Do You Need Funeral Insurance?

Insurance policies tend to provide people with a sense of security; comfort in the fact that provisions are made in the event something bad happens. Funeral Insurance works essentially the same way as any other insurance premium; you pay a premium, whether monthly or annually, and upon death the beneficiary you nominated receives a lump sum payment to cover your funeral expenses. Most companies offer up to $20,000.00 in coverage as a basic funeral can average between $6,000.00 and $10,000.00.

There are various types of funeral insurance policies, the main ones being:

Preneed Funeral Insurance – often purchased directly from a funeral home, with this coverage you pay installments for a fixed amount of years and the policy remains in effect thereafter

Final Expense Insurance – this can be purchased from insurance companies and operates similar to life insurance policies

funeral insuranceObtaining a funeral insurance policy is often easier than life insurance as most companies offering funeral insurance do not require that policyholders undergo a medical examination. This may however, make it more costly since companies often raise their prices to cover their risks of adverse risk. Funeral insurance policies are ideal ways to handle the costs of final expenses and burial expenses because you can make small, periodical payments. Many people often turn to funeral insurance for the peace of mind it provides knowing that burial expenses are one less burden their family will have to worry about during their time of grief. Whereas life insurance policies have a history of taking months to pay out, in most cases, funeral insurance companies pay out quickly, giving your family the money necessary to make arrangements. Policies linked directly to the funeral home also means that you can direct the funeral home prior to your death and the home will carry out the arrangements, so your family will have less stress planning your funeral.

Before you get sold on the tagline, “death is inevitable and you want ease the burden of your family while they mourn your loss,” consider whether you really need funeral insurance. Although you may be 65 years of age considering funeral insurance, if you live until you are 90 years old you may well end up paying more in premiums that the death benefits your family will receive. Funeral insurance policies are best suited for people who do not have a life insurance policy or adequate savings to cover the average funeral expense of $6000.00. Also, if you suffer from a terminal or life-threatening illness, funeral insurance may be a good alternative if you cannot obtain life insurance or premiums are too expensive based on your health conditions. Funeral insurance is also a good option for those with less disposable income as it allows you to make financial allowances for your final expenses with small, periodical payments.

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