Burial Insurance
Burial Insurance policies are also known as funeral insurance and final expense insurance policies. Burial Insurance is a life insurance policy designed to pay for a funeral, burial and any other final expenses. The benefit amount for Burial Insurance policies is almost always $25,000 or less. The policy benefit is enough to pay for the policyholder's final expenses including any funeral and cemetery (or cremation) costs. Without a Burial Insurance or other life insurance policy, the children of the deceased often need to pay the cost of the funeral and burial. They may need to borrow money to pay for these final expenses. For individuals and couples with grown children, a Burial Insurance policy is a great way to make sure that the cost of their funeral doesn’t put a financial strain on their surviving family. However Burial Insurance is not intended to provide a source of income to the spouse or children of the policy holder.
Burial Insurance should not be confused with a prepaid funeral. Burial Insurance policies are sold by licensed insurance companies regulated by the insurance commissioner of each state. Prepaid funeral arrangements are typically made with funeral homes and allow an individual to pre-plan and pre-pay for their funeral. While most funeral directors are reputable and honest, funeral homes do change hands and sometimes go out of business. If an insurance company experiences financial difficulty, the state insurance commissioner looks after the interest of the policy holders to make sure that all claims are paid.
Burial Insurance should not be confused with a prepaid funeral. Burial Insurance policies are sold by licensed insurance companies regulated by the insurance commissioner of each state. Prepaid funeral arrangements are typically made with funeral homes and allow an individual to pre-plan and pre-pay for their funeral. While most funeral directors are reputable and honest, funeral homes do change hands and sometimes go out of business. If an insurance company experiences financial difficulty, the state insurance commissioner looks after the interest of the policy holders to make sure that all claims are paid.
Estimating Burial Insurance Needs
The question many people ask is "How much burial insurance do I need?". Well like many questions, the answer really depends on your personal circumstances and your preferences.
The major expenses that must be considered in estimating funeral cost are:
The average cost of the traditional funeral in 2013 was $9,600. However, funeral costs vary depending on the specific arrangements. A funeral with several hundred mourners may cost well over $15,000, since these funerals require large facilities and longer hours plus additional funeral director staff to coordinate traffic and parking. On the other hand a small burial with only family can cost less than $4,000.
Since few people are interested in spending much time estimating the costs of their funeral and burial, it is best to start with the average costs of $9,600 and estimate $20,000 for a very large funeral and $5,000 for a very small funeral. Also keep in mind that as with everything else, the costs of burial does increase over time. So it is a good idea to purchase slightly higher coverage amount if it is within your budget. Burial Insurance benefits are not subject to federal income tax so the full amount of benefit can be used for final expenses.
The major expenses that must be considered in estimating funeral cost are:
- Undertaker/Funeral Director services
- Transportation of remains to funeral home
- Coffin or Urn for Cremation
- Burial Vault (required by many cemeteries)
- Hearse for driving family to funeral and cemetery
- Limousines for family
- Facilities charges (wake/viewing, cemetery)
- Cemetery charges (opening and closing the grave)
- Headstone or Marker
- Flowers for wake and cemetery
- Lunch or similar for family and friends
The average cost of the traditional funeral in 2013 was $9,600. However, funeral costs vary depending on the specific arrangements. A funeral with several hundred mourners may cost well over $15,000, since these funerals require large facilities and longer hours plus additional funeral director staff to coordinate traffic and parking. On the other hand a small burial with only family can cost less than $4,000.
Since few people are interested in spending much time estimating the costs of their funeral and burial, it is best to start with the average costs of $9,600 and estimate $20,000 for a very large funeral and $5,000 for a very small funeral. Also keep in mind that as with everything else, the costs of burial does increase over time. So it is a good idea to purchase slightly higher coverage amount if it is within your budget. Burial Insurance benefits are not subject to federal income tax so the full amount of benefit can be used for final expenses.
Burial Insurance Compared to Other Life Insurance Options
Burial Insurance is often criticized as being an expensive option compared to a fully underwritten life insurance policy. While it is true that a fully underwritten term life policy may be half the cost of a Burial Insurance policy, there are several important distinctions that make a head to head comparison difficult. First and foremost, fully underwritten term life policies typically require extensive underwriting, including health questions, medical histories, family history, driving records, attending physician statements and often a medical exam. If a medical exam is required it will include a blood pressure test, blood sample and urine sample. Burial insurance policies require only simple underwriting or in the case of a guaranteed issue policy no underwriting at all.
Another significant difference is amount of coverage that is available. Most insurance companies offer underwritten term life policies at coverage levels of $50,000 and higher. A qualifying fifty year old may pay $3 per $1,000 of term coverage. For lower levels of coverage, term life is available with less underwriting but at significantly higher cost per $1,000 of coverage than fully underwritten coverage. Term life offers coverage for a defined period of time, usually 5, 10, 15 or 20 years. If the policy holder is still alive at the end of the term, the coverage ends and no benefit is paid. Burial insurance on the other hand is almost always whole life coverage meaning that as long as the premium is paid the coverage last for the whole life of the policyholder. However for Burial insurance a fifty year old may pay $20 or more for Burial Insurance.
Term life is usually purchased to provide a death benefit that will provide a level of income for surviving family members or benefits that can be used for other specific reasons such as paying off a mortgage or providing for children’s education. Calculating the amount of term life insurance that is needed to provide for surviving family members is fairly complicated. Many factors are involved including the age of surviving family members, the level of annual income required to maintain their lifestyle and any potential estate taxes that will be due upon the death of the insured. However, Burial Insurance is designed for the specific purpose of providing for funeral and final expenses. This is a far simpler purpose and requires little more than estimating the amount of final expenses. Burial Insurance may be used to supplement other life insurance coverage. In this case the amount of additional coverage a person is looking for and how much they can afford are the only factors to consider.
Another issue to consider is that while a fully underwritten policy will be less expensive, individuals with health issues may not qualify for this coverage. In fact although an individual can qualify for a Burial Insurance policy based on their answers to a few simple health questions, they may not qualify for an underwritten policy especially if the medical exam uncovers significant underlying health issues.
Although underwritten term life will be a cheaper option for individuals that qualify, direct comparisons to Burial Insurance are difficult for the reasons above.
Another significant difference is amount of coverage that is available. Most insurance companies offer underwritten term life policies at coverage levels of $50,000 and higher. A qualifying fifty year old may pay $3 per $1,000 of term coverage. For lower levels of coverage, term life is available with less underwriting but at significantly higher cost per $1,000 of coverage than fully underwritten coverage. Term life offers coverage for a defined period of time, usually 5, 10, 15 or 20 years. If the policy holder is still alive at the end of the term, the coverage ends and no benefit is paid. Burial insurance on the other hand is almost always whole life coverage meaning that as long as the premium is paid the coverage last for the whole life of the policyholder. However for Burial insurance a fifty year old may pay $20 or more for Burial Insurance.
Term life is usually purchased to provide a death benefit that will provide a level of income for surviving family members or benefits that can be used for other specific reasons such as paying off a mortgage or providing for children’s education. Calculating the amount of term life insurance that is needed to provide for surviving family members is fairly complicated. Many factors are involved including the age of surviving family members, the level of annual income required to maintain their lifestyle and any potential estate taxes that will be due upon the death of the insured. However, Burial Insurance is designed for the specific purpose of providing for funeral and final expenses. This is a far simpler purpose and requires little more than estimating the amount of final expenses. Burial Insurance may be used to supplement other life insurance coverage. In this case the amount of additional coverage a person is looking for and how much they can afford are the only factors to consider.
Another issue to consider is that while a fully underwritten policy will be less expensive, individuals with health issues may not qualify for this coverage. In fact although an individual can qualify for a Burial Insurance policy based on their answers to a few simple health questions, they may not qualify for an underwritten policy especially if the medical exam uncovers significant underlying health issues.
Although underwritten term life will be a cheaper option for individuals that qualify, direct comparisons to Burial Insurance are difficult for the reasons above.
Why Purchase Burial Insurance
Many people don’t understand the need for burial insurance. And burial insurance is not right for everyone. Families and single parents with young children need more life insurance coverage than a burial insurance policy can provide. Let’s face it takes a lot more than $20,000 to provide financial security to surviving family. However once the kids are out and on their own, that’s when burial insurance makes sense. Just because providing for your children is no longer a concern, it does not mean you want to have your adult children (or grand children) paying for your burial and final expenses.
Social Security's death benefit is less than $300. You worked hard for this benefit, but it is simply not enough to cover even the most basic of burials. The fact is $300 doesn't go very far, especially when it comes to taking care of final expenses. If you or your spouse is counting on Social Security's death benefit to pay for funeral expenses, then you really need to consider burial insurance.
Often people have group life insurance through their job. But when they stop working the coverage also stops. Once they retire many people, especially those that have had a few health issues, don’t want to go through the trouble of applying for fully underwritten whole or term life. They also don’t need as much life insurance as they did when they were working full time since income replacement is no longer a concern. Burial insurance is easy to apply for and is designed specifically for final expenses. Most burial insurance policies only require answers to a few health questions and guaranteed acceptance policies don't require any health information at all.
Finally there are people that have life insurance but realize that at their age it may not be enough. In these situations, burial insurance can be used to supplement any other life insurance policies that are in place. This way the burial insurance benefits can be used to pay funeral expenses leaving all the benefits from whole or term life to go to beneficiaries. With no medical exam required and only simple health questions, burial insurance is an easy way to add insurance coverage without a lot of hassle.
Social Security's death benefit is less than $300. You worked hard for this benefit, but it is simply not enough to cover even the most basic of burials. The fact is $300 doesn't go very far, especially when it comes to taking care of final expenses. If you or your spouse is counting on Social Security's death benefit to pay for funeral expenses, then you really need to consider burial insurance.
Often people have group life insurance through their job. But when they stop working the coverage also stops. Once they retire many people, especially those that have had a few health issues, don’t want to go through the trouble of applying for fully underwritten whole or term life. They also don’t need as much life insurance as they did when they were working full time since income replacement is no longer a concern. Burial insurance is easy to apply for and is designed specifically for final expenses. Most burial insurance policies only require answers to a few health questions and guaranteed acceptance policies don't require any health information at all.
Finally there are people that have life insurance but realize that at their age it may not be enough. In these situations, burial insurance can be used to supplement any other life insurance policies that are in place. This way the burial insurance benefits can be used to pay funeral expenses leaving all the benefits from whole or term life to go to beneficiaries. With no medical exam required and only simple health questions, burial insurance is an easy way to add insurance coverage without a lot of hassle.
Burial Insurance Application
Burial Insurance policy applications are fairly simple since these policies do not require full underwriting. Rather than asking detailed health questions, the applications require a few simple yes or no questions regarding major health issues. If the applicant answers that they do not have any significant health issues the policy will be issued. No medical exam or follow up questions are required.
Some Burial Insurance policies are guaranteed issue. Guaranteed Burial Insurance applications do not ask any health questions and do not require a medical exam. These policies are issued regardless of an applicant's health other risk factors. The policy is issued as long as the application is completed and the premium is paid. Since no health questions are asked, no medical exam is required, and everyone that applies is accepted, these policies have a graded benefit period. This means that during the first two years of coverage, the full benefit is only paid for accidental death. If an insured person dies of disease or illness, in the first two years of coverage, the benefit is limited to the premium paid plus interest. After the first two years, the full benefit amount is paid for death from any cause including illness, accident, or natural causes.
Guaranteed Burial Insurance policies are a good option for people with health issues, since they may be declined for standard life insurance. As with standard Burial Insurance, guaranteed policies are whole life and can only be cancelled by the insurance company if the premium is not paid. Guaranteed issue policies also offer the convenience of a “no questions asked” application.
The cost of Burial Insurance increases with the age of the applicant. A 55 year old will pay less for the same amount of Burial Insurance as a 65 year old. However once a policy is issued the premium will not increase for the rest of the insured’s life. This is because Burial Insurance is a whole life policy. As the name implies, whole life policies are issued for the whole life of the insured. Whole life premiums are locked in and do not increase with age or for any other reason. In addition, whole life policies can only be cancelled by the insurance company if the premium is not paid. So policy holders never need to reapply for coverage. This is an important feature since policy holders may not qualify for insurance as they grow older due to health issues. As a rule Burial Insurance is not available to anyone age 90 and up.
Some Burial Insurance policies are guaranteed issue. Guaranteed Burial Insurance applications do not ask any health questions and do not require a medical exam. These policies are issued regardless of an applicant's health other risk factors. The policy is issued as long as the application is completed and the premium is paid. Since no health questions are asked, no medical exam is required, and everyone that applies is accepted, these policies have a graded benefit period. This means that during the first two years of coverage, the full benefit is only paid for accidental death. If an insured person dies of disease or illness, in the first two years of coverage, the benefit is limited to the premium paid plus interest. After the first two years, the full benefit amount is paid for death from any cause including illness, accident, or natural causes.
Guaranteed Burial Insurance policies are a good option for people with health issues, since they may be declined for standard life insurance. As with standard Burial Insurance, guaranteed policies are whole life and can only be cancelled by the insurance company if the premium is not paid. Guaranteed issue policies also offer the convenience of a “no questions asked” application.
The cost of Burial Insurance increases with the age of the applicant. A 55 year old will pay less for the same amount of Burial Insurance as a 65 year old. However once a policy is issued the premium will not increase for the rest of the insured’s life. This is because Burial Insurance is a whole life policy. As the name implies, whole life policies are issued for the whole life of the insured. Whole life premiums are locked in and do not increase with age or for any other reason. In addition, whole life policies can only be cancelled by the insurance company if the premium is not paid. So policy holders never need to reapply for coverage. This is an important feature since policy holders may not qualify for insurance as they grow older due to health issues. As a rule Burial Insurance is not available to anyone age 90 and up.
Burial Insurance Features
All Burial Insurance policies include a 30 day grace period for the payment of premiums. This means the policy cannot be cancelled by the insurance company during the grace period. If the premium is not received by the due date, the insurance company is required to send the policy holder a notice that the premium is late and needs to be paid by the end of the grace period or it will be cancelled. This prevents a policy from being cancelled because the policy holder accidentally missed a premium due date. If a policy holder dies during the grace period the insurance company will deduct the premium that is due from the benefits that are paid to the beneficiaries.
Burial Insurance also includes a free look period. This is a period of time after the purchase of insurance during which the policy holder is guaranteed a full refund if they change their mind and cancel the policy. The required free look period varies by state, but most insurance companies provide a 30 day free look period. If the policy is cancelled after the free look period, the policy holder receives a refund for any unearned premium. For instance if an annual premium was paid and the policyholder cancels after 6 months, they will receive a refund for half of the annual premium.
Insurance companies usually offer premium discounts for providing an automatic method of premium payment. By taking advantage of the automatic premium payment option you provide the insurance company with your bank account or credit card information so that you don’t need to write a check to pay the premium. This option saves the insurance company the expense of dealing with checks and they pass the savings along to the policy holder. All insurance companies allow automatic payment from a checking or savings account and some allow for automatic payment with a credit card. Automatic premium payment offers several advantages for the policy holder including convenience, discount premium, and reduced chance of policy cancellation due to a missed premium payment.
Whole life policies including Burial insurance have cash surrender value. Cash surrender value or cash value is the amount an insurance company pays a policy holder to surrender their life insurance policy. Insurance companies calculate cash value based on the number of years the policy has been in place and the premium paid by the policy holder. Insurance companies pay the cash value because once a policy is surrendered they will no longer pay a death benefit and this is a savings for the insurance company. If a policy holder needs cash the cash surrender value is an important feature. Keep in mind however that the cash value will always be lower than the policy’s death benefit. Policy holders may also be permitted to borrow up to the amount of a policies cash value. If policy holder dies and there is an outstanding policy loan, the amount of the loan plus interest is deducted from the amount paid to the beneficiaries.
Burial Insurance also includes a free look period. This is a period of time after the purchase of insurance during which the policy holder is guaranteed a full refund if they change their mind and cancel the policy. The required free look period varies by state, but most insurance companies provide a 30 day free look period. If the policy is cancelled after the free look period, the policy holder receives a refund for any unearned premium. For instance if an annual premium was paid and the policyholder cancels after 6 months, they will receive a refund for half of the annual premium.
Insurance companies usually offer premium discounts for providing an automatic method of premium payment. By taking advantage of the automatic premium payment option you provide the insurance company with your bank account or credit card information so that you don’t need to write a check to pay the premium. This option saves the insurance company the expense of dealing with checks and they pass the savings along to the policy holder. All insurance companies allow automatic payment from a checking or savings account and some allow for automatic payment with a credit card. Automatic premium payment offers several advantages for the policy holder including convenience, discount premium, and reduced chance of policy cancellation due to a missed premium payment.
Whole life policies including Burial insurance have cash surrender value. Cash surrender value or cash value is the amount an insurance company pays a policy holder to surrender their life insurance policy. Insurance companies calculate cash value based on the number of years the policy has been in place and the premium paid by the policy holder. Insurance companies pay the cash value because once a policy is surrendered they will no longer pay a death benefit and this is a savings for the insurance company. If a policy holder needs cash the cash surrender value is an important feature. Keep in mind however that the cash value will always be lower than the policy’s death benefit. Policy holders may also be permitted to borrow up to the amount of a policies cash value. If policy holder dies and there is an outstanding policy loan, the amount of the loan plus interest is deducted from the amount paid to the beneficiaries.
Burial Insurance Companies
Burial Insurance is sold by numerous insurance companies including American National, Monumental Life, Colonial Penn, Met Life, Globe Life, and Mutual of Omaha. In addition to the many large life insurance companies that offer Burial Insurance policies, there are also smaller companies that specialize in Burial Insurance such as Lincoln Heritage and Baltimore Life. The size of the insurance company is not an important factor when purchasing life insurance. However the financial strength rating of the company should be considered. Companies with a fair or poor financial strength rating should be avoided. However there is no meaningful difference between the risks associated with an insurance company rated “Good” versus a company rated “Superior” as both indicate strong companies with minimal default risk.
Although there are still agents that specialize in Burial Insurance, most agents prefer to sell life insurance products that offer larger sales commissions. Agents specializing in burial insurance may offer premium payment on a weekly basis. If purchased through an agent at the insured’s workplace, premiums may be paid through a payroll deduction plan. However, you do not need an agent to apply for Burial Insurance. Almost all Burial Insurance companies offer online applications. In fact each year a larger number of Burial Insurance policies are sold online and over the phone. The benefit of applying online is that it is much easier to compare prices from several different insurance companies. By searching for online quotes for burial insurance consumers can select the policy with the lowest premium for a given amount of coverage. There are many online insurance agencies that will provide comparative quotes from three or more companies. This is the best way to shop for the lowest price policy. If you prefer to speak with an agent before you apply, almost all online agencies also provide a toll free phone number. This way you can ask an agent any questions you may have before you select a burial insurance policy. The agent can also help you to decide whether Burial Insurance or Term Life is the best option for your situation. If you decided that Burial Insurance is the best option, they can also evaluate whether a guaranteed issue policy or a simple underwritten policy is best.
Although there are still agents that specialize in Burial Insurance, most agents prefer to sell life insurance products that offer larger sales commissions. Agents specializing in burial insurance may offer premium payment on a weekly basis. If purchased through an agent at the insured’s workplace, premiums may be paid through a payroll deduction plan. However, you do not need an agent to apply for Burial Insurance. Almost all Burial Insurance companies offer online applications. In fact each year a larger number of Burial Insurance policies are sold online and over the phone. The benefit of applying online is that it is much easier to compare prices from several different insurance companies. By searching for online quotes for burial insurance consumers can select the policy with the lowest premium for a given amount of coverage. There are many online insurance agencies that will provide comparative quotes from three or more companies. This is the best way to shop for the lowest price policy. If you prefer to speak with an agent before you apply, almost all online agencies also provide a toll free phone number. This way you can ask an agent any questions you may have before you select a burial insurance policy. The agent can also help you to decide whether Burial Insurance or Term Life is the best option for your situation. If you decided that Burial Insurance is the best option, they can also evaluate whether a guaranteed issue policy or a simple underwritten policy is best.
Applying for Burial Insurance
Burial Insurance applications are easy to complete. If you are applying for a policy through an agent, the agent will complete the application for you in a few minutes. If you apply online or over the phone, you will need to provide your personal information including name, address, sex, date of birth and social security number. You will also need to answer a few health questions. And as mentioned above, if you are applying for a guaranteed issue Burial Insurance policy there are no health questions. Each insurance company determines what amount of coverage you can apply for based on your age, sex and tobacco use.
Burial Insurance policies provide a simple (no questions asked for guaranteed issue) application process with no medical exam. They are a great solution for individuals who want to make sure that their funeral and burial insurance expenses are taken care of without the burden falling to their surviving family members.
Burial Insurance policies provide a simple (no questions asked for guaranteed issue) application process with no medical exam. They are a great solution for individuals who want to make sure that their funeral and burial insurance expenses are taken care of without the burden falling to their surviving family members.
Burial Insurance Company Ratings
Burial Insurance Companies are rated by independent rating agencies. The four most significant insurance rating agencies are AM Best, Standard and Poors, Moody’s and Fitch. Each of these independent companies is a Nationally Recognized Statistical Rating Organization (NRSRO). Of these ratings agencies AM Best Is the most well known for insurance company ratings.
The Insurance company ratings provided by the NSROs are a measure of the insurance company’s ability to meet its financial obligations including the payment of claims. Burial insurance companies are rated on the same basis as any insurance company. It is important to understand that the ratings agencies do not rate the quality or value of the policies sold by the insurance company. They only rate the financial strength of the company. In other words the insurance company with the highest rating does necessarily offer the best price or coverage.
It is also important to understand that while insurance companies may have different ratings based on the size of their reserves and the nature of their assets and liabilities, the the difference in rating may be meaningless to the consumer. An insurance company with an AM Best Financial Strength Rating of A++ (Superior) may simply be larger than an insurance company with a rating of B+ (Good). Both are financially sound companies with very little risk of default.
Consumers should only be concerned with the insurance companies rated fair, marginal or poor. However, even in the case of insurance companies with low ratings, the policy holders are protected by the State Guaranty Funds. These funds are managed by each state to protect policy holders and beneficiaries in cases when and insurance company becomes insolvent. The State Guaranty Fund of almost every state covers life insurance policies up to a $300,000 benefit amount. Since this is well above the coverage level of Burial Insurance, policy beneficiaries will receive benefits even if the insurance company issuing the Burial Insurance policy becomes insolvent.
The ratings scale for AM Best is as follows:
Secure:
Superior: A++, A+
Excellent: A, A-
Good: B++, B+
Vulnerable:
Fair: B, B-
Marginal: C++, C
Weak: C, C-
Poor: D
Under Regulatory Supervision: E
In Liquidation: F
Suspended: S
So for the burial insurance consumer the important thing to remember is don't worry about insurance company ratings. Focus on selecting the policy that provides the most benefit for the premium paid. The easiest way to find the best value for your money is to shop online and compare rate quotes.
The Insurance company ratings provided by the NSROs are a measure of the insurance company’s ability to meet its financial obligations including the payment of claims. Burial insurance companies are rated on the same basis as any insurance company. It is important to understand that the ratings agencies do not rate the quality or value of the policies sold by the insurance company. They only rate the financial strength of the company. In other words the insurance company with the highest rating does necessarily offer the best price or coverage.
It is also important to understand that while insurance companies may have different ratings based on the size of their reserves and the nature of their assets and liabilities, the the difference in rating may be meaningless to the consumer. An insurance company with an AM Best Financial Strength Rating of A++ (Superior) may simply be larger than an insurance company with a rating of B+ (Good). Both are financially sound companies with very little risk of default.
Consumers should only be concerned with the insurance companies rated fair, marginal or poor. However, even in the case of insurance companies with low ratings, the policy holders are protected by the State Guaranty Funds. These funds are managed by each state to protect policy holders and beneficiaries in cases when and insurance company becomes insolvent. The State Guaranty Fund of almost every state covers life insurance policies up to a $300,000 benefit amount. Since this is well above the coverage level of Burial Insurance, policy beneficiaries will receive benefits even if the insurance company issuing the Burial Insurance policy becomes insolvent.
The ratings scale for AM Best is as follows:
Secure:
Superior: A++, A+
Excellent: A, A-
Good: B++, B+
Vulnerable:
Fair: B, B-
Marginal: C++, C
Weak: C, C-
Poor: D
Under Regulatory Supervision: E
In Liquidation: F
Suspended: S
So for the burial insurance consumer the important thing to remember is don't worry about insurance company ratings. Focus on selecting the policy that provides the most benefit for the premium paid. The easiest way to find the best value for your money is to shop online and compare rate quotes.
History of Burial Insurance
The first life insurance policies were in fact burial insurance policies. The ancient Romans and Greeks developed guilds for specific trades and professions. These guilds established training, and standards for the trades but also provided support for the families of members that died. The concept of mutual support is the basis of all life insurance. The first life insurance policies were developed in England in the early eighteenth century. This was the first time that an annual premium was paid specifically for the purpose of providing a benefit upon the death of an insured. Although there are now many varieties of life insurance to cover many different needs, the original life insurance policies were created to pay final expenses of the insured. These simple policies were adopted by numerous ethnic social groups to share the burden of the death of a member. Although these policies are now widely available though many life insurance agents and direct from insurance companies, they still serve the same purpose, covering the final expenses of the policyholder.