When should seniors NOT get burial insurance

When should seniors NOT get burial insurance? Burial insurance is a very important type of policy and a necessary one, in many cases. However, there are times when seniors should not get very much or any burial insurance.

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Sometimes seniors will have more economical solutions, if the budget simply does not have room for another $20, $50, or $100 per month. At times, our clients begin our conversation with an unrealistic expectation of getting a $40,000 policy for $50 per month, and they are 83 years young,  and a smoker. The truth, is that $40,000 will be quite expensive for this client. In this situation, they waited too long to get a larger whole life policy.  $50 per month would absolutely have been possible, when they were 50.

 

Common reasons to NOT get burial insurance

An obvious reason to not get burial insurance is an impossibly tight budget.

If you’ve looked at your budget and you’ve already cut out things like going to Starbucks, cigarettes, and going out to movie theaters, and there is nothing else you can adjust to reduce your expenses, and you break even every month, burial insurance may not be in the cards. Before you nod your head and quickly agree you are in this category- give your actual monthly and annual expenses a GOOD HARD LOOK. Most people have more unnecessary spending than they realize.

A good example of someone who can not afford additional bills:

You are paying your mortgage or rent, food, insurance, your phone, and you’ve already cut down your phone costs as much as possible… So you’re just looking at the bare essentials and you’re on a fixed income.

And we have many clients where this is the case. Fixed incomes and extremely lean budgets… they’re basically breaking even every month. If that’s the case, then I would recommend you look at what the cost is for YOU. Depending upon your age, your health, it might be surprisingly affordable. You might find that price works within your tight budget. Additionally, approach the process with an open mind. Sometimes some tweaking here and there can drop the price.

Note: The worst thing you could do is read this article and talk yourself out of a policy. Start by getting a quote and give it a strong consideration. Obviously if you pinch pennies so you can get a burial insurance policy– this policy is for your loved ones. It’s not for you. So sometimes, we just need to suck it up. It’s a painful truth, that sometimes we need to feel some pain, for the greater good.

HOWEVER- please do not put yourself into a bad financial situation, if getting a burial insurance policy will cause that scenario.

Too Much Life Insurance

Yes, your loved ones would love to receive $40,000, rather than $20,000, but how much money do they really need? Often times we discourage our clients from adding any more life insurance, if they have plenty to meet their goals. If the goal is to simply pay off your final expenses, such as burial, cremation, etc, you only need enough to accomplish this. If your goal is a $10,000 financial gift, then stick to this. If your goals have changed, then let’s reassess. Also, your best to consider needs over wants. Make sure that the life insurance you have is WHOLE LIFE INSURANCE, as whole life is the only kind of life insurance you want, to accomplish these goals. If the life insurance is any other category, you are betting against living.

Term policies, for example, are designed by the life insurance companies. They are betting against you. There’s a high percentage chance, that you’re going to be outliving your term policy or an accidental only policy.

Is Burial Insurance Affordable?

Finally, there is one last thing worth mentioning. We hear this a lot when we talk with clients about life insurance. Most everyone agrees, life insurance is incredibly important and confirm it would absolutely be beneficial if they had a burial insurance policy in place…. However, things are financially tight.

When we dig deeper, 9/10 times if clients are willing to sacrifice some Starbucks Frappuccinos, or eat out a few less times, they can easily afford a policy that safeguards their family.

We also commonly hear clients say, “I would rather just set aside $200 in the bank account every month and I’ll do that instead and that’ll be better.” “Or I’ll invest it.”

The problem is- over 95% of people that say they will invest or set the money aside, don’t actually do it. The reason: Human nature is to spend what what we have, beyond what we need. So if you don’t budget a life insurance policy, there is a 95% chance the money will be spent on things you won’t even remember. We have good intentions- but we all make bad choices. It’s a simple fact.

If we can help YOU, please know you can reach out to us and we will do whatever we can for you.

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Chad McMahan

Chad McMahan

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