All posts by Dorian

What Is Burial Insurance?

Benjamin Franklin once said that “in this world nothing can be said to be certain, except death and taxes.” That’s only half true. The fact is that death is guaranteed to generate expenses that have to become the responsibility of the decedent’s survivors. Burial insurance is one way to cover those costs.

Burial insurance is a form of life insurance that a person takes out to cover his/her eventual funeral and burial costs. Why would a person purchase this kind of insurance? Because the average cost of a funeral in the United States is fast approaching $10,000 – that is without all of the fancy bells and whistles. Add in a custom-made casket and a few other extras, and the bill could climb to $30,000 or more.

The point to remember is that someone has to pay expenses related to your passing. Moreover, considering how costly funerals and burials can be, leaving those expenses to your survivors is just not right. They have enough to deal with. They do not need the pressures of having to figure out how to pay your final expenses.

Choosing a Policy

Burial insurance is no different from any other form of insurance in terms of choosing a policy. You will get the best policy at the best price by shopping around with various providers. The shopping experience involves looking at a number of factors including benefits provided and any exclusions or deductibles. A typical policy would cover some, or all, of the following:

  • casket and case for burial or urn for cremation
  • burial plot or vault – complete with headstone or vault marker
  • funeral or cremation costs – including flowers, memorial services, and professional services.

As you shop, it is important to know how each policy pays out upon your death. In some cases, the payout will be a direct cash benefit that your survivors will use to pay your expenses. In other cases, your insurance provider will work directly with the funeral home to cover your costs. In the latter case, making arrangements with the funeral home ahead of time makes it easier for you to determine approximately what your costs will be so that you can purchase enough insurance.

Some insurance providers also allow you to pay for some expenses in full at the time of policy purchase. Doing this prevents cost increases that would otherwise be incurred at the time of your death. However, be careful of these kinds of plans. You could end up paying more in the long run.

Paying for Your Policy

Consumers who purchase burial insurance are given several options for payment. The first and least expensive method is to pay for the entire policy upfront. As with auto insurance, paying the entire policy in a single payment will save you financing costs and other charges.

The second method is the installment method that we are all familiar with. The policyholder makes monthly payments based on the amount of coverage and the individual’s current life expectancy. Anything remaining unpaid at the time of death will have to be covered by survivors or the decedent’s estate.

Lastly, some insurance companies offer a graded payment model that links your annual payments to the amount of coverage you have. The more you pay in a given calendar year, the greater the payout in the event of your death. A graded payment plan makes burial insurance more affordable in some cases, but it also reduces coverage proportionally.

Once you choose a burial insurance policy, there is one last thing to check before you sign on the dotted line. You need to find out if the insurance company makes any provision for a refund or cancellation. This is especially important in cases where insurance providers work directly with funeral home operators to settle expenses. There could be a problem if the funeral home goes out of business or faces some other difficulties in the years prior to your death. You will want to get your money back in the event of any such circumstances.

Now that you know a bit more about burial insurance, you may want to consider it as a means of covering your own final expenses. Do not leave your family to absorb that cost on your behalf.


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No Medical Exam Life Insurance Plans

Have you tried to get life insurance but were turned down because of your health? Are you an older person who is skeptical about the possibility of purchasing life insurance due to your age and a few underlying physical conditions? In both cases, no medical exam life insurance plans may be the answer. This kind of life insurance is specifically intended for those who cannot get traditional life insurance coverage.

You may already be familiar with the concept of no medical exam life insurance if you’ve seen the TV commercials offering guaranteed coverage to seniors. What these policies offer, in a nutshell, is adequate life insurance protection that does not require a formal health exam to qualify. An applicant will not have to schedule an appointment with the doctor, undergo any sort of health screenings, or pass any kind of pre-qualifying exam. The desire to have life insurance and the ability to make premium payments are the only requirements.

How Policies Are Underwritten

Anyone who knows anything about life insurance is aware of the fact that insurance is all based on risk. In other words, the insurance company is taking a risk that they will make enough money on insurance premiums to cover the cost of benefits plus profit. The policyholder is counting on getting more out of the policy that he/she pays into it. All things considered, the risk is higher for the insurance company when policyholders have significant health issues. So how do they get away with providing life insurance requiring no medical exam? Through underwriting.

A company willing to underwrite this kind of life insurance is willing to assume a higher level of risk in exchange for higher premiums and lower policy values. Where a healthy 40-year-old willing to undergo a medical exam might pay $50 per month for a $200,000 policy, an individual purchasing no health exam insurance might pay $75 per month for $100,000 in coverage. As you can see, the greater risk carries with it higher premiums and lower benefits.

Despite the underwriting circumstances, purchasing a no health exam life insurance policy is still better than having no insurance at all. At the very least, an individual should have enough insurance in place to meet their final expenses and provide a little bit extra to make up for lost income.

One last thing to consider about underwriting is the difference between guaranteed issue and simplified issue. The differences boil down to health information. A guaranteed issue policy requires the applicant answer only a few simple health questions relating to smoking, alcohol and drug use, and certain conditions such as diabetes and hypertension. Simplified issue involves a longer list of questions and the possibility that the insurer will get copies of your medical records. With either policy, there is no health exam required. It is simply a matter of answering certain questions.

Term and Whole Life

Life insurance policies requiring no health exam are structured very similar to standard life insurance policies. Consumers can choose between a term product and a whole life insurance policy. Term insurance provides a designated benefit for a certain amount of time, known as the term, during which the policyholder will make monthly premium payments. Once the term expires, so does the benefit.

Whole life provides a defined benefit regardless of when the policyholder dies. It is insurance that remains in force for the individual’s entire life, even after premium payments have been completed. Whole life is often viewed as an investment because insurers invest a certain portion of the premium payments to generate a financial return.

No medical exam life insurance plans offer individuals who do not qualify for traditional life insurance the opportunity to purchase coverage. You might look into it if you’ve been turned down for life insurance in the past. Yes, it does cost a little more and pay out less. Nevertheless, it is better than having no life insurance at all.

Frequently Asked Questions about Burial Insurance

Burial insurance is becoming increasingly popular among people who want to guarantee their funeral expenses are covered when they die. Though it is not a new form of insurance, it is one that few people know a lot about. To help you learn more about it, we have put together the FAQs that people often ask about burial insurance:

1. What is burial insurance?

Burial insurance is a kind of life insurance that is purchased solely for the purpose of meeting funeral and burial expenses upon one’s death. As such, the benefits are rather small when compared to a life insurance policy, which could pay out hundreds of thousands of dollars. Burial insurance is a good option for people who have no life insurance but still want to make sure their final expenses are covered.

2. How much does it cost?

It is impossible for us to say, with any certainty, how much burial insurance costs the average consumer. There are too many factors in play. What we can say is that monthly premium payments are in line with standard life insurance premiums. In many cases, they may be substantially lower. How much you would pay depends on the amount of coverage you want, your age, and certain health conditions that could shorten your life expectancy.

3. How much coverage should I purchase?

The average burial insurance policy will not exceed $25,000 or so. This is not a problem, given the fact that the average funeral these days costs about $8,000. Determining how much coverage you purchase depends on what kind of funeral and burial you are hoping to have. You can talk to a local funeral director to get a good idea of current costs, and then adjust for inflation.

4. Do benefits have to be used to pay burial expenses?

Most burial insurance policies pay a cash benefit directly to the beneficiaries listed on the policy. While it is generally accepted the benefits will be used to pay funeral and burial expenses, there is no one looking over the shoulders of survivors to make sure that happens. The money could be spent on other things. Having said that, there are some policies in which the insurance provider works directly with a funeral home to cover costs. In such a case, all the benefits would go directly to the funeral home.

5. Can anyone qualify for burial insurance?

There are exceptions to every rule, but almost anyone can get burial insurance without a problem. Age and health are not a basis for disqualification. Having said that, age and health can affect monthly premiums and eventual benefits. Each insurance provider looks at these factors differently.

6. Can a burial insurance policy be canceled?

The typical burial insurance policy cannot be canceled once the first premium payment is made. Having said that, a policyholder could simply stop making monthly payments and the policy would be automatically terminated. However, doing so also means there would be no benefit upon the policyholder’s death. The one exception to this rule is burial insurance with a modified benefit. In some cases, such policies do offer a limited number of options for cancellation.

7. How do I apply for burial insurance?

Applying for burial insurance is pretty straightforward. You start by comparing policies from as many providers as you deem necessary. Once you decide on one, you contact the company and ask for an application. It usually takes several days from the time the completed application is received to get a decision from the insurer. Once approved, the policy is underwritten and put in force at the receipt of the first premium payment.

Burial insurance is nice to have if you have no other way of paying your funeral and burial expenses. Purchasing a policy relieves your survivors of the responsibility of making payment arrangements. That is a good thing. After all, they will have enough to worry about when you pass on.

Burial Insurance Plans for Seniors

Seniors face many decisions that come with advancing age. Among those decisions is that of how funeral and burial expenses will be paid for. Moreover, with the cost of the average funeral in the United States now more than $8,000, deciding how to meet those expenses before you die will provide a big relief to your survivors. A burial insurance plan for seniors is a very good option.

Burial insurance is a specific kind of life insurance that is purchased as a policy from a reputable underwriter. For the record, it is not the same as a prepaid burial plan purchased through a funeral home. This is an important distinction. If a funeral home offers to sell what they call burial insurance that is, in fact, a prepaid burial plan, survivors of the deceased could be surprised by additional costs related to that plan.

Senior Couple Walking Along Coastal Path

As an insurance policy, burial insurance pays a defined benefit upon the passing of the policyholder. That benefit can be one of the following:

  • Level – A level benefit is one that does not change regardless of when the individual passes away. Death could occur five years into a policy or 20 years down the road; the policy pays out the same amount.
  • Graded – A graded benefit establishes the payout based on the amount of money the policyholder has paid into the insurance. The greater the total payments, the greater the benefit. Many of these policies come with a waiting period that allows survivors to get the full face value of the policy after premium payments reach a certain point.
  • Modified – A modified benefit is a different kind of benefit in that it offers a refund of premium payments should the policyholder pass away before a designated date. It is a benefit that reduces the risk of loss from both parties.

Benefits of Burial Insurance

Seniors who already have life insurance in place may not ever consider burial insurance as an option. Perhaps they should, as burial insurance benefits both seniors and their survivors in a number of ways.

First and foremost, burial insurance benefits the survivors of seniors who have no life insurance in place. Without any sort of insurance at all, the expenses associated with funerals and burials fall to the survivors. Seniors who have no life insurance should absolutely consider burial insurance as the bare minimum.

Those with life insurance might also consider a burial policy in order to preserve as much of their life insurance benefit as possible. For example, consider a couple with life insurance benefits intended to replace lost income in the event one of them dies. An additional burial insurance policy preserves the life insurance benefit rather than allowing it to be reduced by burial and funeral expenses.

Purchasing a Policy

The good news about burial insurance is that almost no one is turned down. Seniors can usually get insurance regardless of their current page or health. Having said that, both factors will determine the amount of coverage an individual can secure. For example, certain health conditions resulting in a shorter life expectancy may limit the total benefit available or result in higher premiums.

Purchasing a policy is as easy as comparing quotes and then filling out an application. The application procedure is usually a simple one, with just a few questions above and beyond your personal information. Once a senior is approved for a policy, a payment schedule is set up and the policy is issued.

Assuming the policyholder continues to make monthly payments as scheduled, burial insurance will remain in force. It will provide the policyholder and his/her survivors with the peace of mind that comes with knowing final expenses will be paid for.


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The Importance of Budgeting Your Burial Costs

Talk to any life insurance sales representatives and they are likely to tell you that the number one reason for purchasing life insurance is to make sure all of your end-of-life expenses are covered. This is a very good reason, indeed. It is difficult enough on family members when a loved one passes away without having to burden them with the additional worries of paying for things such as the funeral and burial. Some people choose to cover those costs with burial insurance.

Burial insurance is a kind of life insurance that people purchase for the sole purpose of paying for things such as funeral services, a casket, a headstone, and a burial plot. The limited scope of burial insurance is such that policies rarely exceed $35,000 or so. The average policy is actually quite a bit less. The question is how do you know how much insurance you should buy? That question can be answered by budgeting your burial costs.

Buy Your Plot

The first step in budgeting your burial costs is to look into buying your plot. Obviously, buying now means you will incur the expense right away. However, you can most likely work out a deal with your local cemetery to put a down payment on your plot and then make installment payments thereafter. Any balance left on the plot when you die could be covered by your burial insurance.

If you do not want to buy your plot now, you can at least visit the local cemetery and find out what the going prices are. Also inquire as to how much the cost of a plot tends to rise year-to-year. The business office can likely provide you with a history and a cost estimate for five, 10 or even 20 years down the road. This will help you come up with a budget number for your eventual plot purchase.

Price the Remainder of Your Expenses

Once you have the question of your burial plots settled, it is time to start thinking about the remainder of your end-of-life expenses. This is a good time to sit down with a funeral director and ask questions. You might even talk with several local funeral directors for the purposes of comparing prices. It may sound morbid, but comparing funeral and burial expenses is a good way to save money.


You are going to want to price all sorts of things including wakes, graveside or funeral home services, caskets, flowers, etc. Again, all of these costs do tend to go up from one year to the next, so what you are really looking for is current prices and estimates for five, 10, and 20 years down the road. Pricing all of the products and services you might be interested in will quickly give you an idea of how costly funerals and burials can be.

Purchasing Insurance

The last step in budgeting your burial costs is to determine approximately how much you want to spend to cover end-of-life expenses. This will tell you how much burial insurance to purchase. For example, if you are looking for a top-of-the-line funeral and burial that could run $20,000 or more, look at a policy that will pay out $30,000. This will give you some extra room for inevitable cost increases.

Keep in mind that burial insurance is a financial tool rather than an investment. This is important to remember because the policy will not pay any more 20 years down the road than it would pay today. You could very well end up with costs greater than the value of your policy if you do not plan well. Moreover, even if you do plan well, there is no guarantee funerals will not be significantly more expensive when you eventually pass.

Budgeting for your burial costs is intended to provide the estimates you need for adequate financial planning. Nevertheless, a budget is never guaranteed. If you plan to purchase burial insurance, sit down and budget your burial costs first. Doing so will give you an idea of how much insurance to purchase.

Burial Insurance Is a Tool, Not an Investment

The increasing popularity of burial insurance has resulted in a subsequent rise in media interest and exposure. Some of that exposure has been good; some of it has been bad. And unfortunately, a lack of understanding where insurance is concerned has led to quite a bit of confusion over whether or not final expense insurance is an investment. Let us establish right up front that it is not. Burial insurance is a financial tool – nothing more, nothing less.

Critics of burial insurance tend to speak out against it because it is a kind of insurance that does not earn any additional monies as a result of paying into it. However, truth be told, term life insurance is a very similar product. It is also not an investment because it does not earn a return on the consumer’s money. The only type of life insurance that does generate a return is whole life.

This does not make burial insurance a bad product not worth purchasing. Quite to the contrary, it is a very good product for some people who want to protect their assets from the costs associated with a funeral and burial. It is no different from those who purchase umbrella insurance or extra car insurance to protect their assets in case they are ever sued after an auto accident. All of these insurances have one thing in common: they are tools rather than investments.

The Big Difference

So, what insurance can be used as an investment? It is called whole life. A whole life policy provides a death benefit upon the passing of the policyholder that is dependent not only on the premiums paid into the policy, but how much of a return those premiums generate over the life of the policy.


Let us say you purchase a $500,000 whole life policy at age 40, with the expectation that you will be making payments until age 65. That policy will pay you a guaranteed amount no matter when you die. Nevertheless, you have the opportunity to increase your payment through investing. The insurance company takes the premiums you pay and invests them in certain financial instruments. Any profit generated is split between them and you. If those investments perform well, the payout on your policy could be substantially larger. If they perform poorly, your payout will be less.

The benefits of a whole life policy should be obvious – especially in times of strong economic performance. Nonetheless, whole life policies are also more expensive and come with tax implications as well. Plenty of people are offered whole life policies but choose not to buy them because they can be quite expensive. That is the price of investing.

Covering Expenses

Burial insurance will never promise you a return on your money because it is not an investment. It is nothing more than a financial tool enabling you to pay your own funeral and burial expenses upon your passing. As such, policies in excess of about $35,000 are hard to come by. You can purchase much smaller policies, as well. It is just enough to cover funeral and burial expenses so that your loved ones are not left paying the bill.

If you already have a whole life policy or term life insurance, burial insurance may not be something that interests you. If you have no life insurance in force at all, you really should consider burial insurance to at least cover the costs of laying you to rest. Nevertheless, you should also consider it if you do not want funeral and burial expenses coming out of the death benefits afforded by your term or whole life.

The Differences between Burial Insurance and Prepaid Funerals

As uncomfortable as it might be, putting plans in place to cover your funeral and burial expenses is wise. It really is unfair to loved ones to leave them with the financial burden when they have so many other things to worry about. Some people choose to cover their financial needs through life insurance; others purchase burial insurance or opt for a prepaid funeral plan.

Life insurance is a completely self-contained world we will not talk about in this post. Instead, we want to tell you about the differences between final expense insurance and prepaid funeral plans. The differences are significant, to say the least. Anyone considering either option needs to compare both. There are many things in play that could influence a decision either way.

Burial Insurance

Burial insurance is a type of life insurance that helps cover the costs of your funeral and burial. According to PBS’ Point of View, the average funeral in the U.S. these days runs between $8,000 and $10,000. The number should make it evident that burial insurance can be very helpful in the absence of term or whole life insurance.

The benefits of purchasing burial insurance are as follows:

•Age Restrictions – There are very few of age restrictions for purchasing burial insurance. This means that seniors usually do not have a problem qualifying. If they have neglected to purchase term or whole life, a burial insurance policy is a great fall back.

final expense insurance

•Health Exams – Health exams are generally not required to qualify for burial insurance. However, the consumer does have to answer some basic health questions and legally attest to the fact that he/she is not gravely ill and expecting to die within a few months.

•Affordable – Most burial insurance policies are relatively affordable. As such, they offer the consumer a way to cover end-of-life expenses without breaking the budget.

The biggest downside of burial insurance is that it really has no investment value. Furthermore, a burial insurance policy will not pay out more in the future because funeral expenses go up. What the consumer agrees to at the time of purchase will be the entire face value of the policy for its duration.

Prepaid Funerals

When the consumer chooses a prepaid funeral plan, he/she is essentially hiring a funeral home and director to provide services in the future. Payments can be made in whole or through an installment arrangement. What the funeral director does with that money is important, so you absolutely must know before signing a contract.

Some funeral directors put your money into a trust fund, which is released upon your death. Others purchase life insurance policies while naming themselves as the beneficiaries. This all sounds well and good, but there are things that must be considered:

•Additional Charges – Should you live long enough, the actual cost of your funeral could be substantially more when you pass on. Your contract should stipulate whether or not there would be additional charges assessed in the event of higher costs at the time of your death.

•Refunds – What happens if you change your mind? What happens if the funeral home goes out of business or suffers financial losses? It is important for consumers to know whether they can get a refund should the need ever arise.

•Services Rendered – Lastly, consumers need to make sure their contracts spell out exactly what services will be provided at the time of death. The contract is the only instrument you have to make sure the services you are paying for are actually being provided.

There is no right or wrong when it comes to choosing between burial insurance and a prepaid funeral plan. Both options have their strong and weak points. Your best bet is to talk things over with your family, your financial advisor, and your insurance agent. Together you can come up with a strategy that will both cover your end-of-life expenses and protect your current financial position.

Five Things to Think about for End-Of-Life Planning

When was the last time you thought about your eventual death? Have you ever given thought to your future funeral or burial? These are uncomfortable things we tend to put on the mental back burner for as long as necessary. However, just as with every other area of our lives, ignoring the future can cause problems. It is better to pre-plan as many end-of-life decisions as possible.

Pre-planning it alleviates much of the stress and pressure that can easily lead to poor decisions among surviving family members. Moreover, while it is not possible to plan for everything, planning for as much as possible is a big help. Here are five things to consider in relation to end-of-life planning:

1. How Expenses Will Be Paid

Costs for funerals and burials continued to go up every year. According to PBS, the average funeral in the United States now runs between $8,000 and $10,000. If you do not have a plan in place to pay those expenses, your survivors will be left to cover the costs. Fortunately, there are a number of different options. Most people will choose to purchase term or whole life insurance or invest in a pre-paid funeral plan. Others will choose burial insurance. Burial insurance is an affordable way to cover end-of-life expenses for those who cannot afford, or qualify for, standard life insurance.

end of life

2. Burial or Cremation

Individuals need to decide whether they want to be buried or cremated. Cremation tends to be less expensive than interment because there are no caskets or burial plots to worry about. Those who do choose cremation have to decide what to do with their ashes. Will they be vaulted, stored at home, scattered, etc.?

3. Burial Plots

If burial is chosen, the question of burial plots must also be answered. Far too many make unwise decisions about burial plots when those decisions are put off until the death of a loved one. It is a lot wiser to consider the location and cost of burial plots well in advance of meeting them. If entire families want to be buried together, it is also wise idea to purchase all of the necessary plots at the same time. Otherwise, they may not be able to find space as family members age and eventually die.

4. Estate Planning

Estate planning is a very important part of end-of-life planning. How much you want to leave to your loved ones will determine, in part, how you pay for your funeral and burial. For example, if you have a relatively small estate and you want as much as possible to be left to your heirs, burial insurance may be a good option. On the other hand, a rather sizable estate that will be subject to significant death taxes would benefit from every deduction, including paying for funeral and burial expenses directly from the estate.

5. Putting Plans in Writing

All of your faithful planning may come to nothing if you do not put your wishes in writing. In other words, your surviving family members need to be made aware of the plans you have made as well as your preferences for decisions that cannot be made until after you pass. Write down all of your wishes, have the document notarized, and give copies to both your attorney and your family members.

For the record, the Federal Trade Commission recommends creating a document that is separate from your will. A will is typically not opened until after someone’s passing and, when it is, it must go through the probate process. A separate document allows your funeral and burial wishes to be carried out immediately. Having to wait for the probate process would make it impossible to guarantee those wishes were honored.

It is a good idea to plan for your eventual passing. Everything from burial insurance to writing down your wishes will go a long way toward making your passing as easy on your survivors as possible.

Three Groups of People Who Benefit from Burial Insurance

If you are like most people, you dread the thought of having an insurance sales representative show up at your door or call you on the phone. The thought of having to refuse to buy a policy, despite the sales representative’s hard-sell tactics, can be enough to get you agitated just thinking about it. The reality is, not every insurance policy is something you should purchase. Some types of insurance are right for you; others are not.

Burial insurance is a good example of this point. It is a great financial tool for certain groups of people who want a little extra financial protection relating to covering their final expenses. It is not a good tool for others. Knowing whether it is right for you comes down to knowing your financial position and your expectations for the future.

Here are three groups of people who tend to benefit from burial insurance:

1. Seniors without Life Insurance

Believe it or not, purchasing life insurance is no longer the foregone conclusion it used to be. There are plenty of seniors today who, for whatever reason, never chose to purchase whole or term life. Yet now they are over the age of 60 and beginning to consider their own mortality. Because of their age, whole or term life may no longer be either practical or affordable. Burial insurance is a good option for them.

Burial insurance provides a way to pay for their funeral and burial expenses so that family members are not burdened with those costs. At the same time, it is very affordable for almost every consumer. There is actually no good reason for seniors in this group to not have burial insurance if they can afford it.


2. Working Couples

Today’s working couples may find there are other things they want to put their money into rather than life insurance. For example, saving up 15% to 20% for a down payment on a home can be quite a financial endeavor. These young couples do not necessarily need to replace lost income in the event one of them dies, so a term or whole life policy may be overkill for their circumstances.

Once again, burial insurance provides a way to cover those end-of-life costs at a very affordable price. The couple can choose a very good policy that does not cost a lot, thereby enabling them to put as much money away for a down payment as possible. They may consider term or whole life after they purchase their home and begin raising a family.

3. Those without Investments

In a perfect world, everyone would be involved in several different kinds of investments in order to secure their retirement and pay their end-of-life expenses. Nevertheless, this is not a perfect world. There are many American households that simply cannot afford to invest. Yet it does not change the fact that the passing of a family member will cost a significant amount of money.

Purchasing burial insurance will certainly not provide a retirement nest egg or make one independently wealthy. However, it will relieve surviving family members of the expenses related to burying a lost love one. Better yet, it is an affordable way to cover those expenses.

It is true that burial insurance is not an investment. It is also true that it is not a type of insurance that is right for everyone. Nonetheless, for those who can benefit from it, burial insurance can make a big difference at the time of one’s passing. If you have any questions about burial insurance, contact your insurance agent or an estate planner for help. Qualified and experienced professionals can answer your questions and explain how burial insurance could be an important component in your end-of-life financial plans.