It’s always good to be prepared. Finding a way to pay for your funeral expenses should be a key component of your financial plan. You can reduce the financial strain of funeral expenses on your family after your death through funeral insurance.
Funeral insurance serves as a valuable resource to support your family. It manages the expenses and obligations associated with your final arrangements. They include funeral and burial insurance coverage. It encompasses all your desired funeral and burial preferences. Having funeral insurance means your loved ones will know what you have wished for about end-of-life ceremonies.
Funeral plans should not be considered investment or retirement plans. Their sole purpose is to support expenses related to funerals and burials. These expenses include the cost of funeral services, coffins, flowers, burial plots, cremation, etc.
Read the blog to learn the basics of funeral insurance!
Funeral Insurance
Funeral insurance can be purchased to assist your loved ones and relatives in financing your funeral. It is a form of permanent life insurance that remains in effect for your life. If you make the payments on time. Burial insurance is unlike the traditional permanent life insurance policy, which financially supports your family in case of death.
Rather, it is designed to cover the costs related to your end-of-life arrangements. Consequently, burial insurance policies are not intended for individuals raising families. It is also not for those requiring insurance to meet larger financial responsibilities. Like, mortgage payments, children's college fees, and other expenses. In Canada, funeral expenses are estimated to range from $5,000 to $15,000. Your surviving family members will bear these costs if you do not have funeral insurance for seniors..
Marketing campaigns have a particular target for burial insurance. They often target seniors with restricted finances and poor health conditions. These individuals may not have savings or investments that could help with funeral costs. Yet, despite their circumstances, many seniors choose not to buy funeral insurance. Mainly because they believe they may not qualify due to their health condition.
Even so, these policies are easier to get as they do not need a medical examination. Even individuals with significant health issues might qualify for coverage. Although there might be a waiting period before the full benefits are accessible.
Funeral Insurance Types
There are two primary types of funeral insurance; burial and funeral insurance. They do not need a medical examination or have minimal health-related inquiries. Age and gender are the two factors that determine the premiums for these policies. Burial insurance is commonly offered as one of the following types of Whole Life Insurance:
1. Simplified Issue Life Insurance
This is suitable for individuals who cannot get traditional insurance coverage but do not have a critical health risk. A medical exam is not required. You will need to provide basic information about your health. The information is taken in the form of a few health-related questions. For instance, the application form might ask whether you live in a nursing home or have HIV. These policies involve underwriting but are generally more affordable than guaranteed issue funeral insurance.
2. Guaranteed Issue Life Insurance
Guaranteed issue life insurance ensures acceptance as long as you are below a certain age. There is no need for a medical exam or disclosure of health information. This type of insurance is ideal for individuals with severe medical conditions resulting in high premiums or being declined because of traditional or simplified issue policies.
Although acceptance is guaranteed, the payout for this type of policy is lower than simplified issue life insurance. Also, the premiums may still be higher than a standard policy.
It is worth emphasizing that funeral insurance policies commonly feature a graded death benefit. In case of the policyholder's passing within the initial two or three years after getting the policy, the beneficiaries receive a limited payout. This payout may encompass refunding the premiums paid, with some interest. A small percentage of the policy's coverage amount may also be paid.
But, it is important to note that accidental deaths are an exception to this graded benefit structure. Such deaths are often covered fully from the start of the policy, like death via a plane crash.
Funeral Insurance Benefits
There are several advantages of buying funeral insurance, such as:
1. Financial Help
Funeral insurance can cover huge funeral expenses. These expenses include costs for the casket, burial plot, funeral service, and transportation. The policy provides enough money to cover these costs. It also helps ease the financial burden on your family during an already difficult time.
2. Ease of Qualification
Funeral insurance policies are often easier to qualify than the standard insurance policies. They have simplified life insurance policy underwriting processes. This means you may be eligible for coverage even if you have pre-existing health conditions or are older.
3. Quick Payouts
Funeral insurance policies provide quick payouts to beneficiaries. This is mainly because funeral arrangements need to be made promptly. The funds can cover your immediate expenses. Moreover, it will allow your loved ones to focus on grieving and honoring your memory.
4. Flexibility
Funeral insurance policies offer flexibility in coverage amounts. It allows you to customize the policy to meet your specific needs. You can select a coverage level that aligns with the anticipated funeral expenses. It will adequately cover the costs associated with your final arrangements.
5. Final Expenses Coverage
Other than funeral costs, funeral insurance can also be used for other final expenses. These expenses may include medical bills, legal fees, or outstanding debts. This extra coverage will keep your family from inheriting these financial problems.
6. Peace of Mind
Knowing that your funeral expenses will be taken care of will bring peace of mind to you and your loved ones.
Conclusion
When considering funeral insurance in Canada, it is important to research different things. For instance, make sure to seek help from reliable insurance providers. Similarly, compare policy options thoroughly. Another important thing to do is understand the coverage’s terms and conditions. Also, consult a licensed insurance professional to get personalized guidance based on your specific needs and circumstances.