Should I Buy Funeral Insurance?
Funeral insurance is a type of insurance policy that will pay for the expenses associated with a policyholder’s funeral. Because the types of policies pay in the event of the policyholder’s death, many people who already have life insurance policies make the assumption that they do not have to have this coverage. Many people with life insurance policies and nearly everyone without any other type of life insurance coverage probably needs this type of insurance, however.
With an average funeral today costing a family around $7,500 and incidental expenses such as travel and hosting costing even more, it is becoming a more and more common scenario for families to quickly deplete the funds given out by a small life insurance policy. A policy that has a benefit of $100,000 for example, would lose about 10% of that money to pay for a funeral.
People who have no type of funeral or burial insurance will have to either leave enough in savings to pay for these costs or rely on friends and family members to pay them. In many cases, paying for a funeral is a major financial burden on the loved ones that a person leaves behind.
Of course, it is possible to select cheaper options for a person’s final costs. In fact, there are several options available to people to reduce their final costs. Many people decide to simply save money on their own for a small funeral and skip funeral insurance coverage.
It makes sense for each person to evaluate their own funeral insurance needs. A person with a young family might want to buy a small funeral insurance policy to cover their expenses and free up money for other expenses. As that family gets older, however, a burial insurance policy can ensure that young adult children are not faced with a large expense while they are starting off their financial lives. In other cases, however, this type of coverage may not be necessary because the estate will leave enough funds to pay for a funeral.