It is always hard to think about the costs associated with funerals, and no one likes to consider planning for these events. However, the death of a member of the family can sometimes leave the surviving loved ones with an array of unexpected bills that do not fit their budget, and it can make an already traumatic event even more stressful. You can ease some of this burden and give you and your loved ones peace of mind by purchasing funeral insurance.
Many options exist for you to purchase a funeral insurance policy that is affordable in the short term and pays out the right amount of money to your loved ones when they need it. Keep reading to learn more about this type of insurance and how you can look into purchasing the right policy to meet your needs.
Funeral Insurance Explained
There is no doubt that you have heard of funeral insurance somewhere along the way, maybe through a friend or your insurance agent. Sometimes referred to as final expense insurance or burial insurance, this type of policy helps cover a variety of expenses associated with end-of-life. It is considered a type of “whole life” insurance but has a much smaller payout than traditional policies of that type because it serves only to cover final expenses.
Did you know that an average funeral today costs upwards of $7,000 to $10,000? Even if you have enough savings to cover those expenses or an additional life insurance policy, it may take longer to get that money into the right hands to pay for a funeral and the associated costs (such as a headstone, burial site memorial service, etc.). Funeral Insurance can help alleviate that stress by immediately providing the money upon death.
Do I Need it If I Already Have A Life Insurance Policy?
It is good to consider funeral insurance even if you have an existing life insurance policy. Those policies usually pay out more considerable sums of money. They are intended to provide your immediate loved ones with income replacement or funds to purchase a house or pay for college in the event of your death. In addition, some life insurance policies only provide coverage for a specific term (i.e., 10 years, 20 years, etc.). In contrast, a funeral insurance policy remains in effect for as long as it needs to until your death. You can also choose to have a different beneficiary for your funeral insurance than your regular life insurance. The person you designate will receive the entire policy amount and can use it as they see fit to pay for these expenses.
Do I Qualify for Funeral Insurance?
Most people do not face difficulties qualifying for funeral insurance. Many well-known insurance companies offer it, and all that is required to obtain coverage are some answers to several questions about your health. These questions usually have to do with whether or not you have recently been diagnosed with a terminal illness or if you smoke or use tobacco. Besides honestly answering the questions, you do not have to partake in any medical exam, bloodwork, or provide a complete medical history. Many other types of life insurance plans require these extra steps.
Is It Expensive to Have This Type of Insurance?
Many different plans exist to cover a variety of needs and budgets. For most people, a policy that pays out $10,000 upon your death will be enough to cover the basic needs of your final expenses. However, depending on your specific wishes, you may want a policy with more funds, like $15,000 or $20,000. Remember that these plans will generally not leave extra funds for your beneficiary after paying for those final expenses, so having a traditional life insurance policy is also good. Most companies offer different levels of premiums that you can pay so that you can choose the one that best matches your budget and needs.
- “Stepped premiums” are calculated each year and may increase based on specific criteria. You usually pay less at first for these types of premiums, and they increase as time goes on.
- A “leveled premium” will lock in your rates for life as long as you pay them on time.
- “Capped premiums” have set limits (either monetary or age), and once you reach the limit, you no longer pay premiums, but your coverage remains in effect.
- “Payout Guaranteed” premiums ensure that your beneficiary receives either the exact amount of the premiums you have paid or the original amount you were insured, whichever is higher.
Usually, you can choose to pay your premium either weekly or monthly, and with so many competitive plans to choose from, it should not create a financial hardship for you to make the payment. It is possible to get a ballpark figure of the typical funeral insurance costs based on age and coverage amount so you can plan.
How Do I Get a Quote So I Can Compare Rates?
It can be easy to visit the websites of different insurance providers and receive an online quote in minutes by entering a bit of information about yourself and the amount of coverage you desire. To get started, take a look at this list of the best funeral insurance companies. The companies on this list all provide competitive rates and have been ranked highly by their customers. As with any other type of insurance, it is always a good idea to shop around and receive quotes from several different companies so that you can rest assured that you have the most competitive rate for your needs. If you do not feel comfortable providing this information online to receive a quote, all of the companies have a phone number you can call to speak directly to a qualified agent. The person you speak with can help you determine the coverage and policy that best suits your circumstances and needs and can even guide you through the application process.