Thinking about what is going to happen right after you die isn't a popular pastime for many. Yet, death is one of the few certainties that we have, and the ability to pay for funeral expenses isn't always a given. This afterlife financial issue is one of the reasons that final expense insurance has become popular. Sometimes referred to as burial insurance or a burial policy, this particular sort of life insurance policy is a type of whole life policy that is intended to pay certain expenses related to death.
Final Expense Insurance
It's not cheap to pass away anymore. Totals can be in excess of $10,000, according to the National Funeral Directors Association and many families simply don't have these sorts of funds on hand. These estimates may not even include the purchase of a tombstone or cemetery plot which will drive up costs considerably depending on what part of the country you live in. This is where final expense insurance comes in, which is a life insurance policy that is purchased with the intent of providing for these final expenses. These policies are generally affordable and don't require a medical exam to get coverage.
Life Insurance Policy Proceeds
There are several benefits to final expense insurance. While it is intended to pay for such things as funeral home costs, cremation, memorial services, and cemetery plots, loved ones can use the policy proceeds for anything they see fit. You may, of course, use the proceeds of any life insurance policy to pay for final expenses but the benefit of this particular type of policy is that it is readily available in lower limits, such as $5,000-$20,000, making it more attainable for those who need the coverage.
When you purchase final expense insurance, it's important that the family is listed as the beneficiaries on the policy and not a funeral home, often called pre-need funeral insurance. This way, the loved ones are in control of policy proceeds and the final arrangement decisions as opposed to a third party.
This specialized life insurance policy is affordable and gives families peace of mind.
Final Expense Insurance vs. Pre-Paid Expenses
In lieu of final expense insurance, some people prefer to simply pre-pay for their funeral and other final expenses. While this is an option, there are some disadvantages to doing this. Unfortunately, some funeral providers have been shown to mismanage or embezzle the funds. Also, it's possible that the company you select could change ownership or go out of business before you pass away. If you have particular wishes about your final arrangements, it may be better to leave these in writing while giving your family the flexibility to negotiate services when they are needed.
Thinking about dying can be stressful. The thought of dying with no money to pay for final expenses is a burden on the entire family. Final expense insurance is an affordable solution that allows loved ones to face difficult times with the knowledge that these necessary costs will be covered. Contact us to learn more about this type of life insurance policy or to start your quote.