Preparing for the end can be a stressful process, especially when you or a loved one have to also pay for funeral proceedings. However, you can pay for a funeral in advance to relieve some of this stress and eliminate any financial burden moving forward. Funeral insurance is one way to help pay for your funeral, but another option is prepaying for your funeral.
In some cases, you may rely on life insurance to help cover the costs. Here’s the difference between funeral insurance and a prepaid funeral, and which is the better choice.
What Does Funeral Insurance Cover?
Funeral insurance, otherwise known as burial insurance or final expense insurance, works a lot like other protection plans. When a car breaks down, your insurance helps to cover the cost of repairs. Funeral insurance similarly helps cover the costs of your funeral.
Some types of burial insurance come with a death benefit of $5,000 to $25,000 for your family. This money can also help your family with other expenses when you’re gone. Like other forms of coverage, it requires weekly or monthly payments to maintain it.
Benefits may not get paid out until after the funeral expenses, and the beneficiary decides where the money goes.
What Is a Prepaid Funeral?
As opposed to funeral insurance, a prepaid funeral simply lets you pay for your funeral service in advance. Planning a prepaid funeral allows your family to eliminate some of the stress later on since you can do it together.
The average cost of a funeral is over $7,000. That includes the funeral service fee, renting the building, and much more. It helps to be able to put money towards the event in advance.
One of the major benefits of a prepaid funeral is that your family can allot as much or as little money as they want towards it. You don’t have to worry about premiums or getting benefits after the funeral.
Life insurance policies provide coverage for a family when the beneficiary dies. It’s meant to help in the sudden absence of an income.
Like funeral insurance, you pay a monthly premium to maintain it, and it pays out after you pass. The major difference is that standard life insurance has a much higher payout because it’s meant to help with more than funeral expenses. That includes bills like hospital and house payments.
However, life insurance premiums are also much higher than those you pay for funeral insurance. The type you purchase will depend on your budget.
Lowering Funeral Stress
No one wants to plan for after they’re dead and gone, but your family and loved ones will continue to live on. Paying for funeral insurance or planning a prepaid funeral can alleviate their stress and allow them the space to grieve.
USA Life Insurance Services offers burial insurance with locked-in rates and no medical exams required. Get your free online life insurance quote online or give us a call if you have any questions.