People go in for comprehensive insurance policies, so that they can leave behind a substantial sum of money, in the form of death benefits to their beneficiaries. The proceeds from the insurance can be used to address all burial costs. The remainder of the cash benefits is distributed to family members as identified by the policyholder.
In many cases our parents may not be able to arrange for an insurance policy as they may be facing certain financial constraints. Or in some cases, they may be suffering from a severe medical condition, which might make them ineligible for life insurance. In such an event, you can act as a dependent and set up a burial insurance in their names. This way you do not have to worry about arranging for funds to pay for their burial expenses
While bringing the topic up with your parents can be an awkward encounter, it is important to go through with it when you consider the benefits and long-term implications of buying a burial policy. Funeral costs have witnessed a steep increase in prices over the last couple of decades. Today it can cost anywhere between $6,000 to $15,000 to conduct a funeral. This is a substantial sum of money for most American homes. Be genuine and straightforward and approach the issue tactfully with your parents. They love you and will understand the significance of what you are trying to do for them.
Burial Insurance Options for Elderly Parents
Term Life Insurance
If your parents are healthy, it may be a good idea to go in for a term life policy to help cover for all the burial costs that may arise later. Term life policies are one of the most affordable insurance packages available and have low rates of premiums, which stay constant for the entire duration of the policy. Your parents will made to undergo a medical test to check for their overall state of health and the underwriters of the insurance company would formulate a term life policy based on the test results obtained. You could go in for a term life policy of 5,10,15 or 20 years depending on your requirements. A lot of seniors tend to outlive their policy, so it would make sense to go in for a term life product, which can later be converted to whole life insurance. With a comprehensive term life policy, you can be assured of the fact that all the burial expenses of your parents are well taken care off. The remainder of the proceeds from the insurance can also be later on used by you to cover for mortgage, your kids college fund or other expenses.
This is one of the most popular investment options for people specifically on the lookout for burial insurance. If your parents are healthy, you can apply for insurance for burial and it does not require medical examinations. The insured party is covered for life and the rate of premiums also remain constant. This type of policy is also less invasive when you consider the fact that your parents do not have to subject themselves to a medical test. If the parent is healthy, then he or she becomes eligible to receive full benefits the moment payments for the first premium is made. The policy also usually offers cash value benefits, which accrues over time. The proceeds from the policy can be used to address all burial costs and other related funeral expenses.
Graded Benefits Burial Insurance
For seniors with health concerns, burial policies with graded benefits may be an ideal choice. Here too the applicants do not have to undergo medical examinations and are liable to receive coverage for life. The premiums remain constant and the policy also accumulates in cash value over time. The key difference in this type of policy is that the insured party is liable to receive only partial coverage for the first two years. The policy will offer full benefits only from the 3rd year of buying the burial insurance.