Burial insurance and guaranteed issue life insurance are both types of life insurance designed to cover final expenses, such as funeral and burial costs. However, they have some key differences.
Burial Insurance
Also known as funeral insurance or final expense insurance.
Generally a whole life insurance policy with a smaller death benefit, typically ranging from $5,000 to $25,000.
The purpose is to cover funeral and burial expenses, but beneficiaries can use the funds for any purpose.
Underwriting may involve some health questions, but it is generally less stringent compared to traditional life insurance policies.
Premiums are often level and do not increase with age.
Guaranteed Issue Life Insurance
This type of insurance is designed for individuals who may have difficulty obtaining coverage elsewhere, often due to health issues.
Guaranteed issue policies typically have no medical underwriting or health questions.
Coverage is usually limited to a smaller death benefit, typically in the range of $5,000 to $25,000.
Premiums tend to be higher compared to fully underwritten policies because the insurance company takes on more risk by insuring individuals without assessing their health.
When deciding between burial insurance and guaranteed issue life insurance, consider the following factors:
Health Condition If you have serious health issues, guaranteed issue life insurance might be a better option since it does not require a medical exam or health questions.
Coverage Amount Determine how much coverage you need for final expenses. Both types of policies typically offer smaller death benefits compared to traditional life insurance.
Cost Compare premiums and payment options for both types of insurance. Guaranteed issue life insurance may have higher premiums, but it may be the only option for individuals with significant health issues.
Coverage Purpose If you want a policy specifically for funeral and burial expenses, burial insurance might be more tailored to your needs.
It’s essential to carefully review policy details, terms, and conditions before choosing either option. Additionally, consider consulting with a licensed insurance agent or financial advisor to help you make an informed decision based on your unique circumstances.