choose a pre-need, burial, final expense, or other full life insurance plan to cover funeral costs

What Kind of Funeral Insurance Do I Need?

You can choose a pre-need, burial, final expense, or other full life insurance plan to cover funeral expenses. Of these options, only the pre-need and burial plans are considered strictly “funeral insurance”—the rest also function as a typical life insurance policy.

Each option has its pros and cons, and, depending on your personal needs and insurance goals, it may or may not work for you. That’s why we have broken down each of your options—to help you determine what kind of funeral insurance you need.

What Is Pre-Need Funeral Insurance?

Pre-need is the most direct funeral insurance option on this list. Rather than purchasing the plan through an insurance company, you buy it from a funeral home itself. 

These policies are very small, and are only intended to cover funeral expenses. On average, funerals cost between $4-7,000, and pre-need policies generally run from $2,000 to more than $10,000, depending on your chosen arrangements.

There are typically little to no restrictions to pre-need plans. In other words, you may qualify regardless of your health, age, or other factors that would likely disqualify you from other plans. 

You also have the option to pay for the entire plan upfront, or may monthly premium payments on it if you so choose. Other plans are too large or do not allow you to pay full upfront.

However, these plans are much more limited than your other options. The total payout—i.e., the amount of money given upon the policyholder’s death—must go to the funeral home. If you must make changes to your arrangements that lower the overall cost, you will not get it back.

Alternatively, if one of your arrangements becomes unavailable and is swapped for a more expensive alternative, you will not have to pay the difference. There are, then, pros and cons to this feature. 

And, if you or your family decide that you want to use the funds put towards your pre-need plan elsewhere, you will be stuck—pre-need insurance is non-transferable. 

Overall, pre-need insurance is great for those who want to know exactly what they’re getting for a low cost. All funeral arrangements are made in advance, relieving the policyholders’ loved ones both mentally and financially. But, if you’re looking for a more flexible or a larger plan, you may instead consider burial insurance.

Burial Funeral Insurance

Burial insurance is similar to pre-need in that they both cover funeral costs. While pre-need plans are directly purchased from a funeral home, burial plans are purchased from an insurance company.

Generally, these plans are larger and offer more options than pre-need. Policies can pay out as much as $25,000 and can be put towards funeral arrangements and other final expenses. 

You’re not stuck, then, with any arrangements or funeral homes like you would be with a pre-need plan. And, your payout is not required to go directly to the funeral home—the funds will instead go to a designated beneficiary, who can choose to pay the funeral fees and/or other costs such as mortgages, medical bills, etc.

Burial plans are still, however, significantly smaller than other life insurance policies. So, if you’re looking for a larger payout, this plan may not be the right option for you.

However, it’s less expensive than the other options while still providing a larger death benefit with more options than a pre-need plan. It’s overall, then, a middle-of-the-road, inexpensive funeral insurance option.

Does Final Expense Insurance Cover Funeral Costs?

Final expense insurance offers a larger payout than burial insurance. Depending on if you choose a Guaranteed Issue or Simplified Issue plan, your payout can be as high as $25,000 or $40,000.

One of the best features of final expense is it’s easy-to-meet qualifications. Unlike the more extensive policy options (whole and term life), you do not have to undergo a medical exam for enrollment. 

If you choose a simplified issue plan, you’ll only be asked to answer simple, current health questions. Passing this questionnaire means that you’ll be able to set your payout as high as that $40,000 mentioned earlier.

If you have serious health concerns that disqualify you from the other plans on this list, you’ll want to consider a guaranteed issue plan. There’s no questionnaire for this plan. Your premium will be higher than other plans (assuming the risk of supposed medical issues) with a smaller payout (maximum $25,000). Still, it’s one of the only options for those in tough circumstances.

If you/the beneficiary chooses to do so, the death benefit can be used to cover the funeral cost as well. For a life insurance plan that can cover a lot more than just the funeral, then you may want to consider a final expense policy.

Whole Life Insurance Funeral Coverage

Whole life insurance policies are the most extensive of the options on this list. Whole life plans have huge payouts, ranging more than $100,000 depending on your finances and goals for the plan.

Unlike the other options, whole life has a savings aspect, in which your premiums can earn you more money over time. And, of course, this death benefit can go towards funeral costs if you so choose. These plans, however, are meant to be enrolled in early on and are not a feasible option for many seeking funeral insurance.

So, if you’re a bit younger and in good health, this plan may be the best option for you.

Get Funeral Insurance Advice From Experts You Can Trust

Don’t let this information go to waste. Now that you understand your funeral insurance options, it’s time to take the next step—but signing up for an insurance plan is scary. 

With Senior Life Services, you don’t have to worry. Our licensed professionals will work with you directly to provide a fast and free quote on outstanding coverage. So, when you’re ready to begin, give us a call at (800) 548-3249!


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