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Funeral Insurance - Do I Need It?
Funerals! We all heard of them, although no one likes to talk about them. Let's face it; we are only here for a short stay. We must prepare for what lies ahead Funeral pre-planning is something everyone should consider doing. By having a plan in place, can lessen the burden on loved ones. A burial insurance plan can do just that.
It is usually referred to as a whole life insurance policy with a death benefit that ranges from $5,000 to $25,000. There are a few health-related questions and no medical exam.
With a burial insurance plan, it can take care of necessary expenses associated with the cost of a funeral. Life insurance is one of the most efficient and trusted ways to finance final expenses.
There are three ways to pay for funeral insurance. First is a Single-premium policy whereas once you make the lump-sum payment, you have immediate coverage for the full death benefit.
The second is a Graded death benefit which means the coverage increases over time. The third is a Traditional whole life policy which the amount stays the same as long as you pay the premiums, although coverage ends if you stop paying. Insurance policies have a "free-look" period.
This 30-60 day period entitles you to examine and review you policy an cancel it without penalty if you do not approve. An approach that is similar to burial life insurance is "pre-need" insurance, which is pre-payment of your funeral arrangements.
Here, you may select the type of service, casket, outer burial container (if needed), flowers, headstone, burial plot, the cost of the opening and closing of the grave, and any other items and lock in the prices by paying in advance. As we are all aware, funeral costs are on the rise. Statistics show an annual increase of 3% per year. Since 1952, the Social Security Death Benefit remains unchanged at $255.00, which barely covers the cost of floral arrangements.
Today the average cost of a funeral ranges from $6,000 to $10,000. Cremation of course is always a less expensive alternative. By not having a plan, can create emotional stress on loved ones. They have a tendency to overspend. In addition, there is much uncertainty as to how to carry out ones wishes.
There are many decisions that have to be made in a short amount of time; such as deciding which funeral home to use, what type of casket to choose, and whether to have a viewing.
Choosing the right funeral home can make a difference in the cost of the funeral. Smaller funeral homes usually have lower prices. There are funeral homes that are independently owned and some that are owned by a corporation.
You should always inquire as to the ownership. In some states, the ownership must be clearly displayed upon entering the establishment. The cost difference between the two can be quite substantial, for example, a funeral at an independently owned funeral home that is $5,000 could end up costing you $10,000 for the same service at a funeral home that is owned by a corporation.
Be sure that you get all agreements in writing. Verify all licenses insurance and funeral directors. Make sure all documents are filled out in your presence. Ask the funeral director if they guarantee any of the prices. Obtain in writing the services, arrangements, and products that were sold to you or that you are agreeing upon are included in your pre-need plan.
Check to see if the arrangements can be moved at any time to any funeral home in case your relocate and if there is a bookkeeping service fee. Find out if there is a policy cancellation fee or a refund for products and services if you decide to cancel.
Some insurance companies offer an additional service to their policy holders which is included with their policy. This service acts an intermediary between the family and the funeral home.
Their primary role is to make sure that things go smoothly and easily for the people who will be handling their arrangements for them. Upon death, they will contact the funeral home of choice, inform them of your arrangements and emphasize keeping within your pre-determined budget. By having a funeral insurance plan, you can rest assure that you will have enough to take care of most if not all of the expenses
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