Is Funeral Insurance Worth It?
The death of a loved one is the most challenging thing a family must endure.
No matter the circumstances, or the age of the deceased, death is always a shock.
When a family member passes away, it’s not only a time of sadness, but it can also be a time of confusion – what happens with finances, wills, funeral arrangements, and costs.
It can be a very overwhelming time.
To ease the burden of death in the family, you can think of getting funeral insurance.
What is funeral insurance?
Funeral insurance is a type of life insurance that pays out a lump sum to cover funeral costs. It can be used to cover the cost of the funeral service, the coffin, and other associated expenses.
Funeral insurance can significantly reduce the financial burden on your family in the event of your death. It can give you peace of mind knowing that your loved ones will not have to worry about how to pay for your funeral.
How much does an average funeral cost?
The national median cost of a funeral with a viewing and burial cost $7,848 in 2021, according to the National Funeral Directors Association. The median cost is $9,420 when a vault is included.
The national median cost for a cremation with a cremation casket is $6,970.
In the US and Canada, the average funeral costs are around $14,000, in the UK it’s £4,056.
Keep in mind, that these figures do not include expenses such as a monument or marker, obituary, or flowers.
Types of funeral insurance
There are 3 main types of funeral insurance:
- Standard Policy
- Simplified Issue Policy
- Guaranteed Issue Policy
A standard policy is the most common type of funeral insurance. It requires that a medical exam be done in order to qualify since it is designed for people who are in good health.
A simplified issue policy does not require a medical exam, but you may have to answer some health questions. However, if you answer “yes” to any of them could disqualify you. For example, simplified issue applications often ask if you’re currently living in a nursing home or if you have HIV.
A guaranteed issue policy is for those with health issues that would not qualify for a standard or simplified issue policy. There are no health questions or medical exams to apply. You can’t be turned down.
Several insurance companies offer funeral insurance plans at affordable rates. It is essential to compare different policies to find the one that is right for you and your family. If you live in Canada, you can click here to compare the various policies before deciding on the right one or hire a professional insurance broker to help you. You can also get funeral insurance through your employer or union.
What are the benefits of having funeral insurance?
Death is an inevitable part of life, and the funeral is one of the most important ceremonies to mark this occasion. It is a time for family and friends to come together to remember the life of their loved ones and to celebrate their memory.
The purpose of funeral insurance is to pay out a lump sum to your beneficiaries when you die to help cover the funeral costs.
It can be a great way to ease the financial burden on your loved ones who are already experiencing a difficult time.
There are numerous benefits to having funeral insurance, including:
Peace of mind
One of the main benefits of having funeral insurance is peace of mind. It can give you peace of mind knowing that your loved ones will not have to worry or make any financial sacrifices to pay for your funeral.
Another benefit of funeral insurance is that it allows you to choose how your loved ones use the money. It is essential to discuss with your family your wishes for your funeral so they can make the arrangements you want.
Funeral insurance premiums are generally very affordable, especially when compared to the cost of a funeral. Your price will depend on factors such as age, health, and the type of policy you choose.
It is also affordable when compared to other life insurance types. Budget-conscious people will find it an excellent choice.
If you have a life insurance policy with a death benefit, the policy may be used as collateral for a loan. This can help your family in the event of your death.
The death benefit from a life insurance policy is generally tax-free. This can help your loved ones pay for the funeral without worrying about taxes.
In a nutshell
No one likes to think about death. Funeral insurance could help to ease the financial burden on your loved ones at an already difficult time. Funeral insurance pays out a lump sum to your beneficiaries when you die to help cover the funeral costs.