What is funeral insurance? Funeral and burial insurance is an insurance product purchased by many Canadians to cover their final expenses. It’s also called: funeral expense insurance, and burial expense insurance.
Funeral and burial insurance 101
There are a variety of final expense insurance policies that offer different combinations of insurance coverage. To make sure you get exactly what you need before you are purchasing this product, you should understand the differences.
Funeral expense insurance pays the costs for your funeral, such as burial or cremation. Other end-of-life costs that you can use the funeral expense insurance policy for are legal costs, medical costs or any debts owing such as credit card debt.
Funeral/Burial insurance vs. life insurance
Why you need burial insurance and what coverage you need depends on your personal financial situation, and your family’s budget. However, there are other factors you need to consider.
- Additional coverage if you don’t have life insurance coverage.
- You or your family don’t have another way to pay for your funeral
- Your entire family needs burial insurance
- Your savings are limited so you don’t have another way to pay for outstanding debts and funeral expenses.
- You want an insurance policy in addition to your life insurance to cover all your final expenses and funeral, so your family doesn’t have to worry about it.
One of the main reasons funeral burial insurance is so popular in Canada is because of how easy this product is to apply for and be approved. Eligibility requirements for burial expense insurance policies aren’t as strict as life insurance, making it available to a wider demographic of the Canadian population. Unlike traditional life insurance and financial planning insurance policies where you must take a medical exam, to apply for a funeral burial insurance policy you only have to complete a health questionnaire.
Some life insurance policies build cash value, but most final burial insurance policies do not.
The main difference between life insurance and final expense insurance is how the funds will be used. Life insurance payouts provide funds for surviving family members living expenses. Funeral insurance includes funds to bury or cremate the life insured and take care of other final expenses like taxes and debt.
Funeral insurance for seniors
There are several reasons why seniors need funeral insurance protection. Some seniors still have liabilities and debts they need to cover, but in most cases, seniors want to ensure that their children or other family members aren’t burdened with paying their final expenses.
Additionally, there are other factors to think about to determine if you need seniors funeral insurance. Death is inevitable and unfortunately comes with many expenses. Burial insurance for seniors is a life insurance product to help cover the following costs:
- Final Expenses. The cost of a funeral and burial in Canada can cost upwards of $15,000. Burial insurance for seniors is a way for your family to honour and mourn you without dealing with the burden of your end of life expenses.
- Outstanding Expenses. The payout of an affordable burial insurance policy for seniors can be used to cover mortgage payments, credit card balances, outstanding medical, additional debt and loss of income.
- Leaving a Legacy. Burial insurance for seniors over 80 is a way to leave a lasting impression on the world. Do you have a favourite charity or organization that would benefit from additional income? Your tax-free financial gift will be an important part of your children and grandchildren’s life because it will keep your memory alive through your generous gift.
- Peace of Mind. An affordable burial insurance for seniors policy to cover final expenses will give your loved ones peace of mind knowing that financial assistance is available when it’s needed.
It’s common in Canada for children to purchase burial insurance for parents because they want to make sure all final expenses are covered when the time comes to say goodbye.
More children realize how important it is to be proactive and purchase affordable burial insurance for their parents. Even though we don’t want to face it, the reality is that our parents will pass away during our lifetime. There are many children whose parents do not have life insurance to cover their funeral costs, or don’t have investments or adequate funds.
There are ways to lower the cost of your parent’s funeral, such as having a gravesite-only funeral service. But, an important truth is that burial insurance for seniors should be enough to cover the maximum of what a funeral cost from death to burial. Its important to note that there are additional considerations you may not be aware of, including:
- Grave Marker
- Casket or Urn
- Body Preparation & Embalming
- Hearse, Obituary Listing, Death Certificate & More
When to get funeral insurance
Pre-need funeral insurance is designed to cover the predetermined expenses of a funeral, cremation or burial. Prepaid funeral insurance can be made payable immediately to the beneficiary, which is usually the funeral home, upon the death of the policyholder.
Preplanning a funeral consists of meeting with a funeral preplanning professional to tell them the type of funeral or cremation service you want. This includes the type of casket you want for your burial, cremation urn or vault. Once you complete your funeral prearrangements you can pay for your funeral expenses, the majority of which you can pay at today’s cost, not the cost when you pass away.
When you purchase pre-burial insurance before you become sick or even considering your death, it’s one less thing you need to worry about. This peace of mind also extends to your family.
How much will funeral insurance cost?
The cost of a funeral in Canada varies, but an in-ground burial is the most expensive. The price ranges between $3,500, which includes basic transportation, a basic casket and additional cemetery charges; and $15,000+, which includes a high-end burial with transportation, an expensive casket, administration fees, flowers, visitation services, cemetery charges, reception, etc. To help you know which funeral insurance policy you need, we’ve collected online data.
Below is a general overview of the different levels of funeral costs that affect funeral insurance plans in Canada, starting with cremation:
A basic cremation in Canada ranges between $600 and $3,000 depending on the province. Some areas of Quebec cost around $600, while in Toronto the cremation cost is around $1,400. If this is what you need, you could get a low-cost funeral insurance policy.
A more sophisticated cremation ceremony that includes flowers, a viewing, a chapel reservation, and a special vault or urn can cost up to $4,500.
Basic funeral costs for a traditional interment range between $3,000 and $4000. This funeral package includes basic transportation, a basic casket and cemetery charges. A low-cost funeral insurance policy would suffice.
A conservative traditional funeral cost around $5,500, and this includes basic transportation, a simple casket, cemetery charges and a reception.
If you want mid-range funeral insurance that includes all transportation costs, an average burial casket, single day visitation services, flowers for your funeral, commentary and a basic reception, it will cost you around $9,000.
A high end prepaid funeral plan costs, on average, around $15,000 and it includes all transportation, police assistance/admin fees, a high-end casket, two days visitation, flowers, cemetery charges and a reception.
It’s interesting to note that 65 per cent of Canadians choose cremation, making it the most popular funeral insurance plan in Canada today.
If you live in Ontario you’ll be interested in knowing that according to the law, all funeral establishments in Ontario must offer a low-cost service solution called a “direct disposition.” This includes a minimal set of services such as body transfer from the place of death, placing the body into a casket, delivery of the body to a crematorium or cemetery and filing of the paperwork.
Unfortunately, this isn’t the case across the rest of Canada, so plan accordingly when you research funeral insurance companies for funeral and burial costs in Canada.
Where to find the best funeral insurance quotes
Before you get funeral insurance quotes you need to decide the type of funeral you want and how much you need to cover your end-of-life expenses. Your actual funeral costs are the largest single cost that you’ll think of first because it’s the highest, but there are the other “final expenses” to consider –medical bills, legal costs, living expenses, and credit card bills, etc. before you search for funeral insurance companies.
Determine if you will leave behind enough money to cover final expenses
Before you purchase pre-need funeral insurance ask yourself these questions: is your estate sufficient to cover your final expenses? Can your survivors immediately access the funds to your bills or will your estate be tied up in probate? Most funeral providers and cemeteries expect payment at the funeral, and they don’t give lines of credit.
Decide if you need affordable burial insurance
If funds will not be available to cover your funeral and final expenses, then affordable burial insurance might make sense to you. Even if you intend to leave money behind, you probably don’t want your estate to be depleted to pay for your final expenses. An affordable burial insurance policy is a way for you to make sure your entire estate funds are available to your beneficiaries.
Decide on the type of affordable burial insurance you want
There are many specialized and affordable burial insurance policies available from many funeral insurance companies. Although the insurance products are the same, they’re marketed differently – funeral insurance, burial insurance or final expense insurance.
To find out which of the funeral insurance policy companies has the best product for you, contact a life insurance broker. They work with several funeral insurance companies and will help you find the most affordable burial insurance for your situation.