Burial Insurance, Part Three: Buying Burial Insurance through a Funeral Home
There are two primary ways to buy burial insurance. The first operates like any other kind of life insurance policy, in which you name a loved one as the beneficiary who receives the payout when you die. The second option allows you to name a funeral home as the beneficiary, in which case they receive the insurance money directly.
This second option may seem a bit strange—after all, a funeral home isn’t your family, and you haven’t worked hard your whole life so they can receive a payout. However, it’s actually a quite common occurrence, and it can work out in your favor. Here’s how.
- Payout Time Frame: Unlike life insurance, which often has a delay of weeks or months between the time of death and the payout date, burial insurance tends to be available right away. This is ideal when you don’t have alternate arrangements and the money is needed to pay for your funeral or cremation.
Even then, however, there can be some problems with getting the money into your account when you need it, since even burial insurance has to be processed. When you name a funeral home as a beneficiary, you avoid this problem. Because the funeral home will be receiving the funds, they count it as a payment and allow you to use their services accordingly.
- Guaranteed Funeral: It’s not something many families like to talk about, but after a loved one dies, money becomes a tricky subject. The beneficiary of your burial insurance policy receives the payout like it is any other kind of insurance policy—and there’s no follow-through to ensure he or she spends it on your burial.
If there is any financial tension in your family or any question that your beneficiary will use the money as directed, you may want to streamline the process and work directly with the funeral home.
- Pre-Arrange All Details: It’s becoming more common for people to pre-arrange all the details of their funeral, from the casket and cemetery plot to the clothes they’d like to be buried in. If you want to ensure that your wishes are carried out to the exact letter, you can sign a funeral home as a burial insurance beneficiary and then fill out an entire contract locking in your purchases and funeral plans.
- Better Deals: When you work with a funeral home to purchase and coordinate burial insurance, you may get better deals overall. It’s in a funeral home’s best interest for you to buy their insurance and lock in rates on their products, so you’re in a position to bargain for a good deal.
Ask about what kind of package discounts or other benefits you can get by naming them beneficiary—and if there aren’t any, shop around until you find some.
Burial insurance is a great way to pre-plan a funeral in a way that fits your lifestyle. Whether you end up naming a funeral home as the beneficiary or keep it all in the family, this type of planning allows you to eliminate many of the stresses and enjoy the peace of mind of knowing you’ll be well taken care of.
To learn more, read parts 1 and 2 of our blog series, About Burial Insurance.