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Last Updated on July 15, 2024 by Insurdinary Editorial Team | Fact Checked by Rhonda Gary -->
Like many Americans, you might have concerns about rising funeral costs in the United States. The fluctuating economy makes no promises, leaving average citizens scrambling to plan around their last wishes and their families’ financial needs. Life insurance can help you budget for funeral expenses while leaving some of the death benefits to aid your family.
However, life insurance is as complicated as funeral plans. You have numerous options you can choose from. Which avenue should you explore first?
Insurdinary provides a comprehensive overview of funeral service options and how life insurance contributes to your plans below. Learn more about anticipating funeral costs with our helpful guide.
The Funeral Rule authored by the Federal Trade Commission states that you, as a consumer, have the right to pricing transparency when considering services from various funeral homes. It also allows you to personalize your funeral proceedings as you see fit, with a few exceptions. Your funeral home of choice must also supply an itemized bill before you sign a service contract.
The Funeral Rule protects customers from excess charges they cannot afford. For example, if you plan a memorial service for a deceased loved one, you might choose less expensive service and product options to stay within a predetermined budget. The funeral provider cannot deny service based on your decisions.
You can use the Funeral Rule to help your family plan how to use burial expenses allotted by your insurance policy.
It’s no secret that funerals typically cost thousands upon thousands of dollars. The final price ultimately depends on the services included. The average funeral arrangement might involve the following:
End-of-life ceremony costs are as diverse as the ceremonies themselves. Minimizing the number of services can significantly lower your memorial expenses. However, you should also consider your family’s wishes to ensure they have the opportunity to grieve and bid farewell before moving on.
If you have some type of life insurance coverage, you don’t have to worry about your family shouldering the interment charges with no support. Life insurance policies typically cover some or all of the financial burden created by funeral expenses. Explore various life insurance policies below to find an option that suits your needs.
Universal coverage is permanent, flexible, and has a high return on investment. You can change your premium and death benefits according to your budgeting needs. You can also borrow or withdraw money from your death benefit without negatively impacting the benefit.
Like universal life insurance, whole life is another type of permanent life insurance. Its expensive premiums never fluctuate as long as you hold the policy. Purchasing a whole life policy guarantees cash value that can cover funeral costs, medical debts, and bills.
However, it doesn’t offer the same level of flexibility for withdrawals as universal policies. Providers will also base your premium rates on:
These factors influence your lifespan. Therefore, they dictate how much the provider can expect from your premiums.
Most term policies only cover their policyholders for up to 30 years. Once the term ends, you can either renew your policy or choose a different provider or coverage type. People prefer this policy if they have a strict budget or find themselves in between policies.
However, you receive no payout or benefit once the term ends. Therefore, term life policies only cover funeral service fees if the policyholder’s death happens within the agreed-upon term.
The Insurance Information Institute defines burial insurance, also called funeral insurance coverage, as a type of whole life insurance policy that pays a substantial death benefit to go toward funeral expenses. Many life insurance policies include varying levels of death coverage. However, a final expense policy specifically covers expenses associated with funerals, such as burial or cremation costs.
You can purchase a final expense policy alone. Alternatively, shop for more comprehensive coverage options that also offer generous funeral coverage. Some burial policies can cover a whole family’s funeral expenses, alleviating the stress associated with hashing out separate finances for all your loved ones.
Like final expense insurance, pre-need policies offer just enough to cover most or all of your funeral expenses. However, you purchase this coverage specifically from a funeral home. It will only handle services that the funeral home provides. Therefore, your family must source all funeral services from the pre-need provider.
Some people might assume life insurance covers, well, their whole life. However, it mostly serves as an investment for future monetary needs and coverage for death expenses. Similarly, the following insurance varieties will not assist with burial or funeral services:
While this coverage is essential to protecting yourself and your property, it does not offer payouts for funerals.
Although life insurance policies ensure your family can fund a proper funeral, they have some limitations, depending on the chosen policy. Speak with a qualified agent from an insurance agency like Insurdinary to ensure you understand how your life insurance policy works. Then, keep the following points in mind going forward:
Ultimately, using insurance to help with funeral costs and financial stability for your family members requires organization and some virtual navigation skills. Although the process seems complex, you can utilize readily available tools to streamline your plans and keep pertinent parties informed.
Fluctuating funeral costs should not scare you away from proactively plotting your memorial service. Eliminate the guesswork with a little help from Insurdinary. Start shopping for affordable, comprehensive life insurance coverage today with our helpful online quote tool.
We’ll help you choose the best options for you and your family.