Even at the very best of times, no one is prepared and ready enough to deal with the passing of a loved one. The loss of a loved one, whichever way the death blow hits, is devastating, and the situation is a bit dire, especially now with COVID-19.
With social distancing measures in place and limitations on the number of people that can gather restricted, we are no longer able to go through the grieving process as we would in the past. Unfortunately, the current situation only exacerbates the feelings of isolation and loss, and it is something that you wouldn’t wish on your worst enemy.
Today, small gatherings are acceptable for funerals, even as strict precautionary measures are put in place, depending on the state you live in. There might be some glimmer of hope around the whole pandemic situation, with the identification of potentially effective vaccines, but until such a time that this gets back to as close to normalcy as possible, and we are all allowed to grieve the loss of our loved one as we’d prefer, it looks like we have to make do with the options available today.
Some of these options include live streaming services by funeral homes, and other funeral homes give you the option of having a perpetual memorial space on their website, all in a bid to make sure that family and friends get to grieve for their loved ones.
Which brings us to the important question – how prepared are you for your passing?
Yes, it sounds morbid, and planning your funeral may not be one of those things that you wake up talking about, and you may not hold dinner table discussions around how you may want to be laid to rest, yet this is an important subject that we must talk about. It may be difficult, but you may want to look for better ways of broaching this topic.
Sometimes, as hard as it may be, estate planning and updating your last will and testament may not be enough, as you need to come up with specific guidelines and a list of tasks to be completed after you pass on. Along with the guidelines, you’ll also need to set up a kitty for your funeral/ burial expenses, either with your loved ones, the cremation/ funeral home, and/or a final expense insurance company.
In this article, we’ll look at cremation insurance, as well as everything you need to know about this insurance policy, and when it is an ideal option for you.
What Is Cremation Insurance?
Cremation insurance refers to a part of the whole life insurance policy designed to help to cover the specific cremation costs after your demise. The proceeds of this insurance policy are designed specifically for settling cremation costs, as well as all other final expenses.
Generally, the coverage amount from this policy is between $2,000 and $40,000; and the best part is that the death benefits’ payouts are pretty fast, and your application for the policy will be approved without any medical exams, which means that you will qualify for this policy even if you have chronic/terminal illness/ issues. The other features of this type of insurance are that the prices of the insurance premiums cannot go up, and the value of the coverage will not decrease for whatever reason, with the policy designed to last a lifetime from the day you sign the policy.
Thanks to the features of the cremation insurance policy, you and your loved ones can always count on it being there when needed to cover your cremation and all other ends of life expenses.
Since cremation insurance is a type of life insurance, its benefits are paid as tax-free cash benefits to your beneficiaries, and the best part is that there aren’t any specifications or restrictions on how the money will be used. So, if after paying for the cremation there is some money left over, your loved ones get to use the money as they’d like.
What are the Benefits of Cremation Insurance?
Cremation insurance gives you the assurance that your loved ones won’t have to struggle with your funeral and burial expenses once you are gone. It also ensures that your wishes to be cremated are honored without any financial difficulties.
But that is not all that you get from getting a cremation insurance policy. There are a host of other benefits that come from getting a cremation insurance policy. These benefits include:
Cremation insurance has, without doubt, one of the most relaxed underwriting processes. And this underwriting process is not only simple but also follows the most lenient procedures. Your application for the cremation insurance policy will be approved fast, existing serious health conditions notwithstanding.
Generally, anything that would result in a declined application for your traditional life insurance policy would be approved when it comes to cremation insurance. The cherry on top is that some of the cremation insurance policies will be approved even with no underwriting at all.
To land the best deal and to avoid settling for a cremation policy with less than ideal terms, you should look for an insurance policy with the guaranteed issue plans. With these policies, you’re certain that the acceptance is 100% guaranteed, no matter what.
Affordable options with very small face values
The other thing that really stands out from cremation insurance is that some of the insurance carriers would allow you to buy cremation insurance policies for as low as $1,000, meaning that if you are going for something super simple and affordable, then this would be an excellent option for you.
On the other hand, you have the option to go as high as you’d like. Thanks to the ability to purchase the very low coverage amounts and also the high maximum coverage, you get to buy what suits your needs/ budget. It’s also worth noting that some of the insurers offer cremation insurance going for $25,000 and $50,000.
Overall, cremation insurance gives you control and the peace of mind you need, especially during your final days.
How Much Does Cremation Insurance Cost?
Generally, the cost of cremation insurance depends on a number of factors, including your age and sex. But generally, the average cost of an insurance policy is about $25 per month, with the face value of most coverages being around $10,000. Essentially, the net price of the insurance policy could be higher or lower, based on your state of residence, health, gender, and also the exact value of the coverage you choose to buy.
Above all, however, the cost of the cremation insurance policy you choose to settle on will depend on your needs. This means that if you are looking for the best plan for handling your final expenses, you’ll need to first settle on what you’d prefer, for example, the type of service you’d like.
Choosing the cremation insurance policy means that you’ve opted for cremation rather than burial, but that isn’t all that you need to think about. Because as hassle-free and fast as cremation sounds, the cost of cremation could be higher than expected, depending on where you live.
If you’ve settled on cremation and now you only need to settle on the plans that work best for you, the important thing to do would be for you to look for the best type of cremation service you’d like. Below, we look at the common types of cremation (and services), plus the associated costs.
Direct cremation refers to the most basic cremation service, and it costs anywhere from $600 to $1,200. With direct cremation, there are no events or funeral services incorporated in the cost, which means that you are only paying for the cost of transferring your body, its cremation, and the placement of the ashes in a basic urn. Direct cremation costs vary depending on the funeral home you choose.
Direct Cremation plus Viewing
For direct cremation with an extra service for people to view the body before it’s cremated, you’d have to pay for the direct cremation plus viewing option. The cost of this plan depends on what the funeral home charges for cremation and viewing, and the total cost will be between $1,400 and $2,000.
Note that if you choose this plan, the funeral home will do the bare minimum in terms of the preparations, but you get to select the preferred viewing time that you’d like for your loved ones to come and view your deceased body, for one last time. That said, you need to keep in mind that requesting more viewing time at the funeral home will increase the cost charged.
At the same time, the amount charged by the funeral home will be higher if your body had to be autopsied because the funeral home will have to charge more for the preparation of the body (for viewing) and cremation. Often, the cost of viewing plus preparation will range from $700 to $1500, on top of the quoted direct cremation costs.
Full-Blown Funeral with Cremation (not Burial)
Did you know that you can have a complete funeral service if you are cremated? Most people don’t think that this is possible and that the funeral service is only a preserve for situations where one is buried, but the truth is that you can still have the complete funeral service when you choose cremation.
If you choose this option, the cost charged will be between $4,000 and $6,000; and your loved ones get to send you off as they would in a traditional funeral, just without the burial bit.
Confused? Don’t be. Instead of the traditional funeral with a casket, there will be an urn in place of the casket, and everything else is the same. So, if you prefer cremation but still wish for your loved ones to accord you the whole funeral feel; from the convoy of cars from the selected funeral home to your final resting place, the delivery of a eulogy, etc., you can still do it with this option, and you only need to specify these requirements in your last will and testament, then have the cremation insurance in place.
Other costs to consider
As you look for the best cremation insurance for you, you might want to look for one with a generous offer for your loved ones to be able to give you the desired send-off. So, in addition to the costs above, you also need to look for insurance coverage that would cover additional costs like:
- Outstanding debt
- Income replacement
- Travel costs
- Time off work for surviving kids/ loved ones
How Does the Prepaid Cremation Insurance Policy Work?
The prepaid cremation insurance works in a way that allows you to pay for your funeral in advance. Most importantly, it gives you the freedom to choose how you’d like your send-off to be, not only giving you control over your send-off but also reducing the burden on your loved ones.
In most cases, the total value of the insurance coverage will cover the funeral and cremation costs, and the remaining money will be used by your loved ones in whichever way. The other advantage of prepaid cremation insurance is that the insurance payout isn’t liable for inheritance tax.
Like any other insurance cover, you can buy the policy in a lump sum when making the initial purchase, or you could and pay for the policy in monthly installments. The upside is that the premiums are fixed during the initial application, and you won’t have to worry about the premiums going up after some time.
But there is one caveat, the cremation insurance policies aren’t covered by the Financial Conduct Authority, and the coverage by the Funeral Planning Authority is on a voluntary basis, which means that if the insurance company goes bust, your policy and money will also go up on flames. You could, however, save yourself some trouble and protect your interest by making your payments upfront using your credit cards – these payments will be protected.
How to Find the Best Cremation Insurance Policy
Here are some important guidelines you need to stick to for the best cremation insurance policy covers.
Cost and Needs
The first thing you need to determine is how much cremation insurance coverage you will need. This is an important consideration, and also the most important thing to keep in mind is that you must be 100% comfortable with your first premium payment. Also, buy the insurance policy you can afford, even when things are bad for you financially, but also make sure that the value of the policy will adequately cover your cremation and funeral needs so that your loved ones won’t have to make any payments out of pocket.
How to Buy your Insurance Policy
You could buy the policy online or via mail, and you won’t have to ever talk to an agent. But as appealing as this sounds, especially because the policy will be sold to you attractively, with no medical screening needed and that you’d qualify even with chronic/ terminal illnesses, you shouldn’t rush into signing that application.
As amazing as it sounds, such policies, which are referred to as the guaranteed acceptance life insurance, are not only very costly given the huge risk that the company is taking, and also they have a minimum 2-year period waiting time. During the waiting period, your insurer won’t have to pay the full death/cremation benefits, and the best they can do is to pay back the premiums paid plus a 10-20% interest.
So, to avoid the high insurance cost and for a better understanding of the policies, it may be a good idea for you to talk to an agent first.
Alternatively, you could work with an independent insurance agent—this an agent who works with multiple insurance companies. If you choose this option, the agent will help you choose the best insurer and insurance policy by first evaluating your health. The upside of working with an independent agent is that they don’t have loyalties to specific companies, which means that they will match you with the best insurance policy from whichever top-rated insurer.
- Can you prepay for cremation services before your demise?
Yes. You can prepay the cremation costs, and this can end done without an insurance policy. You’d have to work with the chosen crematorium or funeral home directly, and you can opt to pay in installments or in lump sum. You could also check with your employer or other local affiliations like unions because they often offer funeral and cremation assistance services.
- How much does it cost to be cremated?
The cost of cremation services will vary depending on your requirements (for example, a special urn, memorial service, burial plot, etc.), but the average cost of cremation is between $3,000 and $6,000. However, there are cases where the total costs exceed the $10,000 mark.
- Does the burial insurance policy cover cremation?
Unfortunately, no. the burial insurance cover will not cover cremation since these two are totally separate procedures with different costs.
- Should you prepay your cremation?
Prepaying might be a good idea for you because it may cost less in the end. Also, with the ever-rising cost of inflation, prepayment means that the account is settled by your loved ones won’t have to pay more because of inflated costs.
Prepayment will also lift off any financial burden from your family and friends as they grieve. And there’s also the fact that the prepayment means honoring your final wishes.
- Who has the right to ‘ownership’ of your cremated ashes?
It varies from state to state. But generally, it goes to your next of kin, but in an orderly fashion, starting with your spouse, adult children, parents, and finally adult siblings. And in about half of the states, you could specify the person you’d want to dispose of your remains. Most states will honor your last wishes regarding the chosen ‘owner’ of your remains.
- How do I arrange for a cremation?
There are two options– either make plans with the funeral home if they offer the services or you could elect to work with the crematorium directly. If you opt to work with the funeral home, you’ll get help from the director of the home who would help you in gathering the necessary documents for cremation approval and the death certificate, arranging the body’s transportation to the crematorium, as well as the disposition of remains, as per your wishes. If you opt to work directly with the crematorium, you’d have to do everything by yourself – there are no specific steps here.
- Will the state pay for the cremation?
Only if you live in a state that offers cremation financial assistance while also covering other funeral costs, this often happens via low-cost loans or grants to the deceased family if they cannot afford to pay for the services.
- What other names does cremation insurance have?
Though referred to as the end of life or final exoense insurance, it’s recommended to stick to cremation insurance because these other terms are often used with burial insurance, which is different from cremation insurance.
To find the best cremation insurance policy, shop around, ask for help, know what you want, know your alternatives, and work with an independent agent for the best plans. You should also check the insurer’s financial strength and customer reviews.