Most of us know that life insurance as well as funeral insurance can provide a great deal of benefits in the event of a terminal illness and death respectively. However, the distinction between the two seems to be unclear for most. You can find different versions of funeral insurance being sold, but all of them are meant for people to take care of their loose financial ends before they depart.
What you need to know about funeral insurance
Funeral insurances are financial policies one can use to protect their loved ones from the hefty costs of the funeral when they depart from this world. Funeral coverage insurance is also commonly known as burial insurance and it covers all significant costs associated with the funeral, from the casket and arrangements, all the way to the flowers. However, funeral insurance only covers the costs associated with the funeral, so if the funeral insurance surpasses the costs of the funeral, you won’t be receiving the remnant of the amount.
It’s very easy to acquire funeral insurances and it doesn’t even require a medical exam. You can sign up online or over the phone. Some policies even guarantee the acceptance of all applicants. Compared to life insurance, funeral insurance requires relatively small amounts of money making it a lot more affordable for the masses. The payments for funeral insurance are pretty quick and can be received as soon the claim is approved. Some studies infer that funeral insurance contributions might actually be a lot more than the actual funeral costs, especially if you signed up at 50 years of age and passed away at 90 or older.
What life insurance can offer
There are many critics who scrutinise funeral insurance primarily because their guaranteed acceptance implies and omission of medical exam means that the consumers become a part of a high risk pool of people who are usually less educated and have low income. Life insurance is one of the most common insurance policies out there yet often the least understood, as most people leave out the details for the experts to sort out. Life insurance entails a lump sum pay out which covers the funeral as well as many other financial issues. It offers a wider range of protection. Most noticeably, when it comes to life insurance, the actual difference between the total contribution by the consumer and the actual payout is much smaller.
Some life insurance policies allow you to redeem certain coverage when you need them. This accessibility of funds, even if that means reduction from the funeral cost pay out, attracts a great deal of customers for life insurance. Furthermore, insurance loans can also be received at a low interest rate with flexibility in repayment plans. Life insurances can offer payouts right after a terminal illness has been diagnosed. On the contrary, life insurance payouts are relatively slower and for many, the funds aren’t released until long after the funeral. Life insurance costs can also be increased due to certain health issues.