Benefits of Funeral Insurance
Of all the funeral planning options, one of the more popular is funeral insurance. It is similar to funeral pre-plans, in that you are making preparations to cover funeral costs well in advance of the time of death. However, instead of tying up your funds at a particular funeral home or for specific services and funeral goods, you are simply setting aside a pre-determined sum of money that your family can then use to defray some or all of your eventual funeral costs.
Why Choose Funeral Insurance?
Like life insurance, this is a policy that allows your beneficiary to cover funeral costs from a large payout that occurs at the time of death. The number one benefit is saving your loved ones from financial hardship in covering all the funeral expenses.
However, it’s not just about having a large chunk of money put away. There are additional advantages of funeral insurance, including:
Easy access to the funds following your death. If you were to simply put money in a savings or trust account to be used for funeral expenses, there might be weeks or even months of paperwork before that money can be paid out to your family, as determined by the will and its executors. Funeral insurance is almost always immediately accessible.
Different types of funeral insurance policies to choose from. Depending on how you want your funeral pre-plans to be laid out, you may be able to purchase funeral insurance that is tied up in a particular funeral home or services. In this way, you can ensure that your loved ones know exactly where and how you’d like to be buried, and they may not have a choice in not complying.
Costs are spread out. Many funeral insurance policies allow you to make payments over a period of one to ten years. This means that you can make smaller monthly or annual payments toward your funeral fund without having a large impact on your income.
How to Choose the Right Funeral Insurance
There is no single type of funeral insurance, and all providers will have their own policies and regulations. The amount of money you set aside, the beneficiaries, and even the way in which the funds can be used are all determined by your specific situation.
For example, if you are afraid that naming a family member as a beneficiary might result in family tensions or that the funds might not be used as you wish them to be, you can actually name a funeral home as the recipient of the funds. This can guarantee that the money goes where you want it to, and the funeral home may even be contracted to provide certain funeral goods and services, regardless of how much prices may have escalated over the years.
There are also variations in the type of payout, in accordance with traditional insurance plans. Depending on the type of funeral insurance you choose, you might end up with 100 percent payout right away (as is the case with a single-premium policy), or you might have a graded death benefit in which the amount of payout increases over time.
Buying funeral insurance is a big step, and it’s one you shouldn’t take alone. Make sure you go over all the fine print with a loved one or lawyer, so that you are fully apprised of what happens if you want to cancel the policy or make changes to your funeral pre-plans. Ideally, you will be able to find a funeral insurance policy that suits you and at a price you an afford – after all, the entire point of funeral insurance is to make things easy on you and on your family so that you can focus on the most important thing: enjoying your life together while you have it.