Purchasing life insurance can be a key decision in your overall financial plan. For many people, though, the thought process is that once you reach a certain age, life insurance is no longer needed – especially if you don’t have a spouse or children who are depending on your income. This, however, is not necessarily the case. If you are in search of something like guaranteed issue life insurance, we can help you find the coverage you deserve.
In fact, even if you do not require life insurance to pay off a mortgage balance or for the replacement of ongoing income, there is still a high likelihood that you will have final expenses – and because of that, you may need to consider the purchase of a funeral insurance policy.
What Is Funeral Insurance And How Does It Work?
Funeral insurance is a type of life insurance coverage that is used for paying off the cost of a person’s funeral and other related expenses. This coverage is also often referred to as burial insurance or as final expense life insurance.
Today, the average cost of a person’s final expenses can run in the range of $10,000 – or sometimes even more – when factoring in the cost of the memorial service, as well as a burial plot, a headstone, flowers, and transportation.
Many families just simply don’t have that much readily available to pay for a loved one’s funeral, and because of that, they will often need to dip into savings, or worse yet, put these expenses on credit. This can cause them many years’ worth of high-interest debt to pay off. But having a funeral insurance can be a much better alternative.
This is because a funeral insurance policy can provide a readily available amount of funds for paying off the high funeral and other final expenses. With a funeral insurance policy, the proceeds from the policy may be paid directly to a funeral home, or alternatively to a beneficiary who is a family member or other loved one.
Typically, this type of coverage is purchased by individuals who are in the age range of between 50 and 80 years of age – although there are some life insurance companies that will offer policies to people who are older.
In many instances, a funeral insurance policy may be easier to qualify for than other types of life insurance. This is because there is usually no medical examination to undergo to be approved. In some cases, you may not even need to answer any health questions on the application for coverage. This means that you could have your funeral insurance policy approved within just a matter of days, as versus weeks – or longer – with a regular life insurance policy.
It is important to understand how the benefits on a funeral insurance policy will be paid out before obtaining this coverage. That is because there are different ways in which this can occur. For example, in some cases, only a certain percentage of the death benefit will be paid out to the policy’s beneficiary if the insured passes away within the first two or three years of policy ownership.
If, however, the insured has had the policy for at least a certain number of years and then he or she dies, then the full amount of the stated death benefit on the policy will be paid out to the beneficiary.
Why Should You Consider a Funeral Insurance Policy?
There are a number of different thing that you should keep in mind as you compare providers before investing in a funeral insurance policy. These include the following:
- Financial strength and stability – One of the most important items that you need to consider as you shop for a funeral insurance policy is the financial strength and stability of the insurer. This is because you will want to ensure that the company will be there in the future to make good on its promise to pay out the claim. A good way to check this is to review the rating (or ratings) that the insurer has been given by the insurer ratings agencies. These include Standard & Poor’s, A.M. Best, Moody’s, and Fitch. In most instances, it is best to stick with companies that have been rated with an “A” or higher.
- Better Business Bureau Rating – You will also want to check an insurer’s Better Business Bureau (BBB) rating. While not all companies will be accredited through the BBB, many may still have a grade through the BBB. The BBB will grade companies in a similar manner to a school report card, with an A+ through F. The Better Business Bureau also provides information on the number of complaints that have been closed within the past three years, as well as what those complaints were in reference to.
- History in the Insurance Business – The length of time that a company has been in the insurance business can be another good thing to consider before purchasing a funeral insurance policy. While going with newer insurance companies is not a negative, those insurance companies that have a long and stable history can oftentimes provide you with peace of mind.
There are many life insurance companies in the marketplace today that offer funeral insurance coverage – and it could take you a great deal of time to review each and every one of them. A much better alternative for comparing these companies – especially as it relates to finding which company and policy will serve your specific needs the best – would be to work with an independent insurance carrier that has access to multiple carriers. This can pare down the time that it takes considerably. And, it can also help you to get the coverage that you need put in place much more quickly as well.
What Are the Types of Funeral Insurance?
When purchasing a funeral insurance policy, you will often be able to choose between either a term or a permanent type of policy. With term coverage, you will be getting pure death benefit protection. These policies are purchased for a certain amount of time, such as 10, 20, or 30 years. Because there is no cash value includes with a term insurance policy, the premium that is charged will oftentimes be less than that of a permanent insurance policy – all other factors being equal.
Permanent life insurance offers both death benefit protection, along with a cash value component. The cash in these types of policies can grow tax-deferred, so there is no tax that is due each year as it accumulates, but rather it is not taxed unless or until you withdraw it. This means that it could essentially grow and compound over time. These funds may be either borrowed or withdrawn for any reason by the policyholder, including for the supplementing of retirement income, and / or for the paying off of large debts.
Because the face amount of a funeral insurance policy is not very high in most instances, the premium will, likewise, not be very high either. This can help a policyholder to obtain this type of coverage – and to keep it in force for a long period if necessary.
What is the Best Way to Compare Providers before Purchasing?
The best way to compare providers before investing in a funeral insurance policy is to work with either an agency or a company that is independent. This means that the brokerage is not tied to just one single insurance provider, but rather offers the policies of numerous carriers. That way, you can shop and compare in an unbiased manner in order to determine which policy, carrier, and premium works the best for you and your specific needs.
When you are ready to move forward, we can help. We work with some the best funeral insurance companies in the industry, and we can assist you in obtaining all of the essential details that you need before making a purchase decision. We can do so for you quickly, easily, and conveniently – all from your home computer – and without the need to meet in person with a life insurance agent. To get the process started, just simply fill out the form on this page.
If you find that you still have any questions regarding how to compare providers before investing in a funeral insurance policy – or even if you just happen to have a question about life insurance in general – our experts are happy to assist you. We can be reached directly via phone, toll-free, by dialing 888-389-8676.
We know that the purchase of funeral insurance may seem a bit overwhelming. There are several key variables that you need to keep in mind, such as how much coverage to obtain, and how to choose the right insurance carrier. But we can walk you through the entire process so that you have the policy that suits you best. So, contact us today – we’re here to help.