![Burial Insurance Pro 2024 & Funeral Insurance Plans [No Waiting Periods]](https://burialinsurancepro.org/wp-content/uploads/2017/01/burial-insurance-pro-logo.png){kind=logo}
Menu
Pre-Need Life Insurance: Everything You Need To Know
By burial pro
Pre-need insurance is a type of life insurance policy that provides a way for individuals to finance the costs associated with their end-of-life funeral arrangements. The cost of a funeral may range from $7000 to $20,000. Possibly higher depending on your final wishes.
When you begin your funeral planning, pre-need or burial insurance will definitely be an important topic. Having one of these policies in place will help ensure that the burden doesn’t fall on your loved ones when you’re gone and provide you the peace of mind that can come from knowing your funeral services have been accounted for in advance.
Unlike some other types of life insurance, pre-need policies are set up in conjunction with a specific funeral home. The funds are paid out directly after you pass and only cover predetermined costs. The ability to undergo this planning process makes it easier for families to focus on honoring their loved ones and coping with their grief after they are gone.
If you cannot get life insurance for many reasons, you may want to explore pre-need insurance, a policy that allows you to plan and pay for your funeral arrangements in advance. This eliminates the planning and financial burden when the time comes and gives your loved ones peace of mind, knowing everything has been taken care of.
However, pre-need insurance may not be suitable for everyone; regular term or final expense policies can offer much more flexibility in how the death benefit is used. Ultimately, weighing all your options when protecting your family’s financial security after your passing is essential.
We usually recommend an individual secure a burial insurance policy from well known companies such as Mutual of Omaha, Gerber Life, Lincoln Heritage or Senior Life Insurance company.
Everyone wants to ensure that our loved ones don’t have to deal with the emotional and financial toll of planning a funeral, especially during such a poignant time. Funeral insurance can relieve stress and provide peace of mind for you and your family when the inevitable happens.
Of course, life insurance is often far more helpful, but if you want to ensure that your funeral costs are taken care of in advance, then taking out a separate policy could be a worthwhile option. There may be downsides to this type of cover, but in many cases, the benefits can outweigh any potential costs.
Pre-need insurance offers a unique way to cover the costs of your funeral ahead of time. Not only is this an efficient way of ensuring that your family won’t have to worry about paying for your end-of-life services, but it also comes without any medical questions or exams.
With a pre-need policy, you pay for your final expenses in advance, and the death benefit is sent directly to the funeral home – streamlining the process for everyone involved. If you want to minimize stress for yourself and those around you, signing up for pre-need insurance is a great option.
Pre-need insurance policy has its drawbacks. Although the security and convenience of knowing your arrangements are taken care of can be worth it for many, it may not always be the most cost-effective way to go. For starters, if the funeral home where you purchased your pre-need policy closes or changes ownership, your policy may not transfer to another place.
Your family wouldn’t receive a payout either in that instance, which would leave them on the hook for making up the difference. Also, investing in a term life insurance policy or final expense policy instead could provide more coverage as pre-need plans are generally limited. Any form of life insurance coverage will provide more flexibility.
Furthermore, the premiums will be ‘tied up’ and they might be better invested elsewhere and provide a more significant return over time. Proceeds from any life insurance or investments can make a far more substantial impact on those left behind than what pre-need plans can offer.
Here’s a chart to reference and review. We hope this may help you determine what type of product is a better fit for your situation.
| Pros | Cons |
|---|---|
| You plan your end-of-life services so others don't have to while you’re alive | Policy may not transfer if the funeral home closes or changes ownership. If you move you’d have to purchase a new one |
| The death benefit pays directly to the funeral home and no family members have to handle the payment. | Your loved ones don't receive a payout or death benefit. If there are other expenses outside of a funeral you’ll have to come out of pocket to pay for it. |
| Pays for your final expenses in advance and the funeral home has the pre-paid plan on file. | Ties up money that might provide more value as an investment or savings. You will not be refunded any money. |
| No medical questions or exams are required as it’s a guaranteed acceptance style of the product. | Less coverage than a term life or final expense policy. Regular insurance policies might be better for you. |
Pre-need and final expense insurance get talked about together because they both have a single, specific purpose: covering your final expenses. The distinction between the two is that pre-need assurance pays straight to the funeral chapel for a previously determined cost. At the same time, with a final expense, insurance amounts can go to your preferred beneficiary.
This means those you leave behind can use it to pay for medical bills or other financial commitments you may have accumulated and make burial arrangements.
It’s even possible for survivors to make an assignment with a final expense policy that sends payment straight to the date of the service provider, giving any remaining funds directly to them if all other costs are accounted for.
Pre-need insurance can be an excellent option for people looking to make prepaid arrangements for their funeral and burial expenses. Since the death benefit provided will cover the cost of the funeral service, burial, or cremation expenses, it offers a secure path for covering these costs in advance.
Unlike term life or final expense products, there is no expiration on pre-need insurance, and medical requirements may not need to be met. The policy’s beneficiary is invariably the funeral home you choose, and age restrictions vary by provider.
Overall, pre-need insurance is best suited to those who do not qualify for other policies but wish to have their funeral arrangements paid in full before they pass away. Also, keep in mind that once you work with a funeral home, the pre-paid insurance plan is not transferable.
Final expense insurance is one of the greatest ways to secure the funds for your funeral expenses in advance so that your family doesn’t have to. Depending on the plan selected, coverage can range from $5,000 to $40,000, and there is no expiration date; this policy is designed to cover these costs until they are needed.
People from ages 0 through 85 will have options, but unlike other policies, there are no medical exam requirements — guaranteed issue plans require no health questionnaires, and simplified issue plans will require a quick health questionnaire. Qualifying for coverage is very easy.
Beneficiaries of the pre-need insurance can be either the funeral home or loved ones you choose, and it’s best for those who may be older or less healthy and don’t qualify for a cheaper term life policy and cannot fund a burial with their savings or emergency funds. You can rest easy knowing that your final farewell will be taken care of no matter what happens.
Here’s a helpful chart where you can get a better idea of how pre-need insurance and Final expense insurance work
| Pre-need insurance | Final expense insurance | |
|---|---|---|
| Term | No expiration of coverage | No expiration of coverage |
| Death benefit | Cost of funeral service and burial or cremation expenses | $5,000 to $40,000. You get to decide the amount at the time of applying |
| Ages | Vary by provider | Ages 0 to 85 |
| Medical requirements | None | No exams. Just Yes / No health questions |
| Beneficiary | Funeral home you choose at the time of applying | Funeral home or named beneficiary |
| Best for | Unhealthy people who just wish to deal with one funeral home | Most people who want a permanent insurance product to cover their final expenses and funeral costs |
A pre-need life insurance policy is an invaluable means of providing financial stability for your loved ones in the event of the unfortunate passing of a breadwinner. The sooner you have some plan in place, the better. Nobody knows what the future holds.
It can be infinitely reassuring knowing that your loved ones will be financially secure and provided for without the burden of any out-of-pocket expenses after you are gone, providing comfort and security in unimaginable times.
You should start planning for future events to protect those you love from unnecessary stress. With a pre-need life insurance policy, your support and guidance can still provide for those most important to you, even after you have passed.
Pre-need life insurance is often referred to as burial insurance, final expense insurance or prepaid funeral insurance. These are all marketing terms for smaller amounts of whole life insurance coverage. At the time of your death, your family would use the policy to pay for all the funeral arrangements that you have made ahead of time.
The average price for either is around $7,000; however, your total bill may be more or less depending on what services and items you choose to include. Vendors may charge different rates for the same goods, so shopping around when selecting providers is essential.
Most people will get more value and flexibility when making end-of-life arrangements from a term or final expense policy. If you don’t qualify for either of those options and you strongly prefer making your arrangements, then a pre-need policy is worth considering.
Even though pre-need and final expense life insurance are tailored for this purpose, they differ. Pre-need insurance is allocated to a funeral home and cannot be utilized for anything other than funeral services; final expense policies allow your loved ones to use the benefit however they deem suitable.
The flexibility offered by a final expense policy makes it an attractive option for many individuals looking to make provisions for their families after they’re gone. Nobody wishes to leave a grieving family without a way to cover your funeral expenses. Because of this, we cannot stress enough why you’ll want to make sure you have the proper insurance policies in place. Burial insurance plans are worth considering, and may make a big difference for your family.