Elderly people are actively looking for options to plan the funeral-related expenses in advance. This article provides an analysis of the pros and cons of final expense plans helping people make a smarter choice for themselves.
Leaving an additional financial burden on the loved ones isn’t something one would wish for. However, the family has to suffer arranging a funeral if the deceased loved one had forgotten to plan the expenses. Final expense plans are providing the opportunity to plan funeral expenses in advance so that the loved ones won’t have to worry about the same. Different providers are showing up with plans made for different funeral requirements. Let’s have a look at the coverage, costs as well as advantages and disadvantages of these plans.
The offered plans are designed to arrange the funeral after the sad demise of an insured. This may cover the costs of a cemetery plot, an urn, headstone or another container to carry the remains after cremation. Insurance providers offer a wake ceremony after the funeral as well and can be availed at an increased monthly premium. However, they don’t provide a cover for medical bills, hospice care or any other expenses. Like life insurance, these plans pay after the death of policyholder but coverage amount is much lesser in funeral plans.
Mostly, insurers provide the coverage amount to the beneficiary to help them arrange the funeral for the deceased. However, they are not obligated to spend the money on any specific cause and can utilize the same in their desired way. Policy buyers are suggested to choose their beneficiary wisely. They should name their spouse or a trustworthy loved one who will use funds for their right purpose.
On average, a traditional funeral cost around $8,000 to $10,000 and this does not include the cost of the burial vault. But some may need more products or services to arrange the funeral as per their wish. This may include a customized burial casket, flowers, and services such as transportation of the body or the memorial ceremony. Sometimes, the family has to wait for the loves ones coming from a distant place and they had to embalm the body for the same. The insurance buyer needs to take care of these expenses whenever requesting final expense quotes. There are providers offering a cover ranging from $5,000 to $30,000 and interested buyers can get the help of online experts to determine the right coverage for a plan.
Having a dedicated funeral insurance makes sure that the insured will receive the desired farewell, without any hassle. There are life insurance plans that provide a cover for funeral expenses too but those plans are very expensive. Moreover, applicants need to undergo a medical examination and they might be denied a plan if they are diagnosed with a serious illness. Funeral plan providers don’t inquire about the health status of applicants and almost everyone can get a plan.
Sometimes, people forget to buy a plan during their employment and realize its importance later. Those people can still have an option to buy a plan immediately buying requesting a quote online. These plans are known as immediate burial insurance and interested buyers can buy them by making a lump sum payment.
People having a life insurance can also consider buying a cheap final expense plan to manage burial expenses. Under these cases, the funeral cover is utilized for burial expenses and the beneficiary can utilize death benefits for major financial responsibilities such as paying medical bills and repaying pending debts.
Many providers offer a funeral plan with a waiting period of 2 years that means the insured can receive full benefits. Mostly, for the deaths in the first year, insurers take care of 30 percent of total funeral expenses and pay 70 percent of the same in the insured passes away in the second year.
Also, the amount paid in premiums grow at a lower interest rate and doesn’t help accumulate a big amount. At times, insurers provide just 1 to 3 percent return on paying premiums for around 30 years people planning to cash the amount later in the future are suggested to look for some other options.