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As we age, we become more practical about end-of-life realities. We also realize that death comes with costs. Many seniors do not wish to burden their friends and family with the additional stress of paying for a funeral on top of dealing with grief, so they turn to funeral insurance for seniors.
Seniors interested in funeral insurance must ask themselves these four important questions:
- How much coverage do I need?
- What type of funeral insurance can I qualify for given my age, current health condition and any existing pre-conditions?
- How much will it cost?
- What is the best way to get funeral insurance for seniors?
Let’s start though with understanding what funeral insurance actually is.
Introduction: What is Funeral Insurance?
Did you know that funeral insurance is classified as a life insurance product? Funeral insurance for seniors is a type of life insurance that is designed to take care of things like your casket, the cost of the funeral service, expenses to fly in family and more. Depending on the type of insurance you get, the amount can be spent either on final expenses only (e.g. burial insurance plan), or at your discretion (e.g. guaranteed life insurance plan).
You may feel that as a senior, especially if you are in poor health, that you will not qualify for funeral insurance for seniors; however, thanks to simplified issue and guaranteed issue policies, you have a very high chance of acceptance.
1. How Much Funeral Insurance Coverage Do Seniors Need?
Funeral costs vary, which means the amount of coverage you need varies too. Choices include a casket for burial or an urn for cremation, a choice of flowers and type of service. Do you need the service broadcasted on the internet so family overseas can take part? Will you be holding the service outside and need a tent for weather protection? Once you know the type of funeral you would like to have, you will have a better idea of the costs – and coverage – required.
Approximately 65 per cent of Canadians choose to be cremated. Cremation costs vary between $1,400 and $4,500, whereas burials starts at $3,500 for the simplest casket and almost no additional services. Costs can go as high as $15,000 for a high-end ceremony. However, the average cost is around $9,000.
In the case of a cremation, consider insurance coverage of $5,000 while burial policies of $10,000 to $15,000 would be more appropriate. One of our previous posts provides more details about costs of cremation and in-ground burial in Canada.
2. For What Types of Funeral Insurance Do Seniors Qualify?
This is where seniors often make the mistake of assuming their only choice is a guaranteed issue policy, when in reality, there are three policies to consider.
Standard/Traditional Policy: If you are in good health and under a certain age, you may qualify for a standard policy with low premiums.
Simplified Issue Policy: If you have medical conditions that could jeopardize your chance of getting a standard policy, this option allows you to skip the medical exam. Premiums are higher, but it is a great way to get coverage when you have a condition such as diabetes.
Guaranteed Issue Policy: While this option carries the highest premiums, it is also a sure bet. If you have a terminal illness, such as cancer, which would cause you to be rejected for a standard or a simplified issue policy, guaranteed issue allows you to get coverage to help with end-of-life expenses.
Anyone looking into funeral insurance for seniors should consult with an insurance broker. A broker has access to many different products from several suppliers; as opposed to a captive agent that can only sell the products of their company. Since brokers can offer more options, you get the best rate and policy for your situation. Using a broker does not cost you any money. Their fees are paid by the insurers.
3. How Much Does Funeral Insurance for Seniors Cost?
The price for a policy is dependent on many factors, such as which type of policy you qualify for and the type of service you would like to have. To get an idea of costs, however, let’s look at the most expensive option – a guaranteed whole life burial insurance policy. The following numbers are based on Gerber’s life burial plan. (Numbers vary across different providers.)
Females
- If you are 65 years old and want funeral insurance coverage for $5,000 or $10,000, you will pay $30/month or $60/month in premiums.
- If you are 75 years old, your premiums will be $71/month or $140/month respectively.
Males
- If you are 65 years old and want funeral insurance coverage for $5,000 or $10,000, you will pay $37/month or $74/month in premiums.
- If you are 75 years old, your premiums will be $55/month or $110/month respectively.
There are ways to save money on burial insurance policies; a broker can help you access all your options.
4. What is the Best Way to Get Funeral Insurance for Seniors?
Two major ways to get a Funeral Insurance Plan are through an insurance agent / directly from an insurance company or via an insurance broker.
Insurance Agent or Directly From an Insurance Company (Captive Agent): Insurance agents typically work for one insurance company so they can only sell the products of that company. If you want to compare similar products, you need a broker.
Licensed Insurance Broker: Working with a licensed insurance broker who has extensive expertise in funeral and burial insurance allows you to compare different plans and choose the best option.
The most intelligent and frugal way to get funeral insurance for seniors is through a broker to make sure that you have options to choose from. InsurEye can connect you with an expert in life and funeral insurance who also has extensive experience working with seniors and is familiar with the challenges you face. Our independent brokerage partner will provide you with more information or a free quote for a funeral insurance for seniors. You are not obligated to make a purchase and you will never be pushed to do so. InsurEye and our insurance partners know the importance of making informed choices, so we help you get the information you need.
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