring yourself.
4 Types of Funeral Insurance Premiums
A premium is an amount you will pay for your policy each period. In most cases, you’ll make monthly payments. Funeral insurance premiums come in a few different forms.
1. Stepped Premiums
These are calculated each year you renew your policy using your sex, age, and the size of your death benefit. You will pay a lower premium in the beginning, but you’ll pay more each year as you get older.
2. Leveled Premiums
These rates are also established using your sex, age, and the size of your policy. Your rates are usually locked in for life as long as they’re paid. They can’t be increased due to changes in age or health.
3. Capped Premiums
These plans have a set monetary or age limit. Once you’ve reached it, you’ll keep your coverage, but will no longer have to pay premiums. For example, if you’re capped at $10,000, you won’t have to pay any more premiums once you’ve paid that amount. If your policy has an age limit of 95, your coverage will continue once you hit that birthday, but you’ll be done paying any premiums.
4. Payout Guarantee Premiums
Your beneficiary is guaranteed to be paid whichever total is higher: the exact amount of premiums you’ve paid or the original insured amount.
