Why You Need Funeral Insurance

Funerals are expensive. This is the bottom line, which needs to be addressed in advance no matter how uncomfortable the subject might be. Fortunately, funeral insurance is available to help make the preparation process both easier - and logical to undertake.

You and all applicable loved ones benefit when you take out a funeral insurance policy. Although different plans cover different aspects, the primary purpose of all funeral insurance policies is to pay for the fundamental expenses of your funeral. Continue reading to learn why you need funeral insurance and get details on the top-5 nationwide providers today.

Funeral Insurance - Understanding the Basics

Two primary types of life insurance exist. Term life insurance policies have an expiration date after which the policy is canceled. Whole life insurance policies have no expiration date. Benefits on whole life policies are therefore collectible by beneficiaries through and beyond the death of the policyholder. Funeral insurance, also referred to as either burial insurance or final expense insurance, is essentially a type of whole life insurance. One primary difference between funeral insurance and more comprehensive life insurance policies is funeral insurance is sold in smaller dollar amounts. A secondary difference is funeral insurance is designed to cover funeral costs and (depending on the policy) additional final expenses only.

Funeral insurance policies are generally written for between $5,000 and $25,000. People nearing their end-of-life stages who have larger families and significant amounts assets might already have their funeral and other final expenses covered inside larger life insurance policies. Specified funeral insurance policies are largely designed for older consumers who do not have other life insurance or savings account options in place to pay for their funerals. Depending on the provider, funeral insurance has the potential to be expensive, however. Therefore, it is important to research all the benefits to ensure you are getting the best possible coverage for your money.

How You and Your Loved Ones Benefit from Funeral Insurance

One primary benefit of funeral insurance is relevant its overall accessibility. Funeral insurance policies are both easy to find and purchase. This is by design as these types of policies are marketed to aging seniors as an option for filling emotional, practical, and financial needs. Policies are purchasable online or via telephone without the need for physical examinations. This no-exam-needed convenience is another benefit, although questionnaires about age, smoking history and serious medical or health conditions are common.

Health questionnaires are not required by all providers, however, especially those offering unconditional guaranteed approval. Please note: Guaranteed issue life insurance policies are designed for consumers who are so ill (or old) they are unable to qualify for other types of life insurance policies. In exchange for this guaranteed approval the policy premium prices might be higher than normal. One distinct benefit of a guaranteed issue policy is as follows: If the policyholder dies within the allotted waiting period, applicable beneficiaries are reimbursed all premiums paid toward the policy to-date plus interest.

Funeral insurance is also purchasable in smaller amounts, with minimums as low between $1,000 and $10,000. None of these benefits outweigh removing the stress, worry and financial burden of paying for your funeral from your loved ones’ shoulders. End of life insurance also helps pay off remaining debt and bills, further eliminating financial burden from the lives of the people you care about the most.

Average Costs of a Funeral Today

The average funeral in modern times costs between $7,000 and $12,000 or higher. These prices are approximately 227.1 percent higher today than they were merely thirty years ago. This increase is a full 103.7 percent more than the increase in costs for every other non-funeral item over the same thirty year period.

Typical Coverage Provided by Funeral Insurance

Some funeral insurance policies cover more than the costs of the funeral itself. These more comprehensive policies pay for the funerals, certain outstanding debts and approved medical expenses. Cremation might also be covered in place of having a funeral. Some final expense policies also pay out limited death benefits to a surviving spouse or applicable family member(s). Policies having benefits payouts tend to sell for higher premiums. Ultimately the price of a funeral insurance policy depends on the:

• Health of the policyholder.

• Amount of the policy.

• Amount of any payout benefits.

• Company policies and other mitigating factors.

Average Costs

The average final expense insurance policy costs approximately $50 per month. Prices vary depending on certain conditions, however. For example, a $10,000 funeral insurance policy for a healthy male policyholder with no examination or questionnaire required might cost $46 per month. A $100,000 thirty-year term life policy including funeral expenses for a healthy male policyholder (with examination required) might cost slightly less ($41 per month). The same policy for a male with high blood pressure might cost three dollars more per month ($44).

Funeral Insurance - Things to Consider

Having some type of funeral or final expense insurance has multiple benefits as stated above. Funeral expense policies are perfect for consumers looking for a small policy, who are also unqualified to open larger, less expensive policies due to their health condition or age. Cheaper strategies to attain these benefits might be available in lieu of purchasing an isolated funeral expense policy, however.

The first strategy is to simply open a savings account far enough in advance to accrue enough funds to pay for the entirety of your funeral costs. Granted, this is not a plausible option for every person. For consumers who are able to afford it, a payable-on-death (POD) account allows you to save money each month, which an applicable beneficiary is permitted to withdraw upon your death. U.S. veterans might also qualify for a Veterans Burial Allowance, which provides money toward their funerals and transportation costs for family members. Direct cremations and donating your body to a medical school also eliminate the costs of having a funeral.

If you are determined to have funeral insurance, however, it is important to explore your options. If you qualify for it, a more comprehensive life insurance policy might be a cheaper option and offer more benefits. The best way to find out is to consult with one of the top nationwide providers of funeral and final expense insurance policies available today.

Top 6 Large Funeral Insurance Providers

Top funeral expense policy providers such as  State Farm, Prudential and Guardian Premium offer a combination of low premiums, excellent benefits options and reliable customer service. Prices and features vary per provider, but each company listed below has a solid reputation with consumers today. The top-5 large funeral insurance providers (and some of their coverage features) today include:

• Mutual of Omaha (fixed premiums; $2,000-$40,000 policies; no exam; builds cash value; 45-85 years old applicants accepted).

• Aetna (fixed premiums; $2,000-$50,000 policies; no exam; builds cash value; 45-85 years old applicants accepted).

• Royal Neighbors of America (fixed premiums; $7,000-$30,000 policies; no exam; builds cash value; 50-80 years old applicants accepted).

• Foresters Financial (fixed premiums; $5,000-$35,000 policies; no exam; builds cash value; 50-85 years old applicants accepted).

• Transamerica (fixed premiums; $1,000-$50,000 policies; no exam; builds cash value; 45-85 years old applicants accepted).

• Globe Life (Globe Life offers more than just Funeral/Burial/ Final Expense insurance. They offer comprehensive life insurance plans in addition to final expense products. Their adult rates can be as low as $3.49 a month!)