Planning for the future is a smart financial move. As you prepare for retirement, remember to make funeral preparations. Since the average funeral costs over $7,000, you’ll want to save enough cash or pre-pay this inevitable expense. You could also purchase life insurance that covers your funeral costs.
Term Life Policies
Is a term life insurance policy part of your employee benefits or did you purchase a policy on your own? It only covers you for a set number of years. If you die before the term ends, the policy could be used to pay for your funeral. However, that’s not the case if the policy expires before you die. Relying on a term life policy to pay for your funeral is a risky move.
Whole Life Policies
A whole life insurance policy remains in effect for the duration of your life. As long as you pay the premiums, this type of life insurance doesn’t expire, end or mature until your death. Your beneficiary can use a whole life insurance policy to pay for your funeral. Also, if you purchase a whole life policy as a young person, it grows in cash value. Use that cash to pre-pay for your funeral today rather than wait until inflation raises the costs.
Talk to Your Beneficiary
Since the life insurance beneficiary decides how to spend the policy’s proceeds, talk with him or her before your death. Discuss your funeral wishes to ensure your life insurance funds are used for the funeral you want.
Pre-Plan Your Funeral
Despite your best intentions, your life insurance policy could be held in limbo for weeks, months or years. Consider pre-planning your funeral. Figure out if you can assign a portion of your life insurance policy to the funeral home to cover final expenses. Then discuss specific details about the service and interment and lock in today’s rates as you save money and relieve the burden on your survivors.
Life insurance certainly can pay for your funeral expenses. Just make sure you purchase an adequate policy today before you need it.