How Cremation Insurance Can Help Pay for Cremation Cost

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None of us like to think about our death.

But as you move into your golden years, it’s a good idea to start thinking about what you want for the end of your life. Of course, one of the biggest questions during that process will be what you want to have done with your body after you pass.

If you have planned to be cremated, you may want to get a cremation insurance policy that can help pay for the cost of those services. Keep reading to learn more about this kind of life insurance policy and how it can help you cover your cremation cost.

What Is Direct Cremation?

Before we get into cremation costs, let’s talk about direct cremation.

In essence, a direct cremation handles every aspect of cremation, from the body’s transport to the return of the ashes. This is a popular option offered by nearly every funeral home as it serves as an all-inclusive package that will take care of every step of the cremation process at a flat fee.

The services included within a direct cremation package will vary by the funeral home. You’re likely to find packages that will offer basic cremation services to higher-end packages that will provide a magnitude of different services but at a higher cost.

All direct cremation packages will start by covering the body’s transport to the crematorium and often includes staff services, securing authorizations and permits, and basic use of facilities.

Then, the funeral home will perform the actual cremation and return the ashes in a basic container, which can be swapped for a more permanent container at a later time.

Overall Cost of Cremation Funeral

The cost of a cremation funeral will vary depending on the funeral home you choose to work. There is no flat cremation fee used among all funeral homes.

This can make it difficult to get an actual cost of your own cremation services until you have begun speaking with different funeral homes to get prices or until you have passed away and it has become the financial responsibility of someone close to you.

However, there is a way to get a general idea of how much it will cost for a cremation funeral before contacting multiple funeral homes. Knowing this information can help you financially prepare for these future expenses.

The National Funeral Directors Association NFDA, the worlds leading and most trusted association for funeral professionals, researches funeral costs each year.

Through its organization of 20,000 members representing nearly 11,000 funeral homes, the NFDA conducts an annual survey with its participating members about what they are charging for the funeral services they offer.

The data is compiled based on national and regional pricing to release an annual average cost for funeral services for burial and cremation services.

This information allows the NFDA to get an idea of how much funeral services continue to rise with each new year while giving people a better idea of how to prepare for the financial expense of end-of-life costs.

According to the latest 2021 general price list, the national median cost of an adult funeral with viewing and cremations costs an average of $6,970.

Below is a recent chart breaking down the costs of cremation funeral services released by the NFDA for 2021.

2021 NFDA Average Cremation Cost Breakdown

Cremation ServicesCost
Non-declinable basic services fee:$2,300
Removal/transfer of remains to funeral home:$350
Embalming:$775
Other preparation of the body:$275
Use of facilities/staff for viewing:$450
Use of facilities/staff for funeral ceremony:$515
Service car/van:$150
Printed materials (basic memorial package):$183
Cremation fee (if firm uses a third-party):$368
Cremation casket:$1,310
Urn:$295
Median cost of a funeral with viewing and cremation:$6,970

Keep in mind the costs shown in the above chart includes services that may not be needed for everyone.

For example, a direct cremation with no service, viewing, or casket can reduce the overall cost by a few thousand dollars.

Since direct cremations are a package offering, prices can range anywhere from as low as $1,000 for a basic cremation to $10,000 for a full-service cremation package. Pricing all depends on the services offered within the package being offered by the funeral home.

Cremation Costs vs. Burial Costs

If you’re crunching the numbers from the price chart above, you may be thinking cremation isn’t such an affordable option after all. However, you may be surprised to learn that this option is actually much cheaper than the cost of a full burial.

In fact, on average, you’ll save more than $2,000 by choosing to be cremated rather than buried.

When you get buried, you have to pay for costs that are generally not required with cremation. For example, burial often requires a casket, vault, grave, and headstones, whereas cremation typically does not. Plus, you also need to factor in the cost of the hearse rental to deliver the remains to the gravesite.

As with cremation costs, the NFDA, since 1960, has been studying the average cost of an adult funeral year after year. Below is their most recent look at the national medical cost of an adult funeral with viewing and burial.

2021 NFDA Average Burial Cost Breakdown

Cremation ServicesCost
Non-declinable basic services fee:$2,300
Removal/transfer of remains to funeral home:$350
Embalming:$775
Other preparation of the body:$275
Use of facilities/staff for viewing:$450
Use of facilities/staff for funeral ceremony:$515
Hearse:$325
Service car/van:$150
Printed materials (basic memorial package):$183
Metal burial casket:$2,500
Vault:$1,572
Median cost of a funeral with viewing and burial:$9,420

As with cremation costs, burial costs can vary significantly based on the services needed and the type of materials purchased. For example, a casket alone can range from a few hundred dollars to several thousand dollars.

However, there will also be services that are not required which can reduce the overall cost of a burial. The majority of most funeral homes offer direct burial or immediate burial packages that can offer the most basic burial services keeping the costs at a minimum.

However, even with a minimum burial package, cremation will still be the cheapest option.

How Can Cremation Insurance Help?

Suppose you’re wondering how on earth you and your family are going to pay for all these expenses when the time comes. With the average cremation costing $6,970, that is a lot of money for loved ones to come up with all at once. Not to mention the potential costs of any other end-of-life expenses that may come up.

Fortunately, there is cremation insurance, an affordable insurance plan that can help provide financial protection against the sudden cost of cremation expenses in addition to those other end-of-life expenses.

A cremation insurance policy is really another name for a popular form of life insurance coverage known as final expense insurance.

What is final expense insurance?

Final expense policies are whole life insurance plans designed to handle smaller end-of-life expenses as coverage options range from $1,000 up to $25,000.

They are a popular life insurance option designed for the senior community as they require no medical underwriting. Instead, approval is based on answers to the application’s medical questions. Plus, you don’t have to be in excellent health to qualify.

Suppose a final expense cremation policy sounds like a good plan, and you’re concerned that you might outlive the policy?

In that case, rest assured that coverage offers permanent lifetime protection along with a premium payment that is guaranteed to be locked in for the policy’s life.

In addition, these policies also earn guaranteed cash value growth that builds over time and can be borrowed from whenever needed, especially in emergency cases.

When choosing a coverage amount, it’s a good idea to get a policy that covers at least double what you expect your final arrangement costs to be. This ensures that your family won’t get stuck with a huge bill they can’t afford to pay.

Potential 2-Year Waiting Period with Cremation Insurance

One of the things you will need to be aware of when shopping for cremation insurance is the possibility of a waiting period.

Since this type of life insurance requires no medical exams and can often accept people of all health risks, some policyholders may receive what is known as a two-year graded death benefit policy. 

A two-year graded death benefit means that if the insured dies within the first two policy years, the death benefit payout to the beneficiary is equal to a full return of all premiums paid plus interest of generally 10%. 

Graded death benefit approval is a way for the insurance company to offset the potential risk of accepting an applicant that would be considered high risk and passing away shortly after a policy has been issued.

After the second policy year has passed, the insurance policy automatically becomes a traditional life insurance plan, meaning that the full death benefit is payable to the beneficiary upon the insured’s death.    

If you need a cremation policy, you shouldn’t let the potential of a waiting period discourage you from applying. This is especially true if you are in good health, and even those with a few non-life-threatening medical conditions will likely qualify for coverage without a waiting period.

However, if you have a pre-existing chronic or terminal condition, you may have a waiting period of up to two years.

Cremation Insurance vs. Life Insurance

If you already have a life insurance policy, you may be wondering why you should bother getting cremation insurance at all. After all, isn’t part of the purpose of a life insurance policy to help cover the costs of your final arrangements?

Here’s what you need to know: A cremation insurance policy is life insurance. It pays out a death benefit upon the death of the insured.

So, in reality, if you already have a life insurance policy, the death benefit can be used to pay for cremation expenses. In addition, there are no restrictions on how your beneficiary uses the death benefit payout once received.

However, there are some differences between the intended use of a traditional life insurance policy and a cremation insurance policy.

A traditional life insurance policy is typically designed to help protect your family and the people who depend on you financially after you’re gone.

Take, for example, a term life insurance policy, which can offer large amounts of coverage to help with expenses you would have covered for years to come after your death, such as replacement of lost income, mortgage payments, etc. 

Now let’s say you’re in your senior years, don’t have life insurance coverage, and only need a small amount of coverage to cover end-of-life expenses.

In most cases, the death benefit of a cremation insurance policy is limited to a maximum of $25,000. It is primarily designed to pay for final arrangements. This ensures your passing is as peaceful as possible for everyone involved.

Benefits of Cremation Insurance

The most significant benefit of cremation insurance is the financial protection it offers your family.

After your passing, your loved ones will be grieving your loss and trying to handle other affairs related to the end of your life. The last thing you want is them having to figure out how to pay for your cremation and funeral services. 

Cremation insurance ensures that your arrangements will be covered before the end of your life. This can also help to make your last days more peaceful, knowing that your final wishes will be followed.

And suppose you have a life insurance policy and supplement it with a cremation insurance policy. In that case, you’ll be able to rest easy knowing your family will be taken care of both during and after your funeral.

Who Needs Cremation Insurance?

When deciding if you should get cremation insurance, you should look at your overall debt and the potential of that debt being passed onto loved ones.

If your debt were to be passed onto your loved ones, your family might need to dip into their own savings to pay for those debts. Having a plan set in place to handle final arrangements can prevent that from happening.

To avoid your financial burden being passed onto your loved ones, having a dedicated insurance policy to cover the cost of your cremation can make sure your final wishes are respected and keep the financial burden from being passed onto your loved ones.

When is a cremation policy not needed?

While having a cremation policy in place can be beneficial in keeping the financial burdens of end-of-life expenses placed onto loved ones to take care of, a policy may not always be needed.

If you have self saved for these expenses, there really wouldn’t be a need to purchase a policy. Plus, many funeral homes offer pre-paid funeral packages that allow you to make payments in advance, so when the time comes, your funeral cost will have already been taken care of.

Cremation Insurance Costs

How much you pay for cremation insurance will depend both on your health and the amount you want in your policy. If you’re in good health, you should be able to get a policy for a relatively low amount. Your policy will also be cheaper per month the younger you are when you get it. 

If you’re in good health and in your 50s, you could pay as little as $30 a month for cremation insurance. If you’re a little older, have a medical condition, or want a larger payout on your policy, you could be looking at a hundred dollars a month or more.

To give you an idea of what it cost to buy a cremation insurance policy

Cremation Life Insurance Rate Chart - $10,000

MaleExcellent HealthAverage HealthPoor Health
Age 50$30.55$34.66$44.09
Age 55$35.76$42.37$57.93
Age 60$43.49$51.11$63.89
Age 65$53.97$66.43$85.16
Age 70$69.78$101.90$106.00
Age 75$97.30$135.00$149.66
Age 80$136.34$190.34$206.32
FemaleExcellent HealthAverage HealthPoor Health
Age 50$24.23$27.67$34.47
Age 55$27.60$34.12$44.28
Age 60$32.71$39.42$51.06
Age 65$40.77$49.35$62.61
Age 70$52.88$69.68$75.53
Age 75$70.49$93.74$108.17
Age 80$101.26$135.32$176.37

The above rates show an example of the monthly cost for both a male/female $10,000 cremation life insurance policy. The rates shown are current as of 12/24/2021.

Getting the Right Coverage

No one likes thinking about their own funeral, but taking some time to plan your final arrangements can help you decide how much you need your cremation insurance policy to cover.

We mentioned that you should get at least twice what you expect your funeral to cost. But there are also some other factors to consider.

If you don’t have a separate life insurance policy, you may want to consider getting a larger cremation policy. This can help cover any additional debts or expenses your family may encounter.

However, if all you can afford is a small policy, every dollar can help pay for the cost of your cremation and other final arrangements.

What to Look for in a Policy

When you’re shopping for a cremation insurance policy, there are a few things you’ll want to look for.

First of all, check on their waiting period policy, especially if you have health troubles. You don’t want to get a policy only to discover it won’t go into full effect right away. 

You should also check on how long it takes for a company to disburse funds after you pass. Many funeral homes won’t wait for an insurance policy to get processed before they request payment.

You want to make sure your insurance company will get the funds to your family in time so they aren’t stuck holding the bill.

Other Final Wishes Arrangements

The other thing you’ll need to factor into your cremation policy calculations is additional arrangements for other final wishes.

You or your family may have a special memorial you want to hold after your passing. However, these services can be expensive, and you want to make sure your policy will cover those wishes, too.

And on a more practical level, it’s a good idea to make sure you have all your end-of-life documents gathered before your passing.

These can include a basic will, a summary of all your assets and benefits, a document designating a financial power of attorney, funeral wishes, and a list of people to contact to notify of your death.

When to Make Your Final Arrangements

For many of us, it may feel premature to start making final arrangements for our own deaths. After all, we have years, even decades, left ahead of us, right?

But the truth is nothing is guaranteed, and none of us know when we might wake up one final time.

It’s almost never too early to start making arrangements for your passing. In general, it’s a good idea to start looking at end-of-life planning when you’re in your fifties or sixties. But if you’ve had health concerns or a family history of chronic or terminal diseases, you may be wise to start earlier.

How to Make End of Life Arrangements

So, where do you start with all this cremation insurance, funeral planning, life insurance, end-of-life documents, and the rest?

A great first step is to talk to a financial advisor. They can help you get a good overall picture of your assets, debts, and benefits and advise you on moving forward.

After you meet with a financial advisor, talk to a funeral director in your area. They can help you plan out your final arrangements and let you know how much those arrangements will cost.

That way, when you get ready to go to your cremation insurance agent, you’ll be prepared to get a policy that works for your needs.

Cover Your Cremation Cost

Cremation is a more affordable option for end of life arrangements, but it can still be very expensive. Cremation insurance can help to offset your cremation cost and make sure your final wishes are followed.

It can also leave more of your life insurance policy free to help your family through the months and years following your passing. 

If you’d like to find the right insurance policy for you, check out the rest of our site at No Medical Exam Quotes. We specialize in helping families find affordable life insurance coverage.

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Jeffrey Manola - Life Insurance Expert

Jeffrey Manola - Life Insurance Expert

Jeffrey Manola is the founder of No Medical Exam Quotes, an online insurance broker with a strong focus on helping people shop for the perfect life insurance policy. Jeffrey is both a licensed life insurance expert and content creator for the website. Before becoming a licensed life insurance agent, he served in the United States Marine Corps. He transitioned from serving his country to helping families find affordable life insurance coverage since 2009. No Medical Exam Quotes is licensed to offer life insurance coverage in all 50 U.S. States.

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