Consider-your-options-for-end-of-life-arrangements-with-financial-products-and-services
19 February 2021,
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Consider-your-options-for-end-of-life-arrangements-with-financial-products-and-services

The loss of a loved one is a painful and difficult experience. It gets even harder when you need to make crucial decisions during a time of grief.

Making funeral arrangements and worrying about their costs is an added burden that is difficult to carry. This is why we must try to make it easier for our loved ones to cope with our passing.

Today, we have a number of ways to reduce this burden on our loved ones. We can pay for funeral expenses in advance with prepaid funeral plans. We can also get a final expenses insurance policy.

Before you decide, it is best to understand the differences between these two and make the right choice.

Read on to check the features and prices for funeral plans and final expenses insurance.

You can also start requesting FREE and NO OBLIGATION quotes using our short online form to find the best choice for you.

Final expenses: Why should we plan for them?

Plan-for-final-expenses-with-final-expense-insurance

Unfortunately, bills don’t stop coming after death. There are certain expenses, final expenses, that a deceased would be billed for such as:

  • Medical bills
  • Credit card bills
  • Loans
  • Mortgage
  • Taxes
  • Funeral expenses
  • Burial expenses

Planning for final expenses ahead of time is smart and will save your family a lot of money and stress during an emotional time.

If you have life insurance and don’t want the insurance benefits to go to paying your final bills, you should start considering your options.

You have options available to help you plan your final expenses. In this article, we will cover pre-paid funeral plans and funeral insurance or final expense insurance.

What are prepaid funeral plans?

Pre-paid-funeral-plans-offered-by-funeral-homes

Prepaid funeral plans give you the option to choose between a funeral or cremation and to select other products or services you want. This relieves your loved ones the burden of making decisions for a funeral and to follow any specific instructions you want.

Funeral plans allow you to pay for these arrangements in installment over a specific period of time based on your budget.

Typical options included in a funeral plan are:

  • Cremation or burial
  • Urn or casket
  • Funeral Service
  • Flowers and music
  • Venue
  • Special requests: catering, souvenirs, etc.

As you plan end-of-life arrangements, you get peace of mind for you and your family. You are assured that your final arrangements will be as you wish and that you won’t be leaving a burden to your loved ones

The cost of pre-paid funeral plans

Based on data from the National Funeral Directors Association, the median price for burial service with viewing amounts to $7,640 in 2019. This does not include additional costs for the cemetery.

For cremation, the median cost is around $5,150 (with funeral and viewing). To include a casket and urn, the cost can run to about $6,645.

While the amounts may not seem staggering, keep in mind that prices do increase every year. When a family is in mourning, even this amount may not be easy to come by.

With a prepaid funeral plan, you can choose the services you want at current prices to protect your finances from inflation. When you have signed a contract, the funeral home will put your payments in trust for security. Payments can be for a specific term – 5 or 10 years- so you can pay based on your budget.

The pros and cons of pre-paid funeral plans

Buying-a-funeral-plan-involves-choosing-funeral-services-and-products-in-advance

At this point, you may be thinking, is a prepaid funeral plan a good idea? The answer is yes and no.

The idea of getting ready for one’s funeral seems morbid for many people. But in reality, this is something that must be considered to make sure that surviving family members don’t need to argue over such decisions or even do things you don’t want.

It is a practical step for those who don’t want to leave behind a mess for their families to deal with. After all, nobody really wants to sit down and discuss among family members what casket to choose, burial or cremation, what flowers or music to arrange, etc. Instead, you can do it quietly and discreetly so that when the time comes, everything is in place.

Weighing these factors can help you make a good decision for you and your loved ones.

 

The pros of Prepaid Funeral PlansThe cons of Prepaid Funeral Plans
Paid to a funeral homeMay not be transferable to another funeral home
Protection from inflationTies up your funds over time
Convenient payment termsCan be used only as specified (funeral or burial)
Relieves your loved ones from financial worries about end-of-life arrangementsSome expenses not included
Prevents arguments over funeral arrangements among family members of a deceased 

Being able to freeze funeral costs is basically the main advantage of taking out a prepaid funeral plan. It also offers the added convenience of planning all the services you want in advance to remove the burden from your loved ones.

Funeral costs keep spiraling year after year, with no sign of slowing down. It can be a significant expense to leave behind for your family to worry about.

Consider your options for setting aside funds for end-of-life arrangements using our short online form and receive FREE and NO COMMITMENT quotes.

Things to know about pre-paid funeral plans

Ask-the-right-questions-before-choosing-a-pre-paid-funeral-plan
To set up a pre-paid funeral plan, you need to choose the funeral home you wish to work with and select the arrangements you want. The price of your funeral plan can be paid for all at once or by installment over time.
 
Some pre-paid funeral plans may be guaranteed (meaning any future increase in price will not be paid for by your loved ones) or non-guaranteed (the family will pay for the difference in price).
 
Since pre-paid funeral plans are purchased through a funeral home, the plan covers services that the company charges. The company determines the price and the cost can vary from one funeral home to the next.
 
When you are choosing a pre-paid funeral plan, it is essential to ask these questions:
  • What happens if the funeral home goes out of business?
  • What specific services are included?
  • What are the miscellaneous or additional charges?
  • Is the funeral cost guaranteed or non-guaranteed?
  • Can the plan be canceled? Will payments made be refunded?

 

Funeral insurance for final expenses

Save-for-funeral-expenses-with-final-expense-insurance
Not everyone wants to plan their own funeral. They don’t want to have to choose a casket, music, flowers, or venue.
 
For some people, this is something they want a spouse or their children to do. In fact, many people don’t want to think about it at all.
 
This is fine as long as you know, at least, where the cost for your funeral will come from. You don’t want your family to be scrambling for cash when they are supposed to be in mourning.
 
If you are not enthusiastic about making funeral arrangements, you can make sure your loved ones won’t face financial problems for your final arrangements with a burial insurance policy.
 
Unlike prepaid funeral plans, burial insurance is issued by a life insurance company and is paid directly to beneficiaries. It does not include any specific or detailed funeral services plan.
 
Burial insurance or funeral insurance is final expense insurance. These polices are like regular term life insurance with monthly premiums that pay out a specific insured amount when the insured dies.
 
As they are meant to pay for burial expenses, the insured amount is lower than the regular term life insurance policies. They tend to be more expensive than traditional term life insurance because people buy them when they are older and not in the best of health.
 
Beneficiaries have the discretion to decide on how the money will be spent

The Pros and Cons of funeral insurance

For those who don’t want to make detailed arrangements about their funeral but wish to ensure that money is set aside to pay for funeral costs, a funeral or burial insurance policy is the answer.

Burial insurance or funeral insurance is final expense insurance. These polices are like regular term life insurance with monthly premiums that pay out a specific insured amount when the insured dies.

This type of policy is generally designed for older adults who need an insurance policy for end-of-life expenses. If you don’t have enough insurance to cover funeral costs but don’t qualify for term life insurance, funeral insurance may be your best option.

It can be a last resort for people who want to set aside money for burial expenses but don’t have enough life insurance.

More flexibility and peace of mind

Typically, final expense insurance is from $5,000 to $25,000, depending on the amount you need for end-of-life arrangements. For as long as premiums are paid, the insured amount is given to the designated beneficiary when the insured dies, for the purpose of burial expenses.

Because final expense insurance is not connected to a specific funeral home, you never have to worry that a funeral home will close or get sold. You will also not be locked into a particular plan or location, giving your loved ones more flexibility when the time comes.

It is worth noting that most burial or funeral insurance plans won’t pay out the benefit in time to settle funeral home expenses. In most cases, the family will need to pay for the expenses and get reimbursed at a later date.

The pros of Prepaid Funeral PlansThe cons of final expense insurance
Issued by life insurance companies regulated by the government 
Easier to apply forSome insurers offer no-medical exam policies
Level premiums for lifeMore expensive than regular life insurance for the same amount of benefits
Paid to a beneficiary in cashDoes not cover inflation
Can be used for end-of-life expenses or other final expensesLower insured amount
More flexible than pre-paid funeral plansInsured amount may not be paid in time to pay a funeral home

Help your family navigate the complexities and difficulties of losing a beloved family member with a good funeral insurance policy.

What are the funeral costs that must be considered?

Expenses related to a funeral may have several categories.

Below you will find an estimate as your guide. Keep in mind, however, that this can also change depending on the personal wishes of family members and the location.

  • Funeral home services: $2,000
  • Body preparation/make-up: $1,000
  • Chapel and related services: $300
  • Coffin: $1,600 to $2,300
  • Funeral Salon (for 2 days): $500
  • Pall bearers: $200 to $300
  • Funeral transport: $300
  • Professional services: $400 to $600
  • Hearse: $200 to $400
  • Limousine: $200 to $300
  • Transport of Flowers: $150 to $200
  • Grave marker: $400
  • Average cost of funeral with viewing: $7,000

Other miscellaneous expenses can be added, depending on arrangements requested by the family. In Canada, a decent funeral can easily cost around $10,000.

Now that you know the pros and cons of funeral plans and funeral insurance, you can weigh your options and make a sound decision.

To start comparing your choices, you can request free and no-obligation quotes using our short online form below!

Funeral insurance: Who is it best for?

Financial-freedom-for-you-and-your-loved-ones

Because this type of policy focuses on paying for end-of-life expenses, it is best for seniors. They are affordable, easier to apply for, and simple to understand.

Most seniors who buy funeral insurance have life insurance but they want additional insurance benefits specifically for their burial expenses.

So, while life insurance is a gift that you give to your loved ones, funeral insurance is a purchase for yourself to make sure your final arrangements are all set.

If you are already wealthy and leaving a significant amount to your loved ones when you pass, you may not need final expense insurance.

But if you are unprepared or worried about leaving substantial expenses if you die suddenly, taking out a funeral insurance policy can help.

Individuals aged 85 and above or those with a terminal illness like AIDS or cancer may not qualify.

To keep premiums low, it is best to apply for a funeral insurance policy as early as possible.

How much final expense insurance is needed in Canada?

The-cost-of-final-expenses-depend-on-choices-you-make-such-as-burial-or-cremation

Many variables affect the cost of a funeral; casket or urn, flowers, viewing, type of service, etc. To determine how much funeral insurance is needed, it is best to have a general idea of what you expect and select the right coverage.

The most expensive cost is the interment of the remains which is why many Canadians choose cremation. The price for cremation typically runs from $1,500 to $5,000. Burials are significantly more expensive, with a standard casket costing about $3,800 without flowers or services. A simple ceremony could cost as high as $9,000 while a high-end service would bill for $15,000.

In the end, you can get final expense insurance based on what you want. For cremation, a policy of $5,000 may suffice while for burials, it is best to have at least $10,000 for funeral insurance.

Frequently asked questions about funeral insurance

Research-and-compare-plans-before-choosing-a-funeral-insurance-policy

Before you decide on your funeral insurance policy, it pays to know important facts about its benefits, terms, prices, etc. We present below some frequently asked questions about funeral insurance to help you determine your best options.

When you need to check on the lowest rates for funeral insurance, feel free to fill out our form and ask for no-obligation quotes!

Is funeral insurance connected with a specific funeral home?

No, funeral insurance is from a life insurance company that pays the beneficiaries the insured amount to be used as they see fit. The money can be used to settle the final expenses of the insured person.

Is funeral insurance and burial insurance the same?

Yes, funeral insurance and burial insurance are the same. They are also known by another name – final expense insurance.

Is funeral insurance and pre-paid funeral plans the same?

No, funeral insurance is insured with an insurance company that pays beneficiaries an insured amount at the death of the insured. A pre-paid funeral plan is issued by a funeral home that accepts advance installment payments for a specific set of funeral services.

Who should buy a final expense insurance policy?

Any adult can buy a final expense insurance policy. It is the same as term life insurance which you can buy to pay for expenses after death. The main difference is that when you buy term life insurance at a younger age, you can get a higher insured amount at a lower price. Seniors looking for additional insurance at age 68, 70, or above may no longer qualify for regular term life insurance but can purchase final expense insurance for a limited amount and at a higher premium.

Final expense insurance is recommended for individuals who want to set aside funds for end-of-life expenses. They are, however, mostly used by seniors or older adults who have difficulties in getting life insurance due to health reasons.

Is medical examination required for final expense insurance?

Like other types of life insurance, the insurance company will have an application process. Policies with medical examination are cheaper than those without medical examination. Some insurers don’t even require a health questionnaire but expect the premium to be more expensive.

What is the maximum age for final expense insurance?

It depends on the insurance company. Many insurers cap the age for final expense insurance at 75. Y

How fast do insurers pay the benefits for final expense insurance?

Again, this depends on the insurance company. It could, on average, take weeks to receive the benefits.

What is the average price for final expense insurance?

It is difficult to give an average price for final expense insurance because the rates vary significantly based on the insured amount, age of the insured, sex, health, and choice of insurance company. To give you an idea, a senior may pay from $50 to $60 for a $10,000 to $20,000 funeral insurance policy.

Is final expense insurance more expensive for smokers?

Any type of life insurance is more expensive for smokers, including final expense insurance. If you are a smoker, your premiums will be at least 30% higher than non-smokers.

What is the difference between funeral insurance and life insurance?

Funeral insurance has a smaller insured amount compared to regular life insurance policies. They are usually focused on paying for end-of-life expenses whereas most life insurance policies primarily consider income replacement.

How much should I get for funeral insurance?

The amount recommended for funeral insurance depends on you. It is best to get an idea of how much a funeral will cost in your area and what type of service you would want. It is best to anticipate inflation and to make sure you get an adequate amount. Currently, the average price of a funeral in Canada is from $7,000 to $10,000.

Where should I get funeral insurance?

Funeral insurance, or final expense insurance, is offered by many reputable insurers in the country. The best way to know which insurance company to choose is to compare their rates and features using our short online form.

Compare to find the best final expense insurance

Final expense insurance is important to make sure that end-of-life expenses are set aside in advance.

Many people focus on cost as the #1 factor when choosing their insurance policy. It is not, however, the only important factor. You also need to look at what expenses you could leave behind and what they will cost your loved ones.

There are many final expense insurance plans available but which one is best for you?

Some final expense insurance policies may work out better for you than others in terms of price and services. For instance, some companies that specialize in funeral insurance offer assistance in handling final arrangements while others don’t.

If you are 50 or older and want to set money aside for funeral and final expenses but don’t want to pay for an expense policy, check out final expense insurance.

Fill out the form below to request FREE and NO-OBLIGATION quotes from our partner insurers!

With a good final expense insurance policy, you will get PEACE OF MIND and save your family from financial worries and stress.

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