What Does Funeral Insurance Entail?

Planning a funeral or any sort of end-of-life ceremony isn’t cheap.

Emotions are high when you’ve just lost a loved one, and choosing a funeral service planner and planning a funeral service are added pressures and financial burdens.

Thankfully, many funeral homes can provide packages that suit your budget and requirements, which can ease your purse strings. You also have the option of applying for insurance that covers all costs in the event of a funeral.

Funeral insurance is a secure financial cover that doesn’t require your family to pay for any funeral-related costs, allowing them to have some peace of mind during the tough ordeal of losing their loved one.

How does it work?

Application Process

The insurance provider you choose will have a range of insurance covers. Once you’ve selected a cover within your budget, you’re required to pay monthly or annual premiums to the company.

You must assign a trustworthy beneficiary who can claim the money in the event of your demise.

Insurance Process

In exchange for the paid premiums, the insurance company pays a set amount of money in the event of your passing according to the policy you’ve selected.

This way, the beneficiary appointed by you is eligible to claim the full amount as long as the policy is active during your demise.

Claiming process

When required, the appointed beneficiary can claim the money from the insurance company by submitting relevant proof.

Once the insurer does a thorough assessment, a lump-sum payment will be made to the beneficiary within 1-2 days.

What are the types of funeral insurance plans available?

Standard Insurance for Funerals

Most life insurance companies offer this type of plan. Payment is made to the beneficiary during the death of a loved one to pay for final arrangements such as:

  • Transportation
  • Burial plot costs
  • Funeral home services
  • Casket costs
  • Flowers, obituary notices, gravestones, and urn costs
  • Cremation costs

With this type of insurance plan, your beneficiary can use the funds for any payments that you were unable to make, such as mortgage payments, credit card debts, or medical bills.

Pre-Need Insurance for Funerals

This type of insurance plan is offered by your insurance company or some funeral homes. These funds, however, are given directly to the funeral home you or your family have chosen and not to a beneficiary.

Pre-need insurance is cost-effective as it provides a guard against inflation. This saves your loved ones from having to pocket money to cover any additional costs. Any remaining funds, however, won’t be given back to your family.

What are the types of insurance premiums?

For your selected plan to stay active, you’ll have to pay monthly premiums. The following premiums are for insurance plans that cover funeral costs:

  • Stepped premiums are calculated each year upon the renewal of the policy based on age, sex, and size of the death benefit. As you get older, the value of these factors increases
  • Leveled premiums have their rates locked in; as long as you pay there won’t be an increase. This type of premium is established using your age, sex, and the size of your policy
  • Capped premiums have a set monetary or age limit. Once you’ve reached the set limit, you’re eligible to keep the coverage and are no longer required to pay monthly premiums
  • Payout guarantee premiums are to ensure your beneficiary will be paid whichever total is the highest. It can either be the total amount of premiums paid or the original amount insured

How can you choose the right funeral insurance plan?

Consider the following factors when deciding to select an insurance plan that covers funeral costs:

  • Whether the insurance company of your choice has support services for your family
  • Whether you’re willing to take a medical exam which is mandatory when applying
  • What the average cost of a funeral is in your area
  • Whether you require a specific amount for funeral coverage

Select the ideal funeral insurance plan for you

Selecting the ideal funeral insurance plan that will cover all funeral expenses can be a tough process. Every policy may seem to have similar features. It’s important, however, to analyze the finer details of each policy as it can make a difference.

If you choose to apply for an insurance policy that covers funeral costs, make sure that you select a policy that supports the reason you’re insuring yourself.

Butler County Chamber of Commerce

Start typing and press Enter to search


Get the latest updates from Devlin Funeral Home: