Funeral insurance, also known as final expense insurance or burial insurance, is insurance that is designed specifically to provide for the heavy costs that come with the funeral of a loved one.
Death is one of the only certainties in life so it only makes sense to prepare as best you can. When you get a funeral insurance plan, you are making sure that your family will have the necessary funds to pay for your funeral and burial. Final expenses today cost over $10,000, which is a heavy financial burden to place on those you love. But with a funeral insurance policy, your family will not have to worry about money in the midst of grief.
What Kind Of Funeral Insurance Policies Are Available?
Funeral insurance policies come in several varieties. The most popular funeral insurance plan is a traditional whole life insurance policy. These are easy to understand and easy to administer. Everyone from the owner (buyer), the insured, the insurance company, the beneficiaries, and the funeral home can understand these policies and how the money is handed out. They are not very complex, which makes them a great way to insure your final expenses. Funeral insurance can also be used to pay for final medical bills, debts, etc.
Pre-need contracts are agreements put in place with a funeral home to pay only for the cost of a funeral. You will need to make sure the funeral home abides by this contract and only charges you the agreed upon amount.
Do Medical Conditions Affect Funeral Insurance?
It depends. Most funeral insurance policies will have medical questions. However, these questions are not as detailed as a typical life insurance policy, and final expense insurance usually doesn’t require a medical evaluation.
However, if you are denied funeral insurance for medical reasons, you can probably still get covered under a guaranteed issue policy. However, the cost of a guaranteed issue policy is higher than a typical final expense policy. Also, a guaranteed issue policy will require that you live a certain time period (usually 2 years) after the policy is issued before it pays the full face amount.
What Does a Funeral Insurance Policy Cost
Until you talk to a funeral insurance agent, you will not be able to know what your final expense insurance will cost. Age, the policy’s face amount, gender, smoking status, health, etc. will determine what goes into your premium.
Regardless, if you are in relatively good health, you will be able to find a funeral insurance policy that you can afford. Need an agent? We’d love to help you get a quote.
Most insurance companies will be flexible in how they accept payment. The most popular form is through a bank draft that is scheduled to coincide with you Social Security deposit. That way you always know the money for the premium will be there. The last thing you’ll want is to have the policy lapse without your knowledge, leaving your family without the insurance money they thought would be there.
5 More Tips To Buying Great Funeral Insurance
There are a lot of choices to make when it comes to buying good funeral insurance. An agent will help narrow down the choices, but here are 5 tips to think about.
- Find out if you have an existing life insurance policy that includes funeral expenses. Some people think that just because they have life insurance that they don’t need funeral insurance. That’s not necessarily the case. If you don’t factor the cost of your funeral into your life insurance then you will not be leaving everything you want to your beneficiaries. However, you also don’t want to buy insurance you don’t need. Your agent should be able to help make that determination.
- If you decide to go the pre-need route, make sure you do your homework ahead of time before you meet with someone at the funeral home. Know your options and your state’s laws.
- Talk to your family and possibly a lawyer about your final expense needs and policy. Make sure they know that the policy exists.
- Do your research on reputable funeral insurance companies so you know you’re getting a good deal. You don’t want to end up with a policy from a company that is going to fight paying out the money your family is owed. Again, a good agent will do this work for you.
- Know about the free-look period. Insurance policies include a form of buyer’s remorse. Your policy will spell out how long this period is. You are able to cancel the policy without penalty during this time.
Funeral Insurance Is Necessary
Once you look carefully through your policy and talk to your family, agent, and lawyer, you will be confident knowing that your family will not have to worry about money when they should be celebrating your life.
If you would like to discuss funeral insurance further, please contact us.