You may not get what you pay for when it comes to burial insurance. It's meant to cover your funeral costs. But if you're not careful your family may have to pay. Many Mid-Southerners have burial insurance policies stuck deep in a desk drawer. But as one Mid-South family found out, it's worth digging it out and reading it sooner as opposed to later, because buying peace of mind doesn't always pay off.
On the last day of his mother's life, Garner Boyd got the surprise of his. When Boyd tried to cash in the burial insurance policy to cover the cost of his mother's funeral, The Memphis Funeral Home, where she bought policy in 1970, refused to honor it. Garner Boyd said, "I was highly frustrated. I felt like they done backed us into a corner there." Turns out the insurance company that wrote Mrs. Boyd's policy 35 years ago no longer exists. Its policies are now backed by another insurance company. Several years ago, unbeknownst to Boyd, The Memphis Funeral Home cancelled its contract to honor that company's policies. They told Boyd he'd have to shop around for a funeral home that would, or pay for his mother's funeral, nearly $5,000, himself. Boyd said, "I didn't feel like shopping. There's no way I could shop in the way I was in."
The president of The Memphis Funeral Home says there's a good reason why he cancelled the contract to honor burial insurance policies like Boyd's. E.C. Daves, The Memphis Funeral Home said, "Well, you take about a $2,500 loss every time you would." That's Because, burial insurance policies often didn't account for inflation and have a maximum payout around $500, even though today it costs funeral homes a minimum of $3,000 per client. Which is why funeral directors warn consumers to dig out old policies early since they aren't always set in stone. Ultimately, Boyd's family decided to pay the $5,000 for The Memphis Funeral Home to handle the burial. But there are still several funeral homes in the Mid-South that do honor old burial policies. Shop around now to avoid surprises after the loss of a loved one.
Things to remember before you buy a burial policy: