What you need to know about buying funeral insurance
Funerals can be expensive and having a good funeral insurance policy will provide financial security for your loved ones. Different from life insurance, funeral insurance policies pay for the costs of burial whether traditional or eccentric, while life insurance provides an inheritance to your heirs. If you don't want them spending any of that inheritance on your funeral, then it's best to have both.
Also known as final expense insurance, burial insurance or pre-need funeral insurance, funeral policies can be either a whole life policy or a term life policy. Term life premiums are lower, but will end at a certain age (i.e., 75 or 80) after a specific period of time (for example, 10, 15 or 20 years). It it ends during your lifetime; there's no payout at death. A permanent whole life policy lasts a lifetime and pays upon death, no matter how old you are or how long you had the policy.
Pre-need funeral insurance is whole life insurance tied to a funeral service provider. The cost of the funeral is locked in at the time you purchase the insurance.
Final expense insurance can be either permanent whole life or term life insurance. It costs less than pre-need and is more flexible.
Burial insurance doesn't necessarily involve a burial. You can be cremated or donate your body to science. Most are term life insurance similar to final expense insurance.
You can get funeral insurance from just about any insurance agent or funeral home, but be sure to go over the details. Policies differ by provider and even from state to state.
For the rules and regulations in Texas, visit www.prepaidfunerals.texas.gov.
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