Did you know that the life insurance market grew by 2.9 percent between 2017 and 2022? Research shows that the industry grew faster than the economy within that period.
Life insurance varies from term to permanent policies. Term insurance policies provide coverage for a specified period. Permanent policies such as a whole life policy provide coverage till death.
Preneed insurance is a type of permanent life policy. Planning to cover funeral-associated costs prevents leaving your family and friends financially drained.
High funeral costs and other burial-related costs have made preneed insurance necessary. Read on to educate yourself about a preneed insurance policy.
What Is Preneed insurance?
This policy mandates the funeral home to take care of your burial arrangements in case of death. It covers funeral services that the policyholder had chosen in advance.
The insurance could cover the cost of the casket, cemetery cost, service providers, and so on. Also known as burial insurance, your employer can offer preneed insurance.
Where and How to Buy a Preneed Insurance Policy
Licensed funeral homes and some regular insurance companies sell preneed insurance policies. The insurer may require you to fill out a form answering a few health questions before buying the policy.
You can also buy burial insurance online through insurance brokers. After purchasing the policy, it’s important to inform whoever will be handling the burial arrangements.
The cost of the policy has factors that influence it. These include age, gender, income size, the policyholder’s health, and others. It can also be significantly influenced by the type of arrangements you choose.
Preneed Insurance Beneficiary
A life insurance beneficiary is a person named in an insurance policy as the receiver of death benefits in case of death. The beneficiary of this type of policy is the funeral home. Unlike funeral expense insurance, the death benefits are not paid to your family.
Final expense insurance can pay death benefits to the funeral home. Any money that remains after the burial has been serviced goes to the deceased family.
The Pros and Cons of Preneed Insurance
One of the major benefits of getting this policy is that others don’t have to plan for your funeral services. It reduces the burden on family and friends. You also choose an affordable price and select services for yourself.
Cons to this policy include funeral homes adding unexpected charges and scamming people. Changing or transferring your plans to other service providers is also impossible.
Burial Insurance for Seniors
Burial insurance covers a person or an entire family. Unlike preneed insurance, the beneficiary is the person chosen by the policyholder.
Burial insurance with no waiting period allows the beneficiary to benefit almost immediately. They can get the death benefits after payment of the first premium.
Burial insurance for seniors suits people aged 50 to 85 years. Most insurers avoid giving seniors this coverage because of the short period of premiums contribution.
Seniors can still get burial insurance even after 10 years of retirement. Contact us to learn more about burial insurance for seniors.