Understanding Funeral Insurance
Insurance especially meant to provide financial assistance that will help your family to cope with your funeral is called funeral insurance. Some insurance policies provide additional funds also to include 'other expenses', like legal expenses, medical bills, credit card dues or some such bills that could not be paid before the death of the insured person. These insurance policies are usually known as burial insurance, final expense insurance, and preneed funeral insurance. However, you need to know the differences before you consider buying one.
How to purchase
No matter if the insurance companies market the product as final burial insurance, expense insurance, and preneed funeral insurance, you need to clarify whether it's a term life policy or whole life policy. Term life insurance will have lower premiums, but such a policy expires at a predefined age or at the end of a specified duration of time, like 15, 20 or 25 years. When the policy expires while you are still alive, there is no benefit at the time of death. A whole life policy, on the other hand, can be continued all your life, and your nominee gets paid at the time of your death.
There are many insurance companies selling funeral insurance policies through agents and providers of funeral services. There is quite a variation of terms of such policies, depending not only on the company, but also the state.
What's the need for funeral insurance?
The most helpful feature of such insurance is monetary security for the family of the insured. According to the 2010 General Price List Survey by the National Funeral Directors Association, the normal expense of a customary funeral is more than $7,700, excluding cemetery costs. So, the expense of a customary funeral can reach $10,000 or even more on adding cemetery expense. You would agree it is not a small amount for the common man, more so when it can't be predicted. A funeral insurance policy comes handy for the family of the deceased in arranging the funeral. Additionally, it also saves the family from a lot of mental stress.
An especially helpful feature of all funeral insurance policies is their availability in smaller amounts, compared to life insurance policies. Since these are meant to cover final expenses only, these are available for amounts less than $ 25,000, and eligibility criteria may be easier to meet.
Knowing that the family would need funds at the time of funeral, funeral insurance companies pay claims in a matter of days after the death. So, the family gets the cash when it's needed the most, which is quite a relief.
Burial Insurance
Strictly speaking, burial insurance is quite an inappropriate name, as funerals don't essentially need a burial. In fact, such policies cover different types of final measures, which include from cremation, to donating the body of the deceased to science. Anyway, people are quite familiar with this term, as many insurance companies advertise their policies like burial insurance.
It is very important to make a funeral insurance plan, which helps to ease the burden on the family. Without proper planning, the family might come under some sort of financial crisis after your death.
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