The average cost of a funeral is around $11,000. And that number can vary wildly depending on the type of funeral you have.
For most people, that cost has to be covered out-of-pocket or carried by their loved ones. This can put a lot of strain on their finances during what is an already difficult time.
If you could save money on the cost of a funeral, wouldn't you want to?
Here's the good news: both life insurance and insurance for funeral expenses can help cover the cost of a funeral. But how do you decide which is the best option for your needs?
Before you decide, you need to know how each type of coverage actually works.
Life insurance is designed to give your loved ones a lump sum payment when you pass away. This payment can be used to cover their living expenses, mortgage payments, replace income, and any other incidental expenses they encounter.
This includes any medical bills you incurred before your death as well as the cost of the funeral itself.
Every life insurance policy will have different coverage limits, but those are ones you can decide on when shopping for the policy. Some people choose policies with limits as low as $15,000 while others purchase policies with guaranteed payouts of well over $1 million.
Ultimately, the coverage limits are entirely up to you and how much you can afford. If you're worried about covering the bulk of your family's expenses for several years after your death, a larger policy will be better.
You can even customize the policy to provide additional protections like accidental death and dismemberment or disability income replacement which pay out additional funds on top of your life insurance disbursement.
The cost of coverage will be determined by your overall health, age, and underlying medical conditions. You will likely be required to undergo a health screening with your doctor before you can start looking for a good policy.
For example, if you have pre-existing medical conditions and are over the age of 50, your insurance coverage will cost you more each month. If you're younger and still in good health, the same policy will cost you less.
You can purchase a policy at any time and any age.
For families that are worried about their financial future, life insurance makes a ton of sense. Keep in mind that payouts can take time to process and your family may not receive the money before your funeral. If this is the case, they'll need to pay for the funeral out of pocket.
Insurance for funeral expenses provides money to cover just one thing: your funeral. This includes the cost of the burial or cremation services, the casket or urn, the mortician's services, and anything associated with the cost of the funeral itself.
The only limit is the amount of coverage offered by the policy.
There are no restrictions on the types of funerals you can have or the types of caskets, urns, or other burial equipment you opt to use. The funds will cover the cost regardless.
Think of funeral insurance as a supplemental policy that complements your life insurance policy.
With the cost of funerals being so expensive, that service takes a lot of money away from your life insurance policy.
Using life insurance for funeral costs can be done, but it may be done at the cost of your loved ones' financial stability. Purchasing a funeral insurance policy allows your beneficiaries to give you the funeral you deserve rather than having to choose between paying the mortgage or covering the service.
Remember, life insurance is designed to protect your family's financial well-being. Policies are not purpose-built to pay for funerals and memorial services.
If you have a family that relies on your income and contributions to make ends meet and pay the bills, life insurance is an absolute must. However, that doesn't mean that funeral insurance should take the backseat.
Instead, invest in both policies. This will ensure that your family has the money they need to cover their expenses and pay for the funeral without facing financial hardship during an already difficult time.
If you're looking to save money on insurance coverage and need to pick one policy over the other, carefully examine your family's financial situation. If they don't rely on your income, it may be acceptable to purchase only a funeral insurance policy. However, it's best to discuss this decision with your loved ones prior to deciding against life insurance.
Comparing quotes on insurance for funeral expenses and researching providers on your own can be tough, but finding the coverage you need at an affordable price doesn't have to be a stressful process. Get a free no-obligation quote today.