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What is Preneed Insurance?

If you were to pass away, your loved ones would be left with all of your debt and all of your final expenses, but maybe you’re in a part of life where you don’t have any expenses, and the only thing your family would be responsible for is your funeral costs. One great way to offset these costs is to purchase preneed insurance. These policies can give your family the protection they need to pay for those expensive costs but are they worth the money? There are several different factors that you’ll need consider.

The average costs of a funeral is around $7,000, some funeral expenses can easily reach $10,000, which can be difficult for a grieving family to pay for, that’s where preened insurance policies come in.

Preneed Insurance – What you need to know

what is pre need insuranceThese policies can be bought from a funeral home or through a private insurance company, and they are exactly what they sound like, you’re basically paying for your funeral before you need it, hence the name. They are typically bought directly through the funeral home that you’re going to use, but there are some insurance companies that work with funeral homes to provide preneed insurance.

These policies are intended to cover the costs of your funeral to offset the bills that would be left to your family members after you passed away. Without planning ahead for your family, there would be left paying for all of your expense out-of-pocket, which can put a severe financial strain on your family.

The plans are whole life policies, so as long as you continue to make the premium payments on the plan, you won’t lose coverage. If you do stop making the payments, you won’t have the funeral coverage that you need for your loved ones.

The Advantages

Just about every funeral home will offer you a price guarantee on the goods or services that you purchase the preneed insurance for, which means that regardless of the price when you pass away, you won’t be charged more. Your preneed insurance coverage will still cover the costs of the goods and services.

Another benefit to these preneed insurance policies is that they are easy to acquire unlike some other forms of insurance. With a traditional life insurance policy, you would have to go through all of the hoops and medical underwriting, which can be a long and frustrating process. These plans are much simpler to purchase.

You’ll have the ability to pay for the insurance in one lump sum, or string it out over several years depending on which course works better for your budget. A lot of people will pay off the whole policy automatically, but if you don’t have all of the money immediately, you can pay off the plan over the course of three or five years, which gives you plenty of time to save the money without breaking your bank.

The Disadvantages

There are several disadvantages of these types of policies that you should be aware of before you purchase one of them. The biggest one is that they are expensive. There are several other options to fund your funeral that will be much more affordable than a preneed policy. It would be more beneficial for you to save the money that you would spend towards the preneed policy and simply set it aside and designate it as a funeral fund. If you’re looking for the most affordable way to protect your family, these aren’t the best option.

The another problem that some consumers run into is the funeral home that they purchased their preneed insurance through has gone out of business since they purchased the policies. Additionally, these plans are nonrefundable and nontransferable, which means that you won’t be able to get your money back or switch funeral homes if you ever want to. As long as you’re happy with the funeral home, and never need to request a refund, this isn’t a major pitfall, but it is something that you should take note of.


For a lot of people, preneed insurance isn’t the best option, but there are still several options that you can consider to get protection for your family. As we mentioned earlier, one alternative is to simply put the money in a separate savings account and designate that money as funeral money. This is an easy way to give your family the money that they need, but this isn’t the best option.

One of the most affordable options is a burial insurance plan. These plans will give your family the funds they need to pay off any final expenses that you would leave behind, without breaking your bank in monthly premiums. There is also another option called guaranteed issue life insurance.

You can get a funeral insurance policy that will give your family enough money to pay off all of the goods and services from the burial and related expenses, and also enough money to pay off any additional expense that may pop up after your passing, like paying movers or any other small fees.

There are a lot of different factors that go into calculating your premiums for funeral insurance, but in most cases, applicants are surprised to see just how cheap their funeral insurance policy is.


Nobody wants to think about his or her own death, but it’s vital that you plan for the things that you can’t avoid. Not planning for your death can leave your loved ones with some difficult decisions and financial burden that can make a difficult situation a lot worse. If you want to make the process as easy and as stress-free as possible, it’s vital that you plan ahead and make all the appropriate decisions ahead of time. One of those decisions is to have the insurance policies in place to give them the resources they need.

You might be at a point where life insurance is too expensive, or your no longer have a need for it, but that doesn’t mean you shouldn’t have any insurance protection at all. One of the biggest mistakes that a lot of households make is to drop their life insurance policy, but not have any other financial security for their loved ones after their passing, which can put them under thousands of dollars of debt.

If you have any questions about preneed insurance or burial insurance, please contact one of our against today, and we would be happy to answer those questions for you. We can help connect you with the perfect burial insurance policy to fit your needs. We will find you an affordable and quality insurance coverage that is going to give your loved ones the money they need to get through the difficult process of losing you without adding any financial burdens to the situation.

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