By Amy E. Feldman
PHILADELPHIA (CBS) – If you’re thinking of buying burial insurance, this is what you should ask.
Six people in Ohio were sentenced to a combined 36 years in jail last month for funeral fraud. Turns out the $600 million company called National Prearranged Services, issuer of burial cost insurance, was actually a big Ponzi scheme. Thinking those guys should be worried about meeting their maker when their time is up.
The fraud was big because burial insurance is a big business. For $2 to $3 per week, people are relieved to know that they may be covered for up to $5000 so that they or a loved one will be able to pick out a lovely casket without the crushing debt that it will mean to family members. But, keep in mind that, though they are called burial insurance, they are really life insurance polices.
A child or young adult in good health may get a better rate with a higher benefit by buying a regular life insurance policy, so compare.
Also ask in advance if you are required to use a particular funeral home in a neighborhood you may no longer live in if the policy is not used for many years.
And, remember the Ohio case shows that you need to check with your state’s department of insurance to make sure the carrier is reputable and financially solvent – the last thing you want is to have to knock on the gates of the jailhouse when your loved one knocks on the pearly gates.