Funeral insurance pays out a pre-decided amount to cover your funeral costs, allowing you to prepare and make relevant arrangement in advance to facilitate your family/dependents. The policy is usually availed if you are no longer eligible for life insurance due to your age or health condition.
Signing up for funeral insurance is a great idea if you want to save your family time and money. However, you have to ensure that you keep your premiums to a minimum while getting adequate coverage. Generally, people end up pay more premiums than the money paid out buy the insurance provider.
Funeral insurance providers allow you to select an amount between $5000 and $15,000 to pay back to your family upon your death, depending on the type of funeral that you want. Premiums have to be paid till you are 90 years of age, after which, insurance is free.
Here is a quick guide to funeral insurance.
A standard funeral coverage plan offers the following features:
- Benefit Payout: A lump sum amount, which is stated in the policy, is paid to your family upon your death.
- Accidental Death Cover: A lump sum amount is paid to your family if you die during an accident. This amount is 3 to 6 times greater than the amount paid if you die naturally. Accidental death cover is either offered as a built-in feature or an add-on, depending on your chosen insurance provider.
- Terminal Illness Cover: A lump sum amount is paid before your death if you are diagnosed with a terminal illness, and have less than 12 months to love.
Expenses that are Covered
Funeral insurance can pay for several expenses such as caskets, cremations, gravestones and flowers. Transportation costs can also be covered.
Funeral insurance costs depend on a number of factors
- Insured sum
- Your age – premiums are greater for old age
- Gender – women premiums are lower
- Smoker – smokers premiums are higher
What to consider
- Before signing up for a plan, decide if funeral insurance is the right choice in your case and worth the money.
- Look for affordable funeral insurance providers amongst to the top brands and boutique providers.
- Ensure that you don’t pay premiums greater than the funeral costs.
- If premiums are expected to rise as you age, find out the rate beforehand. Also make sure that you can continue paying the premium even when they increase.
Getting funeral insurance is recommended if you don’t want to burden your love ones.
- Fast and simple process: The process of buying funeral insurance is simple and fast, and requires little to no medical writings. Most of the people who go through the process are accepted; if you are between 45-75 years, some providers may also accept you automatically.
- Flexibility: You get flexibility in the sense that you can choose between stepped and level premiums. Stepped premiums rise yearly, whereas level premiums remain the same throughout. Plus, you can pay premiums once in 15 or 30 days, without any hidden fees.
- Payout Benefits: If claims are made, they are processed within 2 days.