With 91% of Americans citing funeral and burial expenses as a top reason for securing a life insurance policy, there are quite a few options to consider when planning for these type of costs. From custom final expense life insurance to a pre-paid funeral, you might be overwhelmed and not know where to begin. At the end of this blog, you'll understand the most common options for covering funeral or end-of-life expenses, that way you can feel confident about whatever plan you choose.
A popular option for many is to pay for a funeral in advance through a local funeral home. Prepaid funeral plans are a set of arrangements specified by you, with a funeral home of your choice that has been paid for ahead of time. Traditional funeral arrangements range from $8,000 to $10,000 and considering the average cost of a casket is $2,000 to $5,000, your plan may need to extend beyond that depending on what you're looking for. This type of plan can save your loved ones from the burden of having to make the hard end-of-life decisions that come with planning a funeral and may also provide you a sense of agency in a process that can be emotionally daunting. However, state laws regarding prepaid funeral contracts vary, and some states offer little to no protection for consumers in certain situations; for example, the funeral home going out of business. With a prepaid funeral, there is not much flexibility when it comes to transferring your plans. If you enter into a contract with a particular funeral home and end up moving, your plan is unlikely to transfer, leaving you with less flexibility when preparing your end-of-life expenses.
Accidental death insurance
Another common option is an accidental death life insurance policy. This type of policy can be purchased as a rider that is connected to a life insurance policy already in place or as a stand alone policy. These policies only pay out when the policyholder passes away due to a accident covered within the policy they purchased. This means if you are the victim of a car or plane crash, your accidental death policy may provide your family with a benefit. Those who have careers in an industrial field or construction might find an accidental death policy the best option due to the nature of their jobs. However, if you pass away due to an unexpected illness the policy does not pay out. In 2017, the CDC reported that the top two causes of death in the United States were heart disease and cancer. Deaths due to an accident were third and consisted of 6% of the total. If you decide to purchase a stand alone policy, it may also be beneficial to purchase an additional life insurance policy, such as a final expense life insurance, as the likelihood of passing due to an accident is lower than that of an illness.
Term life insurance
Term life insurance might be the option you’re most familiar with. This type of life insurance guarantees a payout of benefits during the specified term outlined in the policy. Typically this type of policy is renewable at the end of your 10, 20, or 30 year term, but at an increased rate. Premiums typically increase as you get older and many insurers will not issue a policy after a certain age. If you are considering a term policy make sure to talk with your agent about expiration dates and age restrictions! While the coverage amounts of term life insurance policies are typically higher, a final expense policy may be a more affordable option for those seeking to cover some overall end-of-life expenses.
A term life insurance policy can be a great option for those looking to secure their family’s financial future. Term life insurance can be a less complicated and more affordable option than whole life insurance. If you are interested in a term life insurance policy, our sister brand, Our Life Covered offers affordable term life insurance policies tailored towards women and their families. While the coverage amounts of term life insurance policies are typically higher, a final expense policy may be a more affordable option for those seeking to cover some overall end-of-life expenses.
Whole life insurance
Whole life insurance is a type of permanent life insurance that includes a guaranteed death benefit and a cash value component. The upside to whole life insurance is that, as long as your premiums are paid, the coverage lasts your whole life. Another upside is that your monthly premiums are typically fixed and should not increase over time. A traditional whole life policy is usually more expensive than a term life policy, so a final expense policy, a type of whole life insurance, might be a better option for those looking to specifically cover end-of-life expenses because the coverage amount is less and therefore can be less costly than other traditional while life policies.
Final expense whole life insurance
Final expense whole life insurance is a type of whole life insurance that provides your chosen beneficiaries with a benefit at the time of death to help cover end-of-life expenses. A funeral or memorial service is one of the biggest end-of-life expenses a family might face. In fact, the median cost for a funeral in 2017 was $8,755. These kinds of expenses can be an unexpected, out-of-pocket burden that your loved ones are not able to cover. In addition, there are no restrictions on how the benefit is spent, so the benefit proceeds with final expense life insurance can help pay for the cost of funeral, cremation, or anything your beneficiaries see fit.
The potential of final expense life insurance with Final Wishes Covered
These are just a few of the many options to research when deciding how to cover your end-of-life expenses. If you are looking for more information about final expense life insurance, head to our FAQ page or our final expense insurance explained blog post. Final expense life insurance can be there when you and your family need it most - whether it's to help with costly funeral bills or pay off outstanding debt. By working with Oxford Life Insurance Company, you can feel more secure with your policy knowing it’s backed by a company that’s been protecting families like yours for over 50 years.
No matter what option you end up connecting to most deeply, final expense life insurance with Final Wishes Covered may be able to help cover the costs associated with your end-of-life planning, and that increased peace of mind is a wonderful gift to give your loved ones. Visit finalwishescovered.com today to get a free quote in seconds or call 888-432-7066 to talk with one of our in-house, non-commissioned life insurance agents about which plan may be the best fit for you.