$5000 Burial Insurance Policies

What is Burial Insurance?

Burial insurance or funeral insurance or final expense insurance is a type of whole life insurance. How it works is pretty simple, for as long as you live you pay your insurance provider a certain amount. On your death, the insurance provider pays your beneficiaries a tax free lump sum called the death benefit.

The aim of this death benefit is to give your beneficiaries cash to pay for your end of life expenses. These expenses include funeral and burial costs, debts, unpaid bills, etc. once these expense are paid, any amount left is the beneficiaries’ and they can use it however they like.

Burial insurance is a type of whole life therefore it lasts forever and the premiums never change. This makes the policy simpler and easier to understand.

Do keep in mind that the proceeds from the insurance policy can only cover end of life expenses and not major expenses like college tuition or income replacement or buying a house, like other whole life insurance policies.

What are the major components of burial insurance policies?

Premium payments, cash value and death benefit are the three main components of all burial insurance policies.

Premium

The premium is the price you pay for your insurance policy, the cost of coverage. You can make this payment yearly or more frequently, every 6 months, 3 months, or monthly. Many insurers charge more for frequent payments and offer discounts on annual payments so annual payments can be a good idea in the long run.

Death Benefit

The death benefit is also called the face value. It is the amount your beneficiaries receive from the insurance company on your death. The amount of the death benefit depends on the insurance policy you buy.

Cash Value

Whole life insurance fives you the advantage of a cash value component. Part of your premiums go to building this cash value. The cash value accumulates tax deferred in a separate account that servers as a savings account. It often takes a takes a very long time to accumulate, decades in most cases.

You can withdraw from the cash value during your life. But what most people don’t know is that you are charged an interest till you pay that amount back. If you fail to do so, it is deducted from your death benefit. So if you pass away without paying back, your beneficiaries will receive a very small amount or nothing.

If you want to drop your burial insurance policy, the insurance companies pays you the cash value that accumulated. On your death, the cash value stays with the insurance company, unless you purchase a rider that states that both the death benefit and cash value go to your beneficiaries.

What makes burial insurance unique?

Burial insurance has some many unique features that distinguish it from other life insurance policies. These policies are designed to absorb a lot risk.

Lenient Underwriting

Underwriting is the process used by insurance providers to price risk. It involves the evaluating and analyzing the risk associated with a potential client. This is then used to calculate the likelihood of the client claiming the policy.

Since burial insurance is designed for clients who might have major health issues, it has the most lenient underwriting process among other insurance types.

Small Face Value

Face value is another term for death benefit. Funeral insurance gives you the advantage of opting for coverage as low as $1000! Traditional insurance policies generally have a minimum amount of $50,000. This is a great feature as you have the choice of purchasing as much as you need.

$5000 Burial Insurance Companies

This section gives a brief overview of the different $5000 life insurance policies available with different insurance providers.

The prices for these $5000 life insurance policies are for non-tobacco users. So if you have smoked during the last one year, be prepared to pay around 20% to 50% more compared to non-tobacco users in your age group. The exact rates will vary depending on the insurance provider.

There may be some insurance companies willing to offer you non-tobacco rates if you use pipe or chew tobacco.

As mentioned above, all the $5000 life insurance policies are whole life insurance therefore the policy will never expire and the rates will remain constant.

  1. Sentinel Security Life

 

AgeFemale Non TobaccoMale Non Tobacco
50$13.03$15.37
55$14.97$18.72
60$18.40$22.72
65$22.72$28.41
70$28.07$36.47
75$39.68$50.22
80$55.65$75.04
85$81.93$102.88

 

  1. Royal Neighbors of America

 

AgeFemale Non TobaccoMale Non Tobacco
50$17.41$20.26
55$19.26$23.41
60$19.56$25.21
65$22.61$29.36
70$27.86$36.96
75$39.36$53.96
80$53.96$74.61
85$72.21$102.66
  1. Liberty Bankers Life
AgeFemale Non TobaccoMale Non Tobacco
50$15.10$17.57
55$17.51$20.71
60$19.65$25.21
65$23.72$30.28
70$29.71$38.97
75$40.41$52.39
80$56.89$75.71
  1. AIG
AgeMaleFemale
51$26.96$18.92
52$27.36$18.93
53$27.82$20.00
54$28.22$20.97
55$28.68$21.84
56$29.45$22.62
57$30.27$23.49
58$30.98$24.17
59$31.65$24.86
60$32.10$25.50
61$32.58$26.01
62$34.77$27.52
63$36.97$28.90
64$39.08$30.09
65$41.10$31.00
66$43.08$31.78
67$44.81$33.40
68$46.33$35.96
69$47.75$37.16
70$48.99$38.26
71$50.09$41.93
72$54.59$45.42
73$58.99$48.76
74$58.99$51.83
75$66.97$54.59
76$70.28$62.38
77$81.97$69.73
78$93.20$76.60
79$103.98$83.02
80$114.31$88.71
81$124.22$90.69
82$127.59$92.83
83$131.19$95.83
84$145.08$98.17
85$151.97$100.53

 

Is $5000 burial insurance really worth it?

When you start looking for insurance policy, you need a rough estimate to help you get started. This estimate will obviously change once you analyze your needs, requirements and budget. Though a $5000 policy sounds cheaper life insurance choice, here are some reasons why a $5000 life insurance policy might not be that bad.

Reasonable amount

Choosing a cheaper life insurance policy at the start is a good idea. If you feel in the future that the amount is not enough, you can always purchase more coverage. Purchasing an expensive policy will only break your bank and result in a policy lapse in the worst case.

Saves you family drama

Families can start fighting over money, it is a sad reality. If you fear this for your family after your death, a cheaper life insurance policy is the best. Insure an amount that will only cover your end of life expenses and leave nothing extra.

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