How to Pay For Funeral with Life Insurance Policy (2 Simple Steps)
First and foremost, when it comes to how to pay for funeral with life insurance policy life insurance is used all the time to pay for funeral expenses. This is why it is marketed under so many names like burial insurance, funeral insurance, cremation insurance, etc.
According to statista.com
In 2019 30% of policyholders used their coverage for burial expenses.
So to answer the question:
“Can you use a life insurance policy to pay for a funeral?”
Yes, you can, a life insurance policy will pay out a lump sum that can be used to cover the costs of a funeral.
This type of life insurance is known as whole life insurance.
In this article, we will cover everything you need to know about using a life insurance policy to pay for a funeral. We help seniors age 80, 70 and 60 find affordable coverage.
Table of contents
Does Life Insurance Pay For Your Funeral?
Yes, and the process is very simple. First, you need to qualify and purchase a whole life insurance policy you can begin that process by filling out the form to the right of this page to speak with one of our agents.
You can get coverage amounts of 25k, 15k, and 10k and more.
Our agents will also go over the process with you and educate you on how to use your life insurance to pay for a funeral. You can even name the funeral home as the beneficiary on your policy if wanted to. This would provide them with a quick payout that would cover your funeral and protect your family from the burden of your funeral expenses.
Furthermore, it is important to do your pre-planning effectively when you are looking at a policy you want to select a face amount that matches your funeral planning.
If you want a burial that will cost $12,000 you would want a life insurance policy that is $12,000 on the face amount. You would also want to include any other end-of-life expenses to provide that extra cushion for your family.
The most affordable options would be cremation or green burials. These range between $1,000 to $5,000 so you would want a policy with a face amount that matches the pricing for these types of funerals.
As long as the face amount of your policy matches the burial you are planning the whole cost of your funeral will be covered.
How Does Life Insurance Work with Funeral Expenses?
Above all, life insurance works with funeral expenses by providing a death benefit to your named beneficiary. This can be anyone in your family or an entity like a funeral home or your estate.
If you select a family member as your beneficiary it would have to be the person you know is going to take care of your final wishes when you die. This can be a son, daughter, spouse, sister, brother, cousin, father, or mother. Your beneficiary will receive the insurance payout at the time of your death in the form of a check that they would then use to pay the funeral director.
Furthermore, they can also use the insurance to cover any leftover expenses such as unpaid medical bills or debts left behind when a loved one dies.
Selecting a Funeral Home as Beneficiary
If you know ahead of time exactly what funeral home is going to be conducting your funeral then you can put them down as the beneficiary for your policy. This means when you die the funeral home will receive a check directly from the life insurance company and they will use these funds to pay for your funeral.
Selecting Multiple Beneficiaries
We recommend having a couple of different beneficiaries on your policy in case a family member passes away or the funeral home you were planning on using suddenly goes out of business. It is always important to have a backup beneficiary in these cases.
Furthermore, you can put down up to 5 different beneficiaries typically on one policy. Put some thought into who your beneficiaries should be.
Average Cost of Funeral Services
The average cost of a funeral varies from state to state.
The national average for a burial typically ranges between about $8,000 to $12,000. With the cost of inflation added into this, funerals will be upwards of $15,000 in the coming years. This is what our agents will go over with you at the time of your application. You also want to factor in other end-of-life expenses you will wind up leaving behind for your family to take care of.
Cremation is a much more affordable alternative to look at when it comes to funeral costs. This alternative typically can range between about $3,000 to $5,000. Inflation is still a factor in the coming years cremations can be upwards of $8,000 or more.
This is why planning ahead is so crucial when the future can be so uncertain. The first step you can take is to visit your local funeral home and ask them for a price list of all the services they will have available. Select the pricing and funeral services that best suit you and write them down on a piece of paper.
Once you have the full cost of your funeral expenses add in $5,000 to adjust for inflation and that will be the figure for the amount of life insurance to purchase.
Quick Tip: If you already know how much coverage you need fill out the form to your right to speak with one of our agents and purchase a policy.
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Our goal is to help you make an informed decision to protect your family from any financial burden so they will have the peace of mind they deserve.
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