Can Low Cost Funeral Insurance Help Your Family?
You may be concerned about the high costs of burials and funerals these days
. This is especially true if you have had to help pay for one. This may seem insensitive, but the issue of the cost of funerals is very real. Funeral policies can be an affordable way to plan for these expenses.
You may have also heard these types of policies called other names. They may be called final expense insurance, burial policies, or senior life. These names all refer to the same basic product.
Who buys these policies? Sometimes an older person will purchase a policy. They have found one with an affordable rate. The insured person wants to make sure that his or her family has no trouble paying for a burial, funeral, and other expenses when he or she passes away.
Sometimes the family will pay for the premium. So you can see that the policy owner does not have to be the same as the insured person. This is fine.
It really does not matter who pays for the policy. The person, or people, who will get the money will be the named beneficiaries. They will collect the proceeds of the policy when the insured person passes away.
They are free to use this money in any way they need to. This can help because a lot of funeral homes and services will take an assignment so the family does not have to come up with the cash. But if the cost of the funeral and burial is less than the amount of the death benefit, the beneficiary is free to keep the rest of the money. So sometimes, these types of policies can even be used to leave some cash behind in addition to their main duty.
These are different than a pre-paid funeral plan. You usually take out pre-paid plans with a specific funeral home or company. They are meant to be used at the place they were purchased, though you may have some rights to transfer them.
The biggest reason to consider funeral policies, in my opinion, is that the cash can be used however the beneficiary needs to use it. Beyond that, the benefits can pay for more than just the service and burial plot.
There are always lots of costs that come up when a loved one passes away. Some people may have to take time away from their jobs and lose income. Others may have to travel. Host families may have to house and feed guests. So it is probably a good idea to get a little more coverage than the minimum required to cover the actual funeral and burial.
Should your purchase a buiral policy for yourself or a loved one? There is not one right answer for every family. It really depends upon your financial situation, and if you can find an affordable funeral insurance policy.
The rates will vary. The age and general health of the insured person will matter. Insurers have different plans and rates, so it is a good idea to shop around before you buy the first policy you see advertised too. Some families do not need a policy to cover final expenses. They can help many families who have modest assets or incomes.
by: Marilyn Katz
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