Burial Insurance, which is also called death insurance by some insurers, is a policy which allows you to take care of the funeral costs involved when you leave this earthly plain. Having a policy that caters for these needs is a great way to ensure that everything is ready for your departure and your relatives are not left with footing the bill. There are several choices you can make when it comes to insuring your life and it is a sensible idea to investigate it further.
The simplest form of death insurance comes in the form of a policy completely devoted to paying all the funeral costs and that’s it. This kind of policy is referred to as a Pre-Need Insurance policy which caters solely for this need. Widely available through funeral homes and funeral directors, the only named beneficiary with this policy is either of these establishments. In this way the policy covers the funeral costs alone and cannot be used for any other purpose.
Other options of death insurance you can pick from differ from this basic package. Some policies are quite liberal and the amount that is paid out after your death can be paid to anything else, as well as the cost of the ceremony. After your death, any outstanding debts or expenses can be paid using the death benefit the beneficiary is given. When looking for these options, they will either be titled as burial insurance or final expense insurance.
The unique thing about these two types of policy is that you are entitled to name any beneficiary that you want. A friend, spouse, colleague or your children could all be picked by you as the named beneficiary. Insurers usually suggest that it is wise to discuss the policy with the beneficiary to ensure that they are clear on your wishes. Make it clear if there are any particular people or organizations that you wish money to be paid to in the event of your death. Unless you discuss these issues with the beneficiary, it is worth mentioning that they can spend the funds in any way they wish if not told otherwise. It is commonly the case that if any of the funds are left unallocated they belong to the named beneficiary.
The benefits of burial or final expense insurance include being able to choose who you wish the beneficiary to be. It could be a close family friend, one of your children or a business associate. Whomever you choose, it is recommended that you talk to them about what you want to happen with the benefit after you have passed away. If you have certain people of companies you wish to receive some money, then this should be pointed out to the beneficiary after the policy is started. These policies allow the beneficiary to spend the money as they see fit if there have been no specific instructions from the deceased. Nominated beneficiaries are also normally able to keep any left over money as their own.
In respect of death insurance policies there are two main options to pick from. You could have Term Life Insurance; this basically means that the policy will run for a set period of time. If there are no claims made due to death during this time, then the policy ceases to continue. Whole Life Insurance is a policy that will run up until the event of your death and is not limited to a set timescale. Generally speaking, the premiums for the latter option are a bit more than that of the former option.
Death Insurance policies present several options for the buyer. You can opt for a Term Life Insurance policy which will only run for a certain amount of time. If you die during the time that the policy is live then your beneficiary will receive the full death benefit. Should you live past the expiry date of the policy, no funds are released and the policy is void. Whole Life Insurance runs until your death and does not have an expiry date at all. It is common for Term Life Insurance Premiums to be slightly less than Whole Life Insurance premiums due to the fact that they are not indefinite.
Purchasing death insurance is really something you should think about before you get too old. It will contribute to a better quality of life; knowing that the funeral costs arrangements are all taken care of will be a weight off of your shoulders.
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