Can I Buy Burial Insurance for My Parents?
Learn the practicalities of purchasing burial insurance for your parents, ensuring their final expenses are covered with clear guidance.
You can purchase burial insurance for parents, providing a financial safeguard for their final expenses. This type of insurance is designed to cover costs such as funeral services, cremation, and other end-of-life expenditures.
Understanding Burial Insurance
Burial insurance, also known as final expense insurance, is a type of whole life insurance policy. Its purpose is to provide a sum of money to cover final expenses, including funeral arrangements, viewing services, and potential outstanding debts or medical bills. Unlike traditional life insurance policies that aim to replace income or cover large financial obligations, burial insurance focuses on immediate, smaller-scale expenses.
A key characteristic of burial insurance is its simplified underwriting process, which typically does not require a medical exam. Eligibility often relies on answers to a few health questions on the application. This makes it a more accessible option for older individuals or those with certain health conditions who might find it challenging to qualify for traditional life insurance. Upon the insured’s death, the policy benefit is usually paid out quickly as a lump sum directly to the beneficiary, providing prompt access to funds for final arrangements. These death benefits are generally not considered taxable income for the beneficiary.
Key Aspects of Coverage
Burial insurance is typically available for seniors, often up to age 85 or beyond. The parent’s health influences the type of policy available, generally falling into “simplified issue” or “guaranteed issue” categories. Simplified issue policies involve answering health questions but no medical exam, often leading to immediate coverage if approved. Guaranteed issue policies, conversely, require no health questions or medical exam, ensuring approval for most applicants, but they often include a two-to-three-year waiting period before the full death benefit is active.
A parent’s consent is required to purchase a policy on their life; they must be aware of the policy and typically sign the application. Without their consent, obtaining a policy is not possible. As the child, you can be the policy owner, responsible for premium payments, and also the beneficiary. The policy owner controls the policy, including changing beneficiaries, while the beneficiary is the individual or entity who receives the payout. Premiums are typically paid by the policy owner, who may be the child.
The Application Process
Obtaining burial insurance for a parent involves gathering necessary information and submitting the application. Before applying, gather specific details from your parent (the insured) and yourself (the policy owner/applicant). From the insured parent, you will need their full legal name, date of birth, address, Social Security number, answers to health questions, and verbal or written consent for the policy.
From the policy owner (typically the child), provide your full legal name, date of birth, address, Social Security number, contact information, and banking details for premium payments. This information is crucial for accurately completing the application form and for policy issuance.
Once all necessary information has been gathered, the application can be submitted through a licensed insurance agent, directly with an insurance company (online or phone), or via an online insurance broker. The underwriting process for burial insurance is typically quick, often relying on health questions rather than a medical exam. Upon approval, policy issuance and activation can occur relatively fast. For guaranteed issue policies, however, a waiting period, typically two to three years, will apply before the full death benefit is active for natural causes of death. The initial premium payment is usually processed at the time of application or policy activation.