What is funeral insurance?
Funeral insurance, also called final expense insurance, cremation insurance, or burial insurance is a life insurance policy offered by a licensed insurance company. These policies are for relatively small amounts of money, a few thousand to twenty thousand dollars.
As with other insurance policies, the buyer of the policy pays a set amount each month to maintain policy coverage. The beneficiary of a funeral insurance policy is a funeral home or crematory. A family member is generally listed as a second beneficiary. When the person covered by the funeral insurance policy dies, the full benefit of the life insurance policy pays out.
The payout from final expense insurance is meant to cover funeral, cremation, and/or burial costs.
Is funeral insurance different than final expense life insurance?”
No. Funeral insurance and final expense life insurance are the same things. Along with cremation insurance and burial insurance, they are life insurance policies sold by insurance companies to cover the cost of final needs.
How do final expense life insurance companies work?”
Final expense life insurance companies are licensed insurance companies. An insurance company must be licensed by a state to operate in that state. Final expense life insurance companies partner with funeral homes and crematories to assist people with funeral planning.
A funeral home or insurance company agent sells a life insurance policy to someone interested in covering funeral, cremation, or burial costs. The amount of the final expense insurance policy is chosen specifically to cover anticipated costs.
When the person named on the policy dies, the final expense life insurance policy is designed to payout quickly so that the funeral home receives funds for the funeral in a timely manner and family members needn’t come up with funeral costs.
What’s covered by a final expense policy?”
A final expense policy covers funeral, cremation, and burial costs. The amount of the policy should be chosen to reflect the anticipated cost of final needs.
A final expense policy payout is paid directly to a funeral home or crematory to cover costs. Should the amount of the policy exceed funeral costs, an additional payout is made to a second named beneficiary, generally a designated family member.
What is a funeral bond?”
A funeral bond differs from funeral insurance. A funeral bond is an investment in a managed fund. An investor purchases a funeral bond. Money is invested as a lump sum or in installments. Any interest earned is added to the capital. When the owner of the bond dies, the capital and earned interest is paid to the estate or to a funeral director to cover funeral expenses.
Is cremation insurance different than a funeral insurance plan?”
No, there’s no difference. Final expense insurance policies, whether referred to as funeral insurance or cremation insurance, is a life insurance policy that pays out quickly upon death to cover final expenses of a funeral, cremation, or both.
Pre-Planning Q & A
What is funeral preplanning?”
Funeral preplanning is planning funeral details, and arranging for a funeral and/or cremation, in advance of need as opposed to at the time of death. When preplanning a funeral for yourself or someone else, you consider the type of funeral you wish and choose among cremation, burial, and mausoleum interment.
A funeral home or cremation provider works with you to create an agreement for services to be performed at the time of death that outlines your wishes. You pay for services at the time the agreement is made, and the funeral home provides services at the time of death for the already paid amount.
Why should I plan ahead?”
1. To communicate your wishes for final needs
2. For the peace of mind of knowing final needs are cared for
3. To save your loved ones the indecision and stress of planning at the time of death
4. To spare your loved ones from covering the cost of final expenses
5. To pay a lower cost for final expenses
If I plan ahead, what happens when I die?”
Once you create a funeral plan or purchase funeral insurance, provide a copy of your plan, agreement, and/or insurance policy to the family member or other person who is responsible for calling the funeral director at the time of death.
One call to the funeral home that holds the agreement will set everything in motion. The funeral director makes arrangements for death paperwork and your transfer. Funeral arrangements are carried out in accordance with the agreement.
What happens if I move after I preplan and no longer wish to use the same funeral home?”
Prepurchased funeral plan agreements define what happens in this instance, so the specific answer will be in your document. Some agreements are portable, meaning that your preplanned and prepurchased funeral may simply take place at an alternate funeral home that is more convenient. Some agreements allow for a refund of some or all of paid funds that may then be used towards the cost of a funeral at another facility.
Is my money safe if I prepay funeral costs?”
Prepaid funeral plans and funeral insurance are regulated by each state. States require reasonable guarantees that the money is held and available for use at the time of death. Generally, funeral homes and insurance companies are required to set aside a substantial portion of prepaid funds to ensure funds are immediately available to cover funeral costs.
It is important to read agreements thoroughly, and to work with reputable funeral homes and insurance companies.
Will my family still have funeral costs when I die?”
It depends. If your family chooses additional or alternative services, they may need to pay additional funeral expenses.
Funeral Service Q & A
Is embalming necessary?”
Not always. Embalming is not necessary when cremation is performed shortly after death, or when a natural burial occurs shortly after death. Embalming is necessary when interment will be a few days off. Refrigeration is an alternative to embalming.
What is a graveside service?”
A graveside service takes place quite literally at the side of the grave in a cemetery or natural burial preserve. A clergy member or officiant often presides over the service, offering prayers and words of solace while committing the deceased to the earth. A graveside service may include lowering the casket into the ground, and placing flowers or dirt atop the casket.
What are religious rites?”
Religious rites are faith-specific rituals such as the Last Rites of Catholics that may be included in a funeral or funeral Mass in accordance with the faith of the deceased.
What is a memorial service?”
A memorial service is less formal than a funeral, and is a service to remember and honor the deceased. A memorial service may be held in a funeral home, house of worship, or any other place of particular meaning or convenience for friends and family to gather. The deceased is not present at a memorial service, though the family may present the cremated remains of the deceased in an urn.
A memorial service does not follow a set structure, so can be highly individualized to suit the needs of the family and personality of the deceased. It may include speeches or remembrances, readings or poems, music, and even a slideshow.
How do I arrange a military funeral or burial?”
Your funeral director at a funeral home or cremation provider (also a funeral home) makes arrangements for a burial flag and Funeral Honors ceremony. Should you prefer to make arrangements yourself, apply for a burial flag to the VA using VA Form 27-2008, and pick up the flag at a VA regional office or the USPS.
A Funeral Honors ceremony includes the playing of Taps, flag folding, and flag presentation. The ceremony may also include a rifle detail, color guard, pallbearers, caisson, and military flyover. A Funeral Honors ceremony is arranged with the Military Funeral Honors Contact or Coordinator in the appropriate military section, Army, Navy, Air Force, Marine Corps, or Coast Guard.
What is mausoleum burial?”
Mausoleum burial involves interment of the deceased in a private mausoleum or community mausoleum. The deceased, within a casket, is placed inside a crypt in the mausoleum, and the crypt is sealed. Often, an identifying plaque is placed on the crypt.
What is a cremation burial?”
With cremation burial, cremated remains are placed within a container, and the container is buried in a cemetery plot.
What is a columbarium?”
A columbarium is similar to a mausoleum. A Columbarium contains dedicated spots, or niches, for interment of cremated remains.
What does interment mean?”
Interment is burial of a deceased person in a grave or tomb, and includes cemetery burial, placement of the deceased in a mausoleum, and placement of cremated remains in a columbarium.