Funeral insurance is a great investment for anyone planning ahead of time for their funeral and their loved ones. There are so many different types of funeral insurance available on the market today. Choosing the right funeral insurance plan depends on a number of factors. Factors such as cost, dependability and reputation are just a few of the many factors to consider when choosing a funeral insurance plan. Let’s take a look at the various types of funeral insurance and how you can choose the right one for you and your family.
One of the most popular types of funeral insurance plans are those that involve a type of payment called a prepaid funeral trust. One advantage of a pre-paid funeral trust is that there is no need to worry about an accidental death while still providing coverage for expenses that would normally be covered by Medicare. Another advantage is that pre-paid funeral plans usually qualify for discounts from Medicare.
Another type of funeral expenses insurance plans available are those that cover actual expenses incurred at the funeral home. These plans will cover caskets, funeral costs and funeral flowers. The downside is that these plans may not cover funeral expenses incurred at a mortuary. These funeral expenses usually cover expenses such as embalming, disposing of remains and cemetery fees.
Also consider other types of final expenses insurance such as variable or universal life policies. Universal life policies will not only provide coverage for funeral expenses, but will also give beneficiaries the ability to invest in an interest bearing account. This allows the beneficiary to use the funds from the account for any purpose such as education, mortgage or business investments.
You should also consider the financial situation of your loved ones before purchasing funeral insurance. If you have an overwhelming debt load, consider debt counseling services to help you work through your options. Your loved ones may already be facing financial hardship and in these circumstances, a debt counselor can be invaluable. A funeral service can be very stressful and adding on additional financial worries could make matters worse.
If you choose to use an insurance broker to obtain your policy, be sure to do your research and know what you are getting. Some brokers are actually just advertising agencies and will tell you what you want to hear. It’s important to find an independent agent who will talk you through the options fully. An independent agent also will help you understand the fine print so that you can make the best decision regarding your final expense insurance.
There are several types of policies including; term life, universal life and whole life. Term life is considered a lower cost option but it does not have the flexibility of a universal life policy or the investment options of whole life policies. Universal life policies provide coverage for burial expenses and may also provide some income in the event of your death. Whole life insurance policies can be purchased for a specific period of time or an indefinite period of time. Choose the type of plan that best suits your needs.
Choosing a burial insurance policy can be a stressful decision. There are many decisions to be made but it typically doesn’t require a great deal of research. Be sure to discuss the options with an experienced agent.
Burial insurance plans can be paid in one or more ways. If you have questions about the type of payment to use, such as a refund/reward check, then the Funeral Directors Association or a company that participates in the American Burial Council’s “reaptions program” could be of assistance. If the funeral service will be tax-deductible, then the provider of the service can provide you with a list of providers who participate in the program.
Some plans offer both premium and death benefits. The premiums, if they meet the maximum threshold, will pay the entire funeral costs. Death benefits will pay dependent family members the amount of the premiums or a percentage of the premiums, whichever is higher. Premiums may also be paid directly by the family members or through a credit/debit line if one exists.
There are other choices you have regarding the type of payment for your death benefit. You can either use a bank account, which would be reported on your federal income tax return, or pay directly to the beneficiary’s bank account. Also, you may choose to pay the premiums and any associated costs directly to an insurance company or institution, or allow the insurance company or institution to make the payments for you. With a traditional whole life plan, you may also have options to select the specific coverage you prefer. With a customized or guaranteed whole life plan, you will get the same level of coverage for the same cost as with a traditional whole life plan, with the additional benefit of having an additional investment to provide additional funding.