How to Choose the Right Cremation Insurance Policy

Given the rising cost of performing final rites in the US, cremation or burial insurance policies are no longer optional. As per independent brokers like Gary P. Cubeta of Insurance for Final Expense, cremation insurance is meant to protect your family members from excessive financial burdens when you pass away and leave behind a wish to be cremated.

People know more about general or term life insurance policies than cremation policies -- partly because it's less advertised and marketed. So how can uninformed buyers select the right policy? In this article, learn what to look for when selecting cremation policies.

Cremation vs. Burial vs. Funeral

When you're in the market for a final expense insurance package, you'll find three different options. They are cremation insurance, burial insurance, and funeral insurance. Although companies market them interchangeably, technically, they're not the same. More importantly, they affect the cost of the insurance

Burial is the process of burying the deceased in the soil. The body can be placed inside a casket or buried as it is. When you're purchasing a burial insurance policy, it covers all costs associated with burying your body.

Cremation, on the other hand, is the process of burning the body to ashes. In spiritual terms, it is defined as the process of covering the body to essential chemical compounds via combustion or vaporization. Cremation policies cover the cost of cremating your body.

When talking of a funeral, it's a ceremony to honor and remember the dead. This varies from one culture to another. In few cultures, the funeral can last several days. Funeral insurance policies cover the entire cost.

With that said, you need to look for certain things in a cremation insurance policy to select the right one.

Calculate the Cost

The first and the most critical thing you need to do is calculate the cremation cost. As explained earlier, the process of the final rite affects the price.

When you're selecting a cremation policy, you're covering the cremation cost. In other words, you'd want your body to be burned to ashes.

The cost also depends on whether you're performing a direct or traditional cremation.

Direct cremation is a low-cost option. It involves cremating your body with no memorial or funeral. So there's no casketing or any gathering. The funeral service provider transfers your body to the burial ground and cremates your body.

In the case of traditional cremation, there's the involvement of preparation, embalming, and memorial.

Direct cremation costs somewhere between $1,000 and $1,500 on average, while traditional cremation can go up to $7,000. But everything depends on what you want to include as part of your final rites.

Prepaid Cremation Policy

To cover your cremation cost, the best option is to opt for a prepaid cremation policy. It allows you to pay for the cremation process in advance.

One benefit to this is that you won't have to worry about inflation. If the cremation price goes up in the future, it won't affect your cremation cost. You (or your family) can expect to pay the same price.

The face value will cover the entire cost of cremation. After you've calculated the face value, you can pay a premium per month for a certain number of months. Then once you pass away, the money will be transferred to your loved ones so that they can pay for your cremation. But you also have the option of buying the policy in a lump sum.

The policies vary from company to company. So it's essential to read through the terms and conditions of the policies.

Guaranteed Issue or Simplified Issue?

The final decision you have to make is choosing between guaranteed issue cremation policy and simplified issue cremation policy.

The difference between these two can seem subtle but it's essential. In case of a guaranteed issue, all the applicants are accepted. There's no medical questionnaire involved. So no questions asked. The downside is that the cost goes up. Companies usually charge more to provide the coverage since they're undertaking more risk.

When you're applying for a simplified issue policy, you'd be asked to fill out a medical questionnaire along with the application. With this, the carrier checks your current health before offering coverage. Although the acceptance rate is relatively high, you might get denied if you have a severe illness. As an upside, you have to pay less than the guaranteed issue equivalent if you do get accepted.

Until and unless you're suffering from a significant illness, it's recommended that you opt for simplified issue cremation policies.

When purchasing cremation insurance policies, you should work with a reliable broker like Gary P. Cubeta of Insurance for Final Expense. 

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