Should You Purchase Burial Insurance?
While not pleasant to contemplate, you should make burial insurance part of your financial planning. People are living longer now than thirty to fifty years ago. We see seniors passing in their eighties and nineties quite regularly.
However, many people will not live that long. When looking at retirement years, no one wants to think about the end. It is far away and a distant reality that you do not want to face. If you leave without covering your final expenses, the burden will fall to your family. Do you want to leave your grieving loved ones with a financial burden as well? If you decide to purchase insurance to cover this, there are a couple of options.
The first type of burial insurance is what the insurance industry calls a pre-need policy. Funeral homes sell this type of policy to people planning their own funerals. The person arranges for their funerals before they pass on. When they get the final expense total, they purchase that amount of insurance from the funeral home. The insured names the funeral home as their beneficiary. When they die, the funeral home handles the funeral services as pre-planned. They also receive the proceeds from the life insurance policy.
The second type of burial life insurance is almost the same as the first type. The only differences between the two are the funeral home does not sell this type of insurance and the beneficiary is not the funeral home. People take both types of policies out for amounts less than $25,000 to cover final expenses.
What does the second type give you that the first one does not? The second type gives you and your beneficiaries more discretion on how the money is spent. It also gives you the freedom of burial where you are living when you pass. As people grow older, they often move closer to children or family.
When looking at burial insurance, look at your current circumstances. That is the best way to make your own decision. Your circumstances may compel you to choose the funeral home option. If that is right for your circumstances, then that is the best option for you. However, know what you are purchasing before you sign anything. Make sure the paperwork is clear. Once you purchase any policy, inform your children or other beneficiaries of what is in place. That way, when the time comes, they are not surprised or confused.