Do I Really Need Funeral insurance?

Most of us feel we do not need funeral insurance if we already have life insurance in force. After all, part of the life insurance should cover it, right? The answer depends of what you really want on your funeral, and if you have your funeral final wishes in order. Technically, Life insurance is for your family’s living expenses after you die, and funeral insurance is for your funeral expenses once you pass away.Additionally , A Life Insurance Policy will not pay death benefit until the death certificate is received, and claim is processed. Funeral Insurance, on the other hand, can pay your funeral expenses in as fast as 24 hours,therefore avoiding financial stress for your family.

Main Types::

    • Final Expense insurance
    • Pre need insurance
    • Funeral Insurance Trust
    • Funeral Annuity

Final Expense Insurance

Final Expense Insurance is a simplified issue whole life insurance between $1,000 and $30,000 designed to pay your funeral and other  final expenses. Typically, it requires some medical questions on application and most people get an approval in just a few days. Once you are approved for level benefit,you are insured from day 1. You may also get a graded offer, which it has a 2 year waiting period.Additionally, Some companies may consider you uninsurable if you: Are incarcerated, in hospital, HIV positive, or confined to a bed or wheelchair.

Preneed insurance

Pre need insurance is a whole life insurance specifically written to cover your funeral expenses in a specific funeral home. This means it cannot be used to pay cemetery costs, or any other debts left behind. However, A preened insurance is ideal when you want to lock in prices on certain merchandise and services like: Casket, funeral service and vault. Most insurance companies offer 3,5 7, and 10 year pay options. Although the payments can be consideraby higher thana fina expense policy, the payment only has to be paid for shorter periods of time.

Funeral insurance Trust

Is a whole life insurance policy which can be converted to an irrevocable funeral trust. This means that medicaid, or any other creditors cannot consider this policy an asset. This is important when you need to qualify for senior medical benefits or senior housing. However, once it becomes irrevocable, no changes can be made to contract.

Funeral Annuity

A Funeral annuity is a fund established with a life insurance company to cover specific funeral expenses. It usually earns fixed interest during the life of the contract, and it can be paid off over the course of 5 to 7 years, depending on the contract you signed. It also locks in prices against future inflation and it is assigned to a specific funeral home you choose. It s important to mention that most pre-need insurance agents do not mention this option.The main reason is the low commission they earn. Therefore, it is important you, the consumer, request the agent to show you this option.

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