It seems that we hear this question more and more from our existing clients and seminar attendees. Whether for themselves or their parents who have retired, people have noticed that funeral costs are increasing. While the sky is the limit for the expense of being laid to rest, the average cost of a moderate funeral service is around $7,500, although it often exceeds $10,000. You or a loved one may be faced with “how are we going to pay for the funeral and the other bills?”
The main reason funeral expense life insurance policies are more popular today is the need for immediate cash at death to pay for the funeral. Almost anyone can qualify, even those with health problems. While the insurance amount is usually relatively small, the intent is to pay only for the funeral and related expenses – exactly what your family needs.
Smart buyers are buying permanent life insurance with death benefit amounts from a few thousand dollars up to $10,000 or $20,000. A permanent life insurance policy is, as the name implies, permanent. You can’t outlive it and the rates stay the same for your entire life. On the other hand, term insurance is less of a bargain because you can outlive it; it expires after a certain period of years or at a certain age. The permanent policy is designed to be in effect when you need it most.
Also available for funeral expenses are pre-paid funeral plans that can be purchased directly from the funeral home. Usually the funeral home will make certain guarantees as to what goods and services will be provided. Either the permanent insurance or pre-paid plans work, depending on your specific needs and wishes. One advantage that most people like about permanent insurance is that it is portable: you can change your mind about where the service will be held.
Either way, make sure you know what you are getting. You are better off dealing with an experienced professional in person, rather than a mail-order company or a phone solicitor. For instance, some life insurance policies pay less if the early years if you are in poor health. On the other hand, final expense policies generally offer full protection as soon as your policy has been issued.
Planning your funeral is just one part of your overall estate plan. Make sure you work with a qualified professional that understands your concerns and your plan!
Related Topic: What do I do when a loved one dies?
