Funeral Plan Insurance Policies

Funeral plan insurance policies, also known as funeral plans and preneed funeral insurance, are one of the ways to have peace of mind knowing your funeral cost will be covered when you pass away. It’s possible to have the cost of funeral covered in advance to save your family from having to pay for it in the future. You can take out a funeral plan from a funeral director or a specialist provider.

Funeral plan insurance policies are linked to a funeral services provider, such as a funeral home. You can make funeral arrangements in advance and you are billed at current prices. The ability to lock in today’s prices for your funeral is the key advantage of funeral plan insurance policies. You may also be able to transfer the contract to another funeral provider if the need arises depending on your contract.

There are risks involved in these kinds of policies so you need to be contracting with a reputable funeral provider that will still be in business when you die. If you are ready to make your funeral arrangements and know which funeral provider you want, then funeral plan insurance policies are an option to consider.

Once you decided to make financial preparation for your funeral, there are many options available to you. There are certain ways to save on the cost of funerals. Funeral Funds looks at the difference between funeral plan and funeral insurance policies and what is best for you.

FOR EASIER NAVIGATION:

HOW MUCH DOES A FUNERAL COST?

FUNERAL PLAN INSURANCE POLICIES AND WHAT THEY COVER

HOW DOES FUNERAL PLAN INSURANCE POLICIES WORK?

WHY USE FUNERAL PLAN INSURANCE POLICIES?

FUNERAL PLAN INSURANCE POLICIES PROS AND CONS

QUESTIONS TO ASK THE FUNERAL PROVIDER

COMMUNICATING WITH YOUR FAMILY

WHAT IS FUNERAL INSURANCE?

WHAT ARE THE TWO BASIC OPTIONS WHEN CHOOSING FUNERAL INSURANCE?

WHO SHOULD CONSIDER A FUNERAL INSURANCE POLICY?

PROS AND CONS OF FUNERAL INSURANCE

ALTERNATIVES TO A FUNERAL PLAN OR FUNERAL INSURANCE

HOW TO FIND THE BEST PREMIUM RATES ON FINAL EXPENSE INSURANCE

WHAT KIND OF BURIAL POLICIES AND FINAL EXPENSE POLICIES SHOULD I AVOID?

HOW CAN FUNERAL FUNDS HELP ME?

HOW MUCH DOES A FUNERAL COST?

According to the National Funeral Directors Association, the average cost of an adult funeral today is $8,755.  It only includes the most commonly selected items for a traditional funeral. It does not cover the cost of the cemetery. A burial plot cost about $2,000, so the average funeral cost could be closer to $10,000.

Here is the cost breakdown from NFDA

Average Cost of an Adult Funeral with Viewing and Burial

  • $2,100 – Basic services fee
  • $725 – Embalming
  • $325 – Removal of remains to funeral home
  • $250 – Other preparation of the body
  • $435 – Use of facilities and staff for viewing
  • $500 – Use of facilities and staff for the funeral ceremony
  • $325 – Hearse
  • $150 – Service car
  • $160 – Basic memorial printed package
  • $2,400 – Metal Casket
  • $1,395 – Vault
  • $8,755 – TOTAL

Average Cost of an Adult Funeral with Viewing and Cremation

  • $2,100 – Non-declinable basic services fee
  • $325 – Removal of remains to funeral home
  • $725 – Embalming
  • $250 – Other preparation of the body
  • $435 – Use of facilities and staff for viewing
  • $500 – Use of facilities and staff for the funeral ceremony
  • $150 – Service car
  • $160 – Basic memorial printed package
  • $350 – Cremation fee
  • $1,000 – Cremation Casket
  • $275 – Urn
  • $6,260 – TOTAL

There may be other funeral expenses depending on the funeral home that you choose and the type of casket, headstone, and services you want to be provided.

Prices can significantly differ depending on the location. For example, a chapel service can be expensive, primarily if the service is conducted at a chapel which is separate from the funeral home.

FUNERAL PLAN INSURANCE POLICIES AND WHAT THEY COVER

Are prepaid funeral plans a good idea?

How to prepare for funeral costs? Funeral plan insurance policies or prepaid burial plans allow you to pay for a funeral way ahead of time. It covers most of the cost of the funeral including the funeral director and associated fees.

You have the option to choose the services and select related products. The covered amount depends on how much you pay in premiums and what extras you want to include.

You may pay for a basic pre arrangement funeral plans that cover the cost of the funeral director, burial or cremation, and paperwork; other costs such as flowers and catering will be left to your family. Some plans will cover the costs of the other extras, but your premium will likely be much higher.

You can pay a lump sum upfront to make your prepaid life insurance policy payments cheaper. If you want to pay your premiums monthly to make payments easier, you will often have to pay more in the long term.

The traditional Funeral Plan includes:

  • Metal Casket
  • Removal of the body to funeral home within a 30-mile radius
  • Embalming, preparation of the body and viewing
  • Professional services of a funeral director and staff
  • Visitation before service
  • Funeral service at a funeral chapel or facility of preference
  • Filing of the death certificate and permits
  • Memorial register book and cards
  • Funeral hearse to the local cemetery

HOW DOES FUNERAL PLAN INSURANCE POLICIES WORK?

You pay a one-time payment or lump sum, or you can pay installments to the funeral director or to plan provider.

To make sure the fund is there when it’s needed; the fund is invested in life insurance or a trust fund with trustees. The proceeds will cover the cost of the funeral when the policy owner dies. They do this to protect your money until the time you need it and give you the funeral you paid for.

WHY USE FUNERAL PLAN INSURANCE POLICIES?

Funerals can be expensive, costing several thousand dollars and many people worry that when they die, they will be a burden to the family. With a funeral plan insurance policies, you arrange and pay for your funeral in advance.

Funeral plan insurance policies are designed to ease your family and loved one’s financial worries.

If you’re the primary breadwinner in the family, the last thing you want to happen when you pass away is to leave your loved ones with the financial burden.

Buying prepaid burial insurance with funeral coverage eases the financial worries because you pay for your funeral in advance and your family will not need to pay for it out of their pockets. At the same time, if someone in your family dies, you won’t have financial worries on top of dealing with the grief of losing a loved one.

Some funeral plan providers give support as well as financial assistance. Support beyond financial help can include bereavement counseling, legal assistance such as explaining funeral procedures like obtaining death certificates and help to organize the details of the funeral.

FUNERAL PLAN INSURANCE POLICIES PROS AND CONS

PROS

  1. Fixed amount – the funeral costs are lock-in in today’s prices and guaranteed not to increase with market conditions or inflation. Your cost is fixed at today’s prices.
  2. Complete control – you have full control over the details of your funeral. You can choose the type of casket, burial plot, headstone the floral arrangement, facilities, clergy, and the order of service you like.
  3. Peace of mind – a prepaid life insurance plan can provide peace of mind for you and your family knowing your funeral cost is already paid. Prepaid funeral alleviates the stress during the time of grief since your funeral is already paid and your final wishes are carried out. The plan gives detailed instructions about your last wishes at a stressful time.
  4. You can get what you want – a funeral plan ensures that you get what you want especially the cemetery plot. The location you want today may not be available five or ten years from now. Buying in advance ensures you get the location you want.
  5. Lower cost – arranging and paying for a funeral in advance can result in a lower price, versus waiting until death happens when family emotions may influence financial decisions.
  6. Beneficial when you need to qualify for Medicaid – the funeral plan can be helpful when you need to be eligible for government services or long-term nursing home care. That’s because funeral expense paid in advance doesn’t count against your estate when the government determines your financial eligibility.

CONS

  1. The number one risk of the funeral plan is the incidents where the funeral service directors go bankrupt or embezzle escrow funds allocated to pay for funerals.
  2. Funeral plan insurance policies can be expensive and require an upfront cash outlay. If you decide to pay installments rather than a one-time payment, you still need to give a large, non-refundable deposit before making installment payment.
  3. The funeral provider you have a contract with may no longer be in business when you die. You can diminish the risk by making sure your agreement allows you to transfer the contract to other funeral providers.
  4. You can’t change or alter your funeral plan if you change your mind later. Making any changes could affect the original price and may require a new contract.
  5. You may not be able to control some of your assets when you enter into a funeral trust. You cannot access it immediately if you need cash for an emergency.
  6. Funeral plan contracts may require some goods to be delivered to you in advance. Big items such as caskets will need to be put in a warehouse. They may be subject to deterioration over time.
  7. Market conditions may change with time. It is entirely possible that new and better options become available in the future. It may even be more economical than what you have selected. It is particularly true for items that are becoming easier and more affordable online.
  8. Another problem would be if you move and want to be buried somewhere else, or you want to go to another funeral home. You will need to know if the plan allows being transferred to another funeral home or if you can get a full refund. Most of the time you will have to pay an administrative or penalty fee to cancel or transfer a funeral contract.
  9. Some contracts don’t deliver as promised. Some issues arise when installment payments were not completed before you die or your fund was put in an interest-bearing account that does not mature.
  10. Some funeral plans lock you in a specific funeral home or area. Some plans require a particular cemetery or funeral home to be utilized as per agreement. If you relocated or the funeral provider went out of business, the funeral plan is no longer valid; it will not cover all the funeral costs anymore. This can cause confusion, and may not be able to honor your final wishes.

QUESTIONS TO ASK THE FUNERAL PROVIDER

Before signing any preneed funeral contract or paying for anything in advance, you should ask the funeral plan provider the following questions:

  • What are you paying for? Are you purchasing only merchandise like casket and vault, or are you buying funeral services as well?
  • Who will supply the services and merchandise you are purchasing?
  • Can you choose the funeral home or the funeral director?
  • What happens if the funeral home went out of business?
  • Can the funeral director give you a different funeral than the one you’ve chosen?
  • Can you cancel the contract and be able to get a full refund if you change your mind? Are there any cancellation charges?
  • Can you cancel the funeral plan if something happens, for example, you get a plan for your spouse’s funeral, but you became separated or divorced?
  • Can you transfer your funeral plans if you move to a different area or die while away from home?
  • Is the contract portable, transferable, and refundable without penalty?
  • Are there other expenses for the funeral, and what happens if there are?
  • What if there are outstanding installment payments at death?
  • Can you change some details of your funeral plan at a later date?
  • How does the funeral director know about the plan holder’s death?

COMMUNICATING WITH YOUR FAMILY

If you set up a funeral plan insurance policy to pay for your funeral, tell your family about the arrangements you’ve made.

Inform them about the name of the funeral director and the funeral home you’ve chosen. Make sure your family knows where the paperwork and the insurance policy and the agreement with the funeral home are located. Communicating with your family makes it easier for them to handle your funeral arrangements when you pass away.

If you take out a funeral plan, you should receive written confirmation of your coverage. Keep this in a safe place with your other necessary documents. Make sure your family knows your funeral is already paid and inform them about the details.

WHAT IS FUNERAL INSURANCE?

If you do not have funds at the end of your life to cover your final expenses, then a funeral insurance policy, cremation insurance, final expense, or burial insurance might be an ideal solution.

Is burial insurance worth it? Even if you have other traditional insurance to leave behind enough money, you may not want your estate to cover your final expenses. Having a funeral insurance plan is one of the best ways to ensure your full estate will be available to your family.

Funeral insurance also called burial insurance, and final expense insurance is specific policies designed to help you cover your final expenses.

These policies have a small face amount typically $2,000 to $25,000 (although some insurance companies offer up to $50,000). The lower coverage amount is specifically designed to cover funeral and other end of life expenses. These policies are not intended to provide supplemental income to the family like regular life insurance.

WHAT ARE THE TWO BASIC OPTIONS WHEN CHOOSING FUNERAL INSURANCE?

There are two types of burial insurance namely:

Simplified issue funeral insurance is a whole life insurance policy that has been made easy and streamlined to apply. The application, underwriting, and approval process are quick and hassle-free; you only need to answer a few health questions.

The insurance company underwrites you based on your answers to a series of health questions regarding your medical history. This is the best funeral insurance for parents because it doesn’t have a waiting period.

Guaranteed issue or guaranteed acceptance funeral insurance assures that everyone will be accepted regardless of age or medical history.

You are not even required to answer health questions. Since the insurance company is assuming more risk in insuring you, your premiums may be higher than other types of policies.

All guaranteed issue policies have a graded death benefit.

This means that the full death benefit will not be available to your burial insurance beneficiary until the policy has been in force for two to three years. The waiting period varies by insurance carriers so be sure to look out for this important detail. Should you die before the waiting period is over, your beneficiaries will only receive the premiums paid into the policy plus interest.

After the graded period has passed, your family will receive the full life insurance benefit.

WHO SHOULD CONSIDER A FUNERAL INSURANCE POLICY?

Your funeral insurance needs depend on your financial situation.

You may need to consider your financial status and your family’s budget. You might need to consider funeral insurance policy if:

  • You have no life insurance coverage
  • You want a separate insurance policy to cover your final expenses
  • You have no other way to pay for a funeral
  • You have limited savings and don’t have enough to pay for your funeral expenses.
  • You want to cover your entire family.

PROS AND CONS OF FUNERAL INSURANCE

PROS

  • Funeral insurance is easy to set up. The application is easy, and acceptance is guaranteed if you pass the eligibility requirements by the underwriter. You can pay periodically, monthly, quarterly, semi-annually and annually, there’s no need for an immediate lump sum payment to get covered.
  • There is flexibility in the use of the funds. The death benefit is paid in cash the funds can be used in any way that is necessary at the time.
  • The death benefit is paid regardless of how long you held your policy.
  • A graded benefit pays out 100% for the first 2-3 years should you die in an accident. Accidental death is covered immediately and usually results in higher claimable amount.
  • Funeral insurance allows the policyholder to plan for their funeral without having to choose the exact suppliers and arrangements.

CONS

  • There is a chance, if you live long enough, that you may end up paying more for the policy than the cost of a funeral. This typically occurs after you hold your policy for a significant number of years.
  • If you stop paying your premium for a period of time, your policy will be canceled, and your premiums cannot be refunded to date.
  • Fixed premium policies generally are more expensive.

ALTERNATIVES TO A FUNERAL PLAN OR FUNERAL INSURANCE

  1. Set money aside in a savings or money market account. You can leave the money in a bank account and let your solicitor and family member know that you have set aside funds for your funeral. Your survivors will need immediate access to these funds following your death. Make the arrangement with the bank to make the account open so that the person you trust can withdraw the funds.
  2. Whoever organized your funeral will be able to claim back funeral expenses from your estate.
  3. Get a permanent life insurance or annuity contract and name the funeral home as the beneficiary (we can help you with this).
  4. Payable-On-Death Totten Trust, you can set this account at a financial institution such as a bank. You can put the funeral home as the beneficiary (although it is not required). The funds will be designated for funeral expenses and transfer without going through probate.
  5. Public assistance. There are federal, state, and local programs that can help shoulder the cost of funeral expenses. Social Security provides a one-time death benefit of $255. The Veteran Administration also offers funeral benefits for veterans. Many counties have indigent programs to help people with limited resources to cover funeral expenses.

Having a funeral plan or funeral insurance is essential to financially protect your family during a very tough time. While your funeral coverage can never eliminate the pain of your loss, it can make the grieving period much easier.

HOW TO FIND THE BEST PREMIUM RATES ON FINAL EXPENSE INSURANCE

When seeking the best premium rates on final expense insurance coverage from any carrier – it is recommended that you work with an independent insurance agency. Doing so will enable you to look at policies and prices from multiple insurance companies to determine which will fit your needs and your budget.

If you are interested to compare life insurance policies with Gerber Life,  Globe Life, and AARP New York Life,  we have reviews for you to explore before you buy.

When you are ready to compare life insurance coverage and premiums available, Funeral Funds can help you. We work with many top-rated final expense life insurance no exam companies in the market today. We can supply you with all the essential information you need to make a well-informed insurance buying decision.

If after checking our website, you still have any questions regarding final expense insurance, please call us at (888) 862-9456 or fill in the instant final expense quotes on the left side of your screen to view your options.

WHAT KIND OF BURIAL POLICIES AND FINAL EXPENSE POLICIES SHOULD I AVOID?

TV AND MAGAZINE ADVERTISEMENTS – Most burial policies or final expense policies you see advertised on television or in magazines are sold as “the no-brainer way” to shop for this protection.

In reality, most of these policies rely on you having NO BRAIN to purchase them.

Just about everyone is eligible for immediate coverage and better pricing allowed by these heavily advertised policies that cost an arm and leg.

To make a long story short, it is better to shop for burial policies with a specialist in burial insurance, like FuneralFunds.com, than to sign up with a company that spends ba-zillions of dollars each month advertising on television and in magazines.

Increasing Price Policies

If you are looking for burial insurance for seniors over 70, beware of those TV and magazine final expense policies because they may increase in price every five years or have a two-year waiting period before your benefits kick in! What in tarnation!?!

These policies aren’t all they’re cracked up to be, and you often end up at the short end of the stick by purchasing burial insurance this way.

These tricky television magazine snake oil salesmen lure you in with an attractive rate, only to have the cost of your insurance increase every five years until you cannot afford the premiums, then you must cancel your policy.

What happens after you cancel the policy?

You’ll die and will have wasted all that money because you bought a policy that increases in price as you get older. These policies just don’t cut the mustard for most folks!

Avoid policies that increase in price every year or end at a certain age. You don’t want your family to get hung out to dry when they need this coverage the most.

Why choose Funeral Funds for my burial policy?

Most life insurance agents are fine, respectable people.

There are, however, the classic “snake oil” life insurance agents, who will sell you the easiest and most expensive policy possible.

The guaranteed issue folks claim you don’t even need to talk to an agent (but you will need to wait 2 years for your coverage to begin…even if you’re healthy). Answering a few health questions will often get you immediate coverage and MUCH better rates.

Avoid these people at all costs!

For the rest of the life insurance agents, who are fine respectable people, they are most often generalists.

They deal with all kinds of life insurance policies.

They are Jack of all trades and Masters of none.

They are nice people, but they are not the logical choice if you want the best pricing and a burial insurance policy with no waiting period.

We work with 20+ final expense companies, so we can get you qualified for the best priced plan with the intent of getting folks like you immediate coverage when possible.

We have to admit that, for the average burial insurance final expense insurance shopper, all the companies and options will often leave you more confused than a woodpecker in a concrete forest.

HOW CAN FUNERAL FUNDS HELP ME?

The reality is that inexperienced and less knowledgeable insurance agents will cost you loads of money by selling you overpriced burial and final expense policies.

Getting on affordable burial insurance with no waiting period or final expense policy doesn’t have to cost an arm and a leg.

Our job at Funeral Funds is to be the most knowledgeable burial insurance experts available. By doing so, we can knock it out of the park and get you the most accurate quote and affordable rates.

Once we know more about your age and health history, we can accurately give you burial insurance quotes from the final expense companies that are the best fit for you.

It is always in your best interest to work with an independent brokerage, such as Funeral Funds.

With access to all the best final expense life insurance companies, we will help you understand your best options, given your current age, health, and financial situation.

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