Pre-Planning Your Funeral With A Life Insurance Policy
Funeral Pre Planning, The Latest Trend
With ever-spiraling costs, paying for funeral arrangements, especially when you are grieving and in turmoil, can be a hassle. Thus, to avoid the same, an increasing number of people are now opting for funeral pre-planning. Pre-planning funeral arrangements have multifold benefits, including helping prevent conflict among family members, easing the burden on family members, saving money, and planning in advance (financially).
Pre Paying With A Life Insurance
While technically, you cannot undertake pre-planning with life insurance, there still exist ways via which you can utilize your life insurance policy to pay for funeral expenses pertaining to the future. For example, when you, as an individual opt for life insurance for yourself, you can make use of the death benefit and earmark to pay for a wide range of funeral services. However, given that in this scenario, money is not actually changing hands, it technically does not constitute funeral pre-planning.
If you do possess a life insurance policy with high-paying dividends, they will no doubt compensate for the increase in the cost of funeral services over time. In most such cases, the future value of your policy will more than suffice for the cost of your funeral arrangements.
Issues Pertaining To Paying For A Pre Planned Funeral With Life Insurance
If funding a pre-planned funeral with your life insurance policy is on your mind, you must pay cognizance to specific issues pertaining to the same, as listed below:
- Policy Overages: Suppose a life insurance policy initially worth $10,000 will later be worth $16,000, and by that time, if the overall cost of the funeral ceremony is less than this amount, then the estate will stand to benefit from overages. If, by chance, the deceased had opted for Medicaid, then, in that case, the respective state would benefit from the payout. Additionally, Medicaid or even nursing homes can stake a claim for the leftover insurance money.
- No Guarantee: A significant issue with opting for pre-planning with life insurance is that at the time of the policyholder's demise, they may already have pre-existing loans against the policy in question. Even if the policyholder had earmarked the policy to pay for funeral expenses, this payment method might not work if the policyholder was irregular with payments or already cashed out on the insurance policy.
- High Premiums: In many cases, life insurance policies may require the policyholder to pay them a certain amount, lifelong. Thus, it so happens that in many cases, policyholders end up paying more in terms of premiums than the actual cost of the funeral. Thus, in such situations, experts recommend cashing in on the insurance policy and paying the difference.
- Insurance Processing Fee: Certain insurers ensure that you receive the insurance money immediately, so that you can utilize the same to pay for immediate arrangements. At the same time, other insurers may take as much as 30 days to make the payout. In such cases, a factoring company comes to your rescue and offers you a short-term loan – to meet immediate funeral arrangement needs, while in the meantime, you receive the insurance pay-out. However, such a service is generally associated with a steep fee.
If you are in the process of funeral pre-planning and wish to cater to your casket needs, Titan Casket is the best place to do so. We offer you the opportunity of casket pre-planning, with the benefits of locking-in current prices and ensuring your wishes are respected while saving as much as 50% or more on your casket.
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