7 Reasons Why Funeral Insurance Is So Important

by Bethany
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Most people don’t want to think about certain situations, but the average funeral costs around $10,000. That price tag can be a shock for people already going through the difficult time of losing a loved one. Funeral insurance can help offset those costs and let you sleep easy at night knowing that your family won’t have to jump through hoops to make sure you get a proper burial when you ultimately pass on.

Planning ahead with funeral insurance gives other added protections aside from monetary. Looking toward the future can give you an opportunity to discuss with your family and loved ones exactly how you would like to be remembered after you pass on. You can set a budget depending on the type of insurance policy you choose and offer insight on what goes into your funeral and burial. This may not be the most comfortable discussion to sit down and have with your friends and loved ones, but when they time comes to mourn you, they’ll be grateful that they have a clear way of honoring your memory.

7 Reasons Why Funeral Insurance Is So Important

What Is Funeral Insurance

Funeral insurance is a type of insurance policy designed to pay for your funeral and burial costs. It can also be used to cover the costs of cremation if that is the method you’d prefer. These policies can be called many different things depending on where you live. Other names for this type of policy is burial, pre-funded, or final expense.

Regardless of the name, it is set up like many of insurance policies. You pay towards the policy each month, and when the time comes, the insurance company will cover your funeral costs. You’ll need to designate a beneficiary that will receive the money once you pass on. This should be the person that will handle the arrangements for your funeral.

You can set up funeral insurance through an insurance agent of your choice. They can help you choose a plan the most aligns with your wants and needs. Another way to pay towards your funeral is to pay directly to the funeral home you want your remains to be handled at. This is a form of funeral insurance, but it most often called a pre-need plan when handled by a funeral home. Many funeral homes will lock in today’s funeral price for you to pay towards, so your family will not be surprised by a larger bill.

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Who Should Get Funeral Insurance

This type of insurance is generally for elderly people who are worried about their ability and their family’s ability to cover the lump sum of a funeral and a burial. Many of these policies are short term in nature, ranging from one to ten years. Younger people do not generally need to purchase this type of insurance because their money can be better spent on life insurance policies. Life insurance policies offer a higher yield for a lower payment overtime. Funeral insurance is for short term payments towards a funeral for someone whose time of passing is closer rather than further away.

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What Does Funeral Insurance Cover

It can cover a number of things to meet your needs. If you’re looking a simple plan that covers the basic costs of a funeral, there a policies available for that. Some policies can offer advantages of wide coverage ranging from outstanding medical debt, other debts you may owe, or even legal costs. The best way to figure out what kind of coverage you’re looking for would be to sit down with your family and contact an insurance agent or a funeral home together. They can help you figure out what sort of coverage you need and what fits into your monthly budget.

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Who Benefits From Funeral Insurance

You, your family, and loved ones all benefit from this type of insurance by knowing that your funeral and burial will be covered at the time of your passing. This can be an immense relief for all of you to have this financial worry taken care of in advance. Many funeral homes will lock in the current price of a funeral for people who take advantage of their pre-need plans, so planning ahead will also end up saving money for your family and loved ones. When you pass, they will be able to spend more time grieving and honoring your memory.

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Choosing a Funeral Insurance Policy

Choosing your policy comes down to your needs, wants, and expected funeral expenses. Once you figure out what your funeral and burial will cost, it becomes much easier to narrow down what kind of policy it would be best for you to pursue. When you have a good idea of what your expenses will be, it’s time to contact an insurance agent with your family and see what kind of policy aligns with your wants and needs. The agent will be able to walk you through the different kinds of policies that are offered and explain them in more detail.

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Changing Your Policy

In the event that you need to change your policy, you’ll need to contact your insurance agent. Some policies come with restrictions and rules about the kind of changes that can be made to them. If the option to change your policy is important to you, you should make sure to bring it up to the agent when you a first shopping for a policy. This will help keep you from running into any road-blocks down the line in the event that you want or need to change your policy. While you may not think you’ll want to change your policy, things might happen that are out of your control like the funeral home you made your plans with shutting down.

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Average Cost of Funeral Insurance

Pricing can vary depending on the type of policy you go with. The average cost of a policy through an insurance agent can cost you around 15-30 dollars a month and offer coverage of up to 10,000 dollars. If you work directly with a funeral home, you may open an account for anywhere between 10,000 and 15,000 and put funds in the account every month. Rarely, funeral homes will allow accounts of 25,000 dollars. There’s generally a several hundred dollar startup fee for these types of accounts, and many funeral homes charge a maintenance of around 100 dollars per year the account is open.