Burial and Funeral Life Insurance¹

A permanent life insurance, cash value, fixed premiums, no medical exam is not required as its to cover the burial, funeral of expense insurance.  Its generally for people with health problems and who don’t have life insurance.

Burial insurance policies can be expensive, based on the amount of coverage you get for your money.  There is a time frame between the policy date and the date the person passes away, usually 2 to 3 years.  Every life insurance company has its rules and terms.  Some will only pay out to the beneficiaries a refund of the premiums you paid in, plus some interest.

Survivorship Life Insurance

A permanent life insurance, cash value, fixed premiums, and paid out when the second person

This a life insurance policy ensure two people under one policy, such as a husband and wife. The payout to beneficiaries is made when both have passed away. You may see them called second-to-die life insurance, but for understandable reasons the industry is moving away from this name.

Survivorship life insurance can be less expensive than buying two separate life insurance policies, especially if one of the people has health issues.

 Survivorship policies can be beneficial in estate planning when the life insurance money is not needed by a beneficiary until both of the insured people have passed away. Survivorship life insurance might be used to fund a trust, for example. It’s also suited for high net worth couples who want to provide money to heirs for estate taxes. Or it could be used by a couple to provide a donation to a charity.

 If two spouses are insured and one would suffer financially if the other passed away, this is not the right policy type. The surviving spouse does not receive any life insurance benefits. The payout is only made when both have passed away.

Mortgage Life Insurance

 The length the policy is the duration of the mortgage, no cash value, the premium varies as the death benefit decreasing as you pay down the mortgage.

It is designed to cover only the balance of a mortgage and nothing else. This policy is paid directly to the lender (not beneficiary) and the payout is the balance of the mortgage, or partial balance if that’s what you insured.

Mortgage life insurance is intended for people who are primarily concerned about their family being burdened by the mortgage if they pass away. It can also be appealing to someone who doesn’t want to take a medical exam to buy life insurance.

This type of policy won’t provide financial flexibility for your family because the payout goes to your mortgage lender.

If you’re looking for life insurance to cover a mortgage or other debts, you’re better off with term life insurance. You can choose the term length and amount, and provide more than just mortgage money to your family. Your family can use a payout for any purpose. They may decide to use the money elsewhere.

Credit Life Insurance

It’s usually a permanent policy with no cash value, the premiums vary depending on the amount and the death benefit is paid the lenders.

Like mortgage life insurance, this insurance covers a specific debt. When you take out a loan you might be offered credit like insurance. The payments can usually be rolled into your loan payments. The life insurance payout is the balance of the debt and it’s paid to the lender, not your family.

If you’re concerned about how your family would pay a certain debt if you passed away, credit life insurance might look appealing and convenient. It can also be attractive because there’s no medical exam required to qualify.

Credit life insurance is very narrow and doesn’t allow financial flexibility in the future. You’re probably better off with term life insurance, which you can use to cover many concerns, from debt to income replacement to funeral expenses. A policy like term life will give your family more financial options if you pass away.

Supplemental Life Insurance

 It is connected to your employment, no cash value and there low or no premiums an

The life insurance you may have through work is supplemental, also known as group life insurance. It sets rates based on the group, not the individual.

Because usually it’s free or inexpensive, group life insurance is a good value. It’s good as supplementary coverage to your own individual life insurance policy.

If you lose the job you generally lose the life insurance, too. That’s why it’s best to have your own life insurance that’s not tied to the workplace. Plus, on your own you can buy higher amounts of insurance.

 ¹ https://www.forbes.com/advisor/life-insurance/types/#term-life-insurance