Is burial insurance different from preneed funeral insurance?

burial insurance

When it comes to burial funeral insurance, both the burial and preneed funeral insurance come to your mind.

These are the most popular life insurance policies that one can obtain. Further, these can cover the funeral expenses as required.

In addition to this, the burial insurance plan and the preneed one helps to manage future costs.

These costs are included as a part of the funeral expenditure. Secondly, both serve the same purpose; still, there are some differences that we will share here.

Take a look at how the funeral insurance policies work in basic. Some of the differences and comparisons are also shared.

Based on the differences, a person can note both the policies before finally deciding to buy one.

Burial funeral insurance – Know the aspects

A life insurance policy covers the funeral expenditure, such as the funeral cost and cremation after death.

However, people dont take this seriously that funerals can add to more price, and thus they dont opt for funeral insurance.

Secondly, they dont plan about what the consequences may be when a loved one is gone forever.

In addition to this, the expenditure can add more obstacles or hardship to the other family members during such a situation.

Talking about the life insurance policies, the burial insurance plan is different. Some companies that offer burial funeral insurance provide it in the form of term plans.

At the same time, other insurance companies offer it as a whole life insurance policy. Further, the burial insurance policies may have lower or higher death benefit limits. However, it depends on company to company.

Based on the burial life insurance policies and their terms, the company will pay death benefits to the beneficiaries.

They can further use the money in whichever way they like or choose. Meanwhile, the main motive of the insurance policy funds is to cover the funeral expenditure. It can include costs in medical bills, legal expenses, debts, and much more.

Benefits of burial funeral insurance

Talking about the burial funeral insurance policy, it offers some flexibility. Here, the death benefit is received by the beneficiary.

So, after death, they can use the money in any form they like. This way, the financial burden can be relieved to pay for the funeral expenses when the actual time comes.

Further benefits include providing financial support to cover the expenses. You dont want your family to stay in debt and face the hardships of life.

Preneed funeral insurance – Know the aspects

In comparison to the burial life insurance policies, the preneed funeral insurance is different. The funds will be used for the funeral before the actual death of a person takes place.

Preneed funeral insurance helps to cover the family members after the primary person’s death. It relieves them from financial burdens and protects them.

Talking about the costs, the pre

burial life insurance policies need funeral insurance covers all expenditures such as funeral home service, funeral merchandise, burial services, and much more.

The main benefit of preneed funeral insurance is that it locks the current expenditure rate for the services. It may also help the family members from inflation or rising costs of funeral expenses, etc.

Like the burial funeral insurance, the preneed funeral insurance can also be offered as a whole life insurance policy. Some companies do offer it as a term plan for the family members.

A preneed plan payout goes directly to the funeral home, not your family. When you buy a preneed plan, you’ll typically pick out options such as:

  • Burial or cremation
  • Casket or urn
  • Cemetery plot
  • Flowers
  • Headstone
  • Types of services, such as viewing or visitation
  • Cost for digging and filling a grave

Meanwhile, the main difference between burial funeral insurance and preneed funeral insurance lies here.

For the preneed funeral insurance, the money goes directly to the funeral service provider. One has to choose the funeral service today itself instead as a beneficiary after the death.

Secondly, the preneed funeral insurance pays immediately to the assignee at the time of the end. These funds are used for the funeral costs without any delays.

Benefits of preneed funeral insurance

When it comes to the benefits of preneed funeral life insurance, it removes the administrative burden.

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Meanwhile, here the insurance policy allows you to work with the funeral home. It is planning to identify and pay whatever the funeral expenditure may be at that time. This way, the preneed insurance policy helps the family members during difficult times.

Preneed funeral insurance – Know the Pros

  • You create the choices. By selecting your funeral arrangements, your family won’t need to choose quickly or negotiate costs later, and therefore the preneed insurance payout will go on to the funeral service. It will help alleviate stress and guesswork among your family
  • The price is usually guaranteed based on the chosen arrangements. Further, if the prices have gone down or up, they are locked in the first place.
  • Some items are often replaced. If an item of your choosing, like a casket, is not any longer available at the time of need, your policy might return that item with one of similar style, quality, and value.
  • Some preneed contracts are Medicaid-exempt. If the preneed plan puts your money into a Medicaid-exempt trust, that cash doesn’t count toward your assets for Medicaid eligibility. But not all preneed plans are Medicaid-exempt.

Preneed funeral insurance – Know the Cons

  • Preneed funeral insurance doesnt carry any flexibility. Further, the plans may change over time which can make it difficult in the long run.  And since the preneed insurance payout goes on to the funeral service, your family won’t have the flexibility of using the cash for other bills.
  • Your health could affect what plan you qualify for. Health conditions can affect what sort of preneed plan you’re eligible for and, therefore, the cost.
  • Not everything is guaranteed. If a preneed policy isn’t paid entirely by the time of death, the benefit might not be guaranteed, counting on your state and insurance firm.
  • Families got to realize a pre-need plan. If you purchase a preneed plan, it’s critical to let your family know what funeral parlor has the procedure and, therefore, the details.
  • Otherwise, your family could find yourself paying for a funeral elsewhere without knowing you already had arrangements.