Funeral Insurance

Funeral insurance is purchased in order to fund pre-planned funeral arrangements. These policies are sold through funeral homes and other insurers. When the insured dies, the proceeds go directly to the funeral home. The consumer must pay, as the premium, either an average of the funeral expenses or the present-day cost of the funeral arrangements, depending on the insurance carrier. Funeral homes more often employ the present-day cost calculation on their policies.

Some insurers offer guaranteed policies, where for a higher premium, they guarantee that the funeral expense will not exceed the insurance benefits. Since this fixed cost arrangement is designed to protect the consumer from the increase in costs, the guaranteed policy is especially attractive.

Some policies increase in value over time. So the earlier the policy is purchased, the more the consumer stands to save. If you are not going to pursue a guaranteed policy, a policy which increases over time will provide some protection against rising costs.

Know Your Insurer

As with all important business transactions, it is important to know your insurer and read the policy carefully. This insurance is a long term investment and thus, the relationship with the insurance company must endure for years to come. You should be sure that you purchase with understanding and certainty.