Your Guide to Funeral Planning | 05.23.2023

How Funeral Insurance Works

How Funeral Insurance Works

Reviewed By: William Prout

Cross Checked By: Scott Ginsberg

The process of losing a loved one is taxing in more ways than one. Many people are plagued by anxieties about their funeral and how their loved ones will deal with the emotional and financial difficulty of arranging one. Fortunately, there are steps you can take to lessen the work that your loved ones have to undergo in this process when the time comes for them to plan your funeral.

Pre-Need Funeral Insurance

Pre-need funeral insurance is one way to prepay for your funeral. It is a prepaid insurance plan that allows for a payout of a fixed sum of money upon the death of the policyholder. These policies are often availed by working directly with the funeral service provider. Not only does this protect your loved ones from the financial worries of planning your funeral, but also it helps ensure that you can have the funeral you desire by discussing and confirming the arrangements well in advance.

Life Insurance With Funeral Rider Benefits

Another good option to plan for your funeral expenses in advance is to opt for a life insurance policy that has specific funeral benefit riders. The most significant advantage of this method is that you do not need to take out a separate funeral insurance policy in addition to any existing life insurance policy that you already hold. However, something to consider when choosing this option is that it can take longer to get your payout since there will be some amount of evaluation and assessment before your loved ones can access the funds. There are two primary kinds of life insurance from which you can choose: whole life insurance and term life insurance.

Whole Life Insurance

Whole life insurance is a lifelong policy that does not have any expiry date, which makes it a reliable option for those who are able to afford the premiums for such a policy. In addition to the safety of having a permanent policy, whole life insurance also offers the added component of cash value. The amount you pay as your premium can be considered an investment that raises the value of your policy over time. You can leverage the value of your whole life insurance policy to borrow cash or take out loans.

Term Life Insurance

Unlike whole life insurance, term life insurance expires once the established term has ended. For example, for some people who avail of a term life insurance policy through their employer, the procedure may pass once they reach a certain age which can be considered their retirement age. Term life insurance is also considered a ‘pure’ type of life insurance since there is no cash value attached to it, i.e., you cannot borrow against it or expect its value to grow over time. The primary advantage of term life insurance is that the premium is lower than it would be in a whole life insurance policy, making it a more affordable option for many.

Tips For Pre-Planning A Funeral

Now that you know about your options when it comes to financial planning for your funeral, you can assess the pros and cons of each option and decide which economic route is best for you. But you should also consider making operational arrangements to minimize stress for your loved ones further.

To pre-plan your funeral, you should research and make decisions about what kind of services you would like to avail yourself of, e.g., burial or cremation, decoration decisions, and any additional services you might desire, such as religious rituals. Ensure that you communicate these decisions with your loved ones, or at least document them in writing so they have something to refer to later.  

One of the most essential parts of a funeral is selecting and organizing a casket. Thankfully, here at Titan Casket, we provide the option to pre-plan a casket. You will receive your copy of the permanent pre-need contract for the casket you select after completing the checkout process on our website. When the time comes, your loved ones only need to call us, and we will ship the casket to your funeral home within 24 hours.