Cemetery During the DayFor the past few years, the average cost of a funeral has held steady at $10,000. While a steady price is a good thing, this kind of money is still quite a lot for many families. If you don't want to leave your family in a bind during an already distressing time, you may be considering final expense insurance. Before purchasing a policy, you should consider whether it is really the right option for your needs.

How Old Are You?

Most final expense insurance policies have an age limit. Typically, if you are younger than 50 years old, you will not be able to purchase this type of policy. However, if you are at least 50, compare and contrast options before signing on the policy's dotted line.

Types of Funeral Expense Insurance

Funeral expense insurance usually falls into one of three types of policies, each offering its own benefits.

  • Preneed funeral insurance: This insurance is linked to a specific funeral service provider. You pay for the policy over an installment payment plan that lasts up to 10 years. Once you pay the premiums, the policy is yours for either a specific amount of time or for life, depending on what you purchased.
  • Burial insurance: Burial insurance is part of a term life insurance policy that has lower death benefits, typically not more than $10,000. The money is paid to your specified beneficiary who can use it for your burial or anything else he or she deems necessary.
  • Final expense insurance: A final expense policy is usually more affordable than other types of burial insurance policies and can be either a term or permanent policy.

If you are unsure about purchasing a separate policy, you can also factor burial expenses into your term life insurance or permanent insurance policy. Term policies can range from 5 to 30 years and cover only death benefits. Permanent policies last for your life and accumulate a cash value.

Preneed Insurance Is Very Popular

Preneed insurance is a common option because it covers so much, including the burial plot, casket or urn, gravestone, cremation, flowers, and even the funeral cars. Not all states allow this type of policy because the funeral home is listed as the beneficiary, so check your state's laws before purchasing this type of policy. However, if it is an option in your area, it may be a good one because it leaves your family with literally no worries regarding money. All they have to do is choose the items you would want.

Reasons to Consider Burial Insurance

There are several reasons you may consider burial insurance as a means of providing for your family if they find themselves in the unfortunate situation of planning your funeral. Typically, if you do not have any savings or life insurance coverage, you would benefit from a burial insurance policy. You can also use this type of policy to cover the entire family or if you want a policy that is separate from your life insurance.

Do Your Research First

If you do decide that some form of burial insurance policy is a good idea for your family's needs, contact your insurance agent first. If you don't already have one, do your research before signing up for any policy. Not only do you want to ensure they provide enough coverage it varies by company but you also want to check references and licenses to ensure you are working with a reputable company that will not leave your family in the dust should they need to use the policy.

Whether you are 30 and have just started a family and want to provide for them, or you are reaching retirement age and want to prepare as much as possible so you can enjoy your twilight years, burial insurance can help most people in most situations as long as you find the right agent to help you.

Category: Funeral

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