One important component of financial planning involves accounting for end-of-life expenses, and seniors hoping to spare their families from unexpected financial hardship would do well to prepare for these costs. Funeral insurance (also called final expense insurance) is a form of life insurance to cover funeral and burial costs. Funeral insurance for seniors can be a practical option for achieving peace of mind for both themselves and their families.

What is Funeral Insurance?

Funeral insurance is a type of permanent life insurance that covers funeral and burial costs. Funeral insurance typically provides simple underwriting unlike traditional life insurance policies which can take months with extensive medical underwriting. That leads to many seniors being able to obtain coverage without a medical exam. These payouts help pay for a variety of expenses, including funeral services, burial or cremation, and any outstanding bills.

Types of Funeral Insurance

Funeral insurance is available primarily in two types of policy for seniors:

This includes: Pre-need Funeral Insurance: This is purchased through a funeral home and will only pay towards goods and services prepared by that particular funeral home. With this planning, the policyholder chooses the services and products they desire and pays for at your door services periodically over time.

Final Expense Insurance: a more flexible option, the policy pays a death benefit to beneficiary who can use the money for whatever they need to take care of for funeral expenses. This is usually sold through an insurance company and not a funeral home.

Cost of Funeral Insurance

Funeral insurance varies in cost according to the policyholder's age, insurance provider, and the level of cover required. For $10,000 of coverage1, seniors should expect to pay on average $30 to $70 dollars a month for a policy. Comparing policies and providers is the best way to identify the optimal rate and amount of coverage.

The advantages of funeral insurance for senior citizens

There are various advantages of funeral insurance, especially for older individuals. This kind of insurance helps to financially protect families from high funeral costs: $7,000 to $12,000 nationally 2. These policies also usually have fixed premiums (meaning that your premium will not go up over the term of the policy), providing clear budget for our seniors. Later on, because of the simplified underwriting process, seniors dealing with a pre-existing well being problem can often qualify for protection.

Choosing the Right Policy

There are a handful of things seniors should consider when choosing a funeral insurance policy. Evaluating the financial soundness and reputation of the insurance company is absolutely essential. Checking the company through consumer reviews and ratings is one step to find out if this company is good or not. Furthermore, seniors may need to decide if a pre-need policy or final expense is better for their situation. Getting expert advice from an insurance broker or a financial advisor will help as well.

Real-World Scenarios and Points to Consider

Take the example of Jane, a 75 year old retiree when she sought help so that her funeral costs were not passed onto her family. After considering several alternatives, Jane decided on a $15,000 death benefit final expense insurance policy. That policy only cost her $50 a month, something that was easy to find in her fixed income. This allowed Jane to plan her funeral the way she wanted it, knowing her family wouldn't have to stress about the cost.

References

Insurance. com: Final Expense Insurance

National Funeral Directors Association — Statistics

In conclusion, funeral insurance is a great option for seniors who want to relieve their children from the financial burden. This allows seniors to assess the kinds of policies out there, what costs to evaluate, and how to determine their personal needs in seeking end-of-life expense coverage. Such thoughtful advance planning not only gifts peace of mind but also pays tribute to the movement they hope to leave behind.