If you have been considering funeral insurance, you may be confused about which type of policy or plan is best for you. There are policies and plans which can cover everything from total final expenses to just the cost of the funeral, and wading through the mass of information, prices, and suppliers is no easy feat, especially with such a sensitive subject. We’ve designed this article to simplify the process, showing you the differences between and the benefits of both Pre-Need and Final Expense Funeral Insurance.
Pre-need funeral insurance plans were developed to assist families in funding funerals before the actual need arises. Pre-need funeral insurance allows people to select services and merchandise they might require in the future at today’s prices, while eliminating some of the burden that surviving family members may be placed under. No one enjoys considering the type of coffin they’ll be buried in, or other details of their impending funeral, but forethought and planning ahead for these realities can save money and alleviate the load of our loved ones when we pass.
Funeral costs are constantly on the rise, and pre-need funeral insurance can somewhat freeze the effect of inflation by providing us with a guaranteed price for the major services that will be provided at the time. Usually the only exclusions of the guarantee are for minor items such as flowers and selected graveside services. Considering that the average funeral today costs between $6,000 and $10,000, freezing that cost via a pre-need funeral insurance plan is a worthwhile consideration.
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- Funeral Planning Guide and Checklist E-Book (Now Free) - Save thousands of dollars while still paying your deepest respects for the deceased.
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Another benefit of pre- need funeral insurance is that you can plan every detail of your funeral to ensure the arrangements meet your own personal requirements. This is of immense help to surviving family members as well, as they would normally need to start planning the funeral themselves within twenty four hours of your passing, an emotionally exhausting task at such a sensitive time.
Basically, pre-need insurance is a form of life insurance in which the Funeral Home is the beneficiary of the policy, and premiums are paid as with other insurance policies. It can be purchased from funeral directors who are licensed to sell funeral insurance, and though they receive commissions, they deal with the claim themselves, thus further lightening the load of the surviving family members.
Final Expense Funeral Insurance
Commonly known simply as funeral insurance, a final expense plan is similarly a type of life insurance, but rather than being purchased from a funeral home, it is bought from an insurance company. The advantage of final expense funeral insurance is that it can be taken out for any amount that the insured can afford (though the monies must be used for funeral expenses only), and they can name a beneficiary of their own choosing. The two major types of final expense policies are permanent life (provides lifetime coverage) and term life insurance, which covers only a selected period of time.
There is a further division within both types of these funeral insurance polices; "simplified issue" types and "guaranteed issue" types. The difference in the two is that; although a medical examination is required for neither, a simplified issue policy will require the applicant to answer particular health related questions. If a person is found to have serious health issues, their funeral insurance policy may contain a "graded death benefit", simply meaning that the premiums of said funeral insurance will increase over time, and the full value of the policy matures only after a designated period of time has passed.
The pre-planning and funding of your funeral expenses through funeral insurance can lighten both the financial and emotional burden your loved ones may otherwise bear at your time of death. Assess which type of funeral insurance may best suit your needs by discussing the various option with an insurance company or a reputable funeral director who is licensed to sell funeral insurance.